Commercial Dispute: Procedures and Legal Remedies

In a dispute between businesses, the outcome is rarely decided at the hearing. It is decided well before that, on three elements: the quality of the evidence built up at the time of the relationship, compliance with limitation periods, and the choice of procedure initiated. An undisputed claim can be lost for lack of evidence; a perfectly documented claim can be lost for failing to act in time. This article follows the order in which these questions actually arise.

Before any proceedings: the formal notice

A formal notice is not a mere courtesy step beforehand; it produces its own legal effects. It triggers default interest, it marks the starting point of several deadlines, and its absence can render a subsequent claim inadmissible where the contract or the law requires it.

To be effective, it must precisely identify the unfulfilled obligation, quantify the amount claimed, set a reasonable deadline for performance, and be sent by a means that establishes the date of receipt. A follow-up by ordinary email does not satisfy this last condition.

Amicable methods, often mandatory

Many commercial contracts include a prior conciliation or mediation clause. This is not a mere formality: bringing a matter before a judge without having complied with this clause runs into a plea of inadmissibility, and the action is declared inadmissible. The first reflex, before filing suit, is therefore to re-read the contract's provisions on dispute resolution.

Three avenues coexist:

• Mediation, where a third party helps the parties build a solution themselves.
• Conciliation, similar in spirit, often conducted by a court-appointed conciliator.
• Arbitration, which results in an award having the authority of res judicata. It requires an arbitration clause, valid between merchants, and its cost generally reserves it for significant matters.

An agreement resulting from mediation can be approved by the judge, which gives it enforceable force. This is what distinguishes a well-constructed settlement from a mere moral commitment.

Judicial procedures based on urgency and the extent of dispute

The choice of procedure depends less on the amount than on the degree to which the claim is disputed.

The order for payment (injonction de payer) is a non-adversarial, fast and low-cost procedure. The judge rules solely on the creditor's documents. Its weak point mirrors its strength: the debtor has one month to file an objection, which sends the matter back to an ordinary procedure. It is therefore suited to claims that are unlikely to be disputed.

The interim provisional order (référé provision) allows for quick payment of a provisional sum where the obligation is not seriously disputable. This is the decisive criterion: even a weak but reasoned dispute is enough to defeat the interim application. Used well, it settles the dispute in practice, as the provisional sum often covers the entire claim.

The merits proceedings before the commercial court become necessary as soon as the dispute concerns the interpretation of the contract or the reality of performance. It takes longer, but only it settles the disagreement definitively.

The deadlines that cause claims to be lost

This is the point where businesses lose the most rights without realising it.

An action between businesses is, in principle, time-barred after five years from the day on which the holder of the right knew or ought to have known the facts enabling them to act. Where the counterparty is a consumer, the deadline applicable to the business's action is shorter. These distinctions and their starting points are detailed in our article on the limitation period for commercial claims.

In addition to these deadlines, there is the regime governing payment terms: the legal cap agreed between businesses, late-payment penalties payable automatically without a reminder, and the fixed compensation for recovery costs owed for each overdue invoice. These sums do not need to be claimed to be owed, but they must be included in the terms and conditions to be easily enforced.

Evidence, which decides everything else

Between businesses, evidence is, in principle, unrestricted: it can be established by any means. This freedom is an advantage, provided something has been built up to produce.

In practice, three elements determine the outcome: the contract or accepted terms and conditions, proof of the order and delivery, and the history of exchanges. The sensitive point is almost always acceptance: producing terms and conditions is not enough; it must be established that the counterparty was aware of them and accepted them before entering into the commitment. Our article on the acceptance of terms and conditions deals precisely with this point.

This is also why formalising commitments has direct defensive value. An electronically signed commercial contract provides the content, the date and the identity of the signatories all at once, within a set whose integrity can be demonstrated — precisely the three elements a defendant will seek to challenge. The evidentiary value of an electronic signature in the event of a dispute depends precisely on the quality of this body of evidence.

Usage scenarios

Undisputed unpaid invoice. The order for payment is the most effective route. The file must contain the invoice, the purchase order or contract, proof of delivery and the formal notice that went unanswered.

Client disputing the quality of the service. The order for payment and the interim order are ruled out once the dispute is reasoned. Merits proceedings become necessary, and the focus shifts to proving that performance was compliant.

Commercial relationship abruptly terminated. The issue is no longer payment but notice period. The length of the relationship and the volume of business determine the notice period that should have been respected, and the loss is assessed on the margin lost during that period.

Frequently asked questions

Is a formal notice always required? It is not always required on pain of inadmissibility, but it triggers default interest and marks the starting point of several deadlines. Doing without it weakens the file with no benefit at all.

What is the deadline for taking action between businesses? In principle, five years from the moment the facts enabling action are known. Specific deadlines exist depending on the nature of the action and on the status of the counterparty.

Is the order for payment always suitable? No. The debtor can file an objection within a month, which sends the matter back to an ordinary procedure. It is only worthwhile if the claim is unlikely to be disputed.

What does a claim that is not seriously disputable mean? This is the condition for the interim provisional order. A reasoned dispute, even one that is only partially well-founded, is enough to defeat the application, which must then be brought on the merits.

Is a prior mediation clause binding? Yes. Bringing a matter before a judge without having complied with it exposes the claimant to a plea of inadmissibility and the action being declared inadmissible. The contract must be re-read before any legal action is filed.

Does an exchange of emails constitute evidence? Between businesses, evidence is unrestricted and an email is admissible. Its weight depends on what it establishes: an agreement on price and subject matter carries more weight than a discussion without conclusion, and its date must be verifiable.

Key takeaways

Three questions arise in order, and are dealt with in the reverse order of their apparent urgency. Limitation first: it extinguishes the right itself, and no quality of file can make up for an expired deadline. The contractual amicable settlement clause next: ignoring it renders the action inadmissible, regardless of its merits. The choice of procedure last, which depends on the degree of dispute rather than the amount.

Ahead of all this, evidence remains decisive. Between businesses, it is unrestricted, which is an advantage only for those who have built up something to produce. The files that win are those where the content of the commitment, its date and the identity of the person who made it cannot be seriously disputed.