Prescription of Commercial Claims: Time Limits and Rules

Prescription of Commercial Claims: What Every Business Leader Must Know

Extinctive prescription constitutes one of the most feared legal mechanisms in terms of debt recovery. When a commercial claim is not claimed within the legal time limit set, the debtor can invoke prescription and definitively free himself from his payment obligation. Understanding the rules of prescription is therefore essential to protect your company's rights and secure its cash flow.

The standard prescription period: 5 years

Since the reform carried out by Law No. 2008-561 of 17 June 2008, Article L110-4 of the Commercial Code sets at 5 years the prescription period for obligations arising from commerce between merchants or between merchants and non-merchants. This period aligns commercial prescription with the standard time limit provided for in Article 2224 of the Civil Code.

This five-year period applies to the majority of commercial claims: unpaid invoices between professionals, service provisions, supply contracts, commercial commissions. The starting point runs from the day on which the rights holder knew or should have known the facts allowing him to exercise it, which generally corresponds to the invoice due date.

Specific time limits for certain claims

Many exceptions coexist with the standard time limit:

• 2 years for claims by professionals against consumers (Article L218-2 of the Consumer Code)

• 1 year for payment actions against goods carriers (Article L133-6 Commercial Code)

• 10 years for claims evidenced by an enforceable title (Article L111-4 of the Code of Civil Enforcement Procedures)

• 5 years for commercial rents (Article 2224 Civil Code)

• 3 years for bills of exchange and promissory notes (Article L511-78 Commercial Code)

The exact classification of the claim therefore determines the applicable time limit. An analytical error can lead to the irretrievable loss of the right to take legal action.

Interruption and suspension of prescription

The prescription period is not fixed. Several events allow it to be interrupted, erasing the time already elapsed and starting a new period:

• Service of a claim, even by way of provisional measure (Article 2241 Civil Code)

• An act of forced execution such as seizure

• Acknowledgement of debt by the debtor (Article 2240), in writing or by partial payment

• A conservatory measure taken under the Code of Civil Enforcement Procedures

Note: a simple formal notice letter, even by registered mail, does not interrupt prescription. Conversely, prescription may be suspended in case of inability to act resulting from law, agreement or force majeure (Article 2234 Civil Code), as well as during a mediation or conciliation procedure (Article 2238).

Practical Strategies to Protect Your Claims

To avoid prescription, adopt proactive accounts receivable management:

• Implement strict monitoring of due dates with automatic alerts in your accounting software

• Act from the first non-payment: reminders within 15 days, formal notice within 30 days

• Favour interruptive acts: payment order, summons, rather than simple reminders

• Obtain acknowledgement of debt from the debtor by negotiating a written payment plan

• Document all steps to prove interruption in case of dispute

Prescription is a matter of public order: the judge cannot raise it of his own motion (Article 2247 Civil Code), but the debtor will invoke it systematically. Anticipating remains the best defence.