French Competition Law provides a comprehensive review of the French rules relating to competition: restrictive agreements, commercial negotiation, abuses of a dominant position, procedure and merger control.

French Competition Law

In order to shorten payment deadlines, former legislation provided that ceilings could be reduced according to sector through inter-professional agreements. Those agreements, which could be extended by decree to all operators in the sector, were intended to allow traders to propose the date of receipt of merchandise or provision of the service as the starting point of the time period, provided tha …

Sectoral derogations

Article L. 441-10, I of the Commercial Code sets a period of thirty days after the date of receipt of the goods or performance of the service although the parties may opt to derogate from that time-frame within certain limits. Regarding contractual payment deadline, a period of sixty days from the date of issue of the invoice is now the rule and forty-five days end-of-month is the exception applicable only if the parties have expressly stipulated it in the contract and on condition that it is not manifestly unfair to the creditor (Article L. 441-10, I, paras. 2 and 3). According to the administrative court, the fact that the starting point of the contractual time-limit for payment is the date on which the invoice is issued by the supplier, and not the date on which it is received, does not infringe the principle of the individual nature of penalties, since Article L. 441-9 of the Commercial Code makes the purchaser and the supplier jointly responsible as regards the issue of the invoice .  Similarly, the fact that the period for payment of invoices under public procurement contracts runs from the date of receipt of the demand for payment does not introduce a breach of the principle of equality between private persons, for whom the time-limit for payment runs from the date of issue of the invoice, and public entities, since the rules applying to the latter are based on the specific nature of the activity carried out, which must comply with the objectives of efficiency and proper use of public funds .

Taking account of the administrative fine for failure to comply with the methods of calculating payment deadlines, it is in the interests of undertakings to clearly state them in contracts: 60 days from the date of issue of the invoice or 45 days from the end of the month in which the invoice was issued, or at the end of the month on expiry of a 45 day deadline . In principle, the methods of calculation must at least be stated on the supplier's general terms of sale.

To prevent French exports from being at a disadvantage compared to their foreign competitors, Article L. 441-12 provides that for purchases of goods intended to be exported “as is” outside the European Union, exempted from VAT in application of Article 275 of the General Tax Code, the payment  period can be up to 90 days from the date of issue of the invoice. However, the derogation is not applicable to purchases made by the large undertakings. Further, the period agreed between the parties should be expressly stipulated in the contract and must not be manifestly unfair to the creditor. If ultimately, the goods are not exported outside the Union, the late payment penalties stipulated in paragraph II of Article L. 441-10 become payable.

Where the parties provide for an acceptance and verification procedure, it must not have the effect of either increasing the duration or moving the point of departure of the maximum payment deadline, unless that possibility is expressly stipulated by contract and on condition that the provision in question does not constitute an abusive clause or practice within the meaning of Article L. 441-16 or of Article L. 442-1, again on penalty of an administrative fine (Art L. 441-10, III, Commercial Code).

CAA Paris, 30 January 2023, LawLex202300001919JBJ.

TA Lyon, 15 September 2023, LawLex202300011728JBJ.

According to the Administration, the 45 day end-of-month deadline can be regarded as starting from the date of issue of the invoice, with payment coming at the end of the calandar month in which the 45 days expires or by adding 45 days to the end opf the month of issue of the invoice. This ceiling applies to all producers, manufacturers or artisans, excluding non-professionals.

Deadlines under ordinary law

In order to shorten payment deadlines, former legislation provided that ceilings could be reduced according to sector through inter-professional agreements. Those agreements, which could be extended by decree to all operators in the sector, were intended to allow traders to propose the date of receipt of merchandise or provision of the service as the starting point of the time period, provided that this did not exceed the ceiling. 

Inter-professional agreements in a specific sector could nevertheless fix a maximum deadline of over 45 days if the extension was due to objective economic reasons specific to the sector concerned  and if the agreement provided for a progressive reduction of the derogated deadline to the legal deadline. The derogation had to be of limited duration and come to an end on 1 January 2012. In application of that provision, 39 agreements were negotiated and validated by decree after an opinion issued by the Competition Authority. Meanwhile Directive No 2011/7 of 16 February 2011 which replaces Directive No 2000/35 and Article 3(5) provides that “Member States shall ensure that the period for payment fixed in the contract does not exceed 60 calendar days, unless otherwise expressly agreed in the contract and provided it is not grossly unfair to the creditor”. The provision, transposed by Law No 2012-287 of 22 March 2012, allowed France to extend the possibility of using agreements derogating from the maximum payment deadlines. Such derogations are however strictly regulated: they are only possible for sectors having already benefitted from inter-professional agreements and must be justified by the particularly marked seasonal nature of the products or services in question; inter-professional agreements must set deadlines shorter than those fixed in previous agreements and be of a duration of three years maximum . To date, seven such agreements have been concluded in the following sectors: wine, toys, sports goods, recreational vehicles, clocks and watches, jewelry and gold/silverware, farming equipment and the leather industry.

The sectoral derogations (Article L. 441-6 I, para. 10 Commercial Code) remain. Operators in a given sector and their customers and suppliers retain the possibility of fixing an earlier deadline, inter-professional agreements now being optional.

The law has also further consolidated the regulatory flexibility in respect of products presenting a particularly marked seasonal character set out in the Law of 22 March 2012. Thus, by way of derogation from the contractual deadlines under ordinary law, the parties may, for such products, agree on “a payment deadline which may not exceed the maximum time limit applicable in 2013 in application of an agreement concluded on the basis of point III of Article 121 of Law 2012-387 of 22 March 2012 on the simplification of the law and the easing of administrative procedures”. The deadline must be expressly stipulated in the contract and should not constitute a manifest abuse by the creditor. Decree No 2015-1484 of 16 November, codified in Article D. 441-5-1 of the Commercial Code, lists the sectors concerned.

The Ordinance of 24 April 2019 incorporates the derogatory maximum limits into Article L. 441-11, all references to the decree having been deleted. The text establishes payment deadlines for purchases of perishable food products, frozen meat, frozen fish, ready meals, canned goods made from perishable products, live stock and derived fresh meat, alcoholic beverages, grape and wort products, for the agricultural equipment sector, for sectors with virtually exclusively seasonal activities (sporting goods, equipment for snow-based sports), the leather industry, the agricultural sector, watchmaking, jewelery, precious stones and metals and for the toy sector. The maximum period must be expressly stipulated in the contract and must not constitute a manifest abuse by the creditor (Article L. 441-11, III Commercial Code). This requirement applies only to the sectors mentioned in 6° to 10 ° of the provision. Food and wine products and road transport are not included. In the absence of any express stipulation, the ordinary deadline applies.

E.g. payment deadlines found for the sector in question in 2007 or the specific situation of stock rotation. See Decree No 2009-912 of 27 July 2009, OJ 29 July 2009, 12580, relative to the sale of new or used vehicles by auto manufacturers to distributors of two or three-wheel motor vehicles or quad bikes; Decree No 2009-992 of 20 August 2009, OJ 23 August 2009, 13835, relative to the wholsale trade of automotive tools

Law No 2012-387 of 22 March 2012, Art. 121.

French Competition Law

166. Sectoral derogations

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Les notions juridiques connexes

166. Sectoral derogations

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Les notions juridiques connexes

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