Legal term for payments in France

French legislation on payment terms is essentially based on EU Directive 2011/7/EU on combating late payment in commercial transactions but goes further than the requirements of this Directive by providing ceilings on payment terms and mandatory payment terms for certain products and services (articles L.441-10 to L.441-16 of the French Commercial Code).

If no contractual payment term has been agreed between the parties, the standard payment term is 30 days following the date of receipt of the goods or performance of the service (article L.441-10 of French Commercial Code). 

French law provides also mandatory payment terms for certain sectors/type of products (e.g. the carriage sector, for some perishable food, alcoholic beverages …) (article L.441-11 of the French commercial code).

Parties may decide to extend the standard payment term provided that such agreed payment term does not exceed the following ceilings (article L.441-10, I of French Commercial Code): 

• 60 days from the date of issue of the invoice;
• 45 days end of month from the date of issue of the invoice provided that such term has been expressly stipulated by contract and does not constitute an obvious abuse of the creditor's rights (e.g. it must not be a gross deviation from good commercial practice and not be contrary to principles of good faith and fair dealing, if justified by the nature of the product or service …)
• 45 days from the date of issue of the invoice for periodic invoices (i.e. when a supplier carries out deliveries to its client several times a month and issues a summary invoice at the end of the month).

These payment terms start on the date the invoice is issued by the seller/service provider and not on the date the invoice is received by the purchaser/client. This has been recalled by the Commission d’examen des pratiques commerciales (CEPC) which has stated that “considering the statutory provisions applicable to payment terms, it is illegal to consider the date of receipt of an invoice as the starting point of the payment term” (CEPC, 2 March 2017, opinion n°17-5; see also CEPC, 14 March 2019, opinion n°19-5).  

Yes, provided that payment terms evidenced in the PO do not exceed the payment terms ceilings (see answer to question 2). However, any payment term of 45 days end of month must be stated in the contract.

Payments terms above the standard payment term must have been agreed between the parties and/or be mentioned in the contract (e.g. general terms and conditions, framework agreement…). 

Please note that the date of payment as well as the  rate of the penalties and the amount of the indemnity for recovery costs in case of late payment must be mentioned in the invoice (article L.441-9, I of French Commercial Code).

The French Department for Competition, Consumption and Repression of Fraud (Direction générale de la concurrence, de la consummation et de la repression des frauds - DGCCRF) may, following an investigation, impose an administrative fine of EUR 2 million (EUR 4 million euros in case of repeated infringements) and the publication of the sanction in case of an infringement of French payment terms legislation (article L.441-16 of French Commercial Code).

Such administrative fine may also be incurred in case of breach of French late payment penalties legislation (see section 7 below).

No, there is no special legislation with regard to the COVID-19 situation. 

The French Minister of the Economy has specifically asked the DGCCRF to monitor the compliance of companies with French payment terms legislation.  Accordingly, parties must continue to comply with standard or agreed payment terms and, in particular, may not, even if they agree, extend such terms beyond the ceilings provided by French law. 

Failure to pay within the standard or agreed payment term may lead to the payment of:

• late payment penalties from the day following the date of payment shown on the invoice or, in case parties have not agreed on payment terms, on the 31st day following the date of receipt of the goods or the end of the performance of the service;
  In this respect, and unless otherwise provided for in the contract, the rate of these late payment penalties is equal to the interest rate applied by the European Central Bank to its most recent refinancing operation plus 10 percentage points. However, the parties may agree on a lower rate, being specified that this agreed rate may not be lower than three times the legal interest rate (the interest rate applicable for the second semester of 2021 is of 0,76%, i.e. 3x0,76% = 2,28%).
   
• a fixed charge of forty (40) euros to cover recovery costs (if the recovery costs exposed are higher than the amount of this fixed charge, the other party may ask for additional compensation).