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Commercial transactions: how to classify your transactions and anticipate their legal consequences

By Yasmine EDDAM4 April 2025

Under French law, the classification of an act as a "commercial act" entails the application of a specific legal regime. This distinction, far from being purely theoretical, has a direct impact on the rights and obligations of companies and individuals alike. What acts are considered commercial? What special rules apply? And above all, what advantages or risks does this classification represent for your business?

The concept of a commercial transaction: a complex legal construct

French commercial law does not define precisely what constitutes a commercial act. The Commercial Code (articles L.110-1 and L.110-2) merely lists them, without any real unifying criterion.

This enumerative approach has obvious limitations. It does not always make it possible to anticipate the classification of a new or atypical act. To make up for this shortcoming, case law and academic writers have developed a number of identification criteria.

Case law has gradually relaxed the initial restrictive interpretation. Today, the list of commercial acts is no longer considered exhaustive. Acts not expressly mentioned may be classified as trading acts if they have characteristics similar to those listed by law.

The search for a general criterion: an unfinished quest

Several criteria have been proposed to unify the concept:

SpeculationFor a long time, this was considered to be the hallmark of a commercial act, but it is now proving to be insufficient. Non-commercial professions such as farmers and the self-employed also seek to make a profit.
The movement of goodsThis criterion, proposed by Thaller, does not take into account industrial activities or real estate transactions.
The companyA concept that is too imprecise and goes beyond the strict framework of commerce.

These attempts demonstrate the difficulty of encompassing diverse economic realities under a single criterion. In practice, the courts adopt a pragmatic approach, examining each act on its own merits.

Categories of commercial transactions: a pragmatic classification

The French Commercial Code distinguishes between several categories of commercial acts, each with its own logic.

Commercial deeds by form

These acts are commercial by virtue of their legal form, irrespective of their purpose or the status of the parties:

Bills of exchangecommercial title "between all persons" (article L.110-1, 10° of the French Commercial Code)
Commercial companies by formgeneral partnerships, limited partnerships, limited liability companies, joint stock companies (article L.210-1 of the French Commercial Code)

History sheds light on this automatic classification. After the Panama Canal scandal (1889), the legislator wanted to subject certain companies to commercial law to protect investors, regardless of their actual activity.

Commercial acts by nature

These acts form the core of commercial law. They are commercial by virtue of their purpose:

Buying to resellThis is the traditional basis of trade, and involves three elements:
- A purchase (transfer of ownership for a consideration)
- An intention to resell (speculative purpose)
- Movable or immovable property (since 1967 for the latter)
The factoryprocessing of raw materials involving "speculation on the labour of others".
The provision of servicesintermediary activities, furniture rental, transport, financial transactions

In a ruling handed down on 12 March 2013, the Court of Cassation stated: "The commercial nature of the deed is assessed at the date on which it was concluded, regardless of whether the author has since lost his status as a trader".

Incidental commercial acts

A civil deed may "borrow" the commerciality of a commercial deed to which it is attached:

Acts performed by a trader in the course of his businessAccording to article L.110-1, 9° of the French Commercial Code, "all obligations between traders, merchants and bankers" are deemed to be commercial transactions.
Certain acts performed by non-traders: transfer of a business, transfer of control of a commercial company, commercial guarantees.

These case law extensions meet practical needs and enable the commercial regime to be applied to situations that justify it economically.

The practical consequences of commercial classification

The classification of a transaction as a commercial transaction entails the application of rules that depart from civil law. These rules are designed to promote the speed and security of commercial transactions.

Jurisdictional competence

Commercial acts come under the jurisdiction of the commercial courts (article L.721-3 of the French Commercial Code). This specialised court offers:

A faster procedure
Judges from the business world
A more concrete understanding of economic realities

In the case of a mixed deed (commercial for one party, civil for the other), the non-trading party has the option of bringing the matter before either the civil court or the commercial court.

Freedom of proof

In commercial matters, proof is free (Article L.110-3 of the French Commercial Code): "With regard to traders, commercial acts may be proven by any means".

This freedom frees merchants from the requirements of article 1341 of the Civil Code (need for a written document in excess of €1,500). A testimonial, an accepted invoice or correspondence are sufficient to prove a commercial commitment.

This rule promotes the fluidity of exchanges, but only applies to traders. Non-traders retain the benefit of civil rules of evidence.

Other specific rules

Presumption of solidarityUnlike civil law, where joint and several liability must be expressly stipulated, joint and several liability is presumed between commercial co-debtors.
Shortened limitation periodCommercial obligations are subject to a 10-year statute of limitations (article L.110-4 of the French Commercial Code), instead of 30 years in civil matters.
Special rules for certain contractsCommercial sales allow for a "rebate" (judicial reduction of the price) in the event of a partial defect, a solution unknown in civil law.
Arbitration clausesArbitration agreements: valid between merchants, they allow future disputes to be submitted to arbitration.

Areas of friction and problem situations

Classification as a commercial act can give rise to practical difficulties:

The situation of mixed activities

Some activities combine civil and commercial operations:

A farmer who processes and markets his produce
An artist who sells not only his own work but also that of other creators
A self-employed professional who sells products as an adjunct to his services

Case law generally applies the theory of the accessory: the principal activity determines the nature of the whole. While this solution seems logical, it sometimes creates artificial situations.

The special case of guarantees

The guarantee provided by a company director to secure his company's debts illustrates the complexity of the system. The Court of Cassation considers that this guarantee is commercial if the director has a "personal interest in the company's assets".

This case law, which dates back to the 1980s, has created a significant body of case law. It allows commercial law to be applied to people who are not formally merchants.

The impact of consumer law

Consumer law has gradually created a new distinction between professionals and consumers, superimposed on the traditional civil/commercial dichotomy.

This phenomenon, combined with other developments (extension of insolvency law to non-traders), is leading to a blurring of the traditional distinction.

Anticipating the consequences of commercial qualification

For entrepreneurs and managers, there are a few points worth highlighting:

Properly assess the nature of your business
- A mixed activity will be qualified according to its principal character
- Commercial intent (purchase for resale) is decisive
Organise your business in line with its qualifications
- Commercial accounting is compulsory for business transactions
- Different rules of evidence call for different precautions
Anticipating potential disputes
- Identifying the competent court (civil or commercial)
- Know the applicable rules (solidarity, statute of limitations, etc.)
Measuring the financial implications
- Certain guarantees (such as surety bonds) may be governed by different rules
- Insolvency proceedings are governed by specific rules

The classification of an act as a commercial act is never trivial. It has substantial consequences that need to be anticipated.

For a precise analysis of the classification of your activities and operations, our firm can help you identify the risks and opportunities associated with the commercial regime. Early consultation can often avoid costly litigation or unfavourable classifications.