Pledging of receivables: ordinary law, dailly slip and specific features

By Yasmine EDDAM13 June 2025

For a company director, trade receivables often represent a major asset, but their value remains latent until they are paid. Yet these receivables can be turned into a lever for financing or a solid guarantee against a buyer. The pledge of receivables is the legal mechanism that makes this possible, offering tangible security to secure a credit transaction or a commercial commitment. This tool, although technical, is proving highly effective in business life. To understand it properly, it is essential to understand the all forms of pledging. This article sets out the rules governing pledges of receivables, from the common law framework to specific applications such as assignment or pledging by means of a bordereau Dailly.

Pledging of receivables under ordinary law: a framework defined by the Civil Code

Defined by article 2355 of the French Civil Code, pledging is a security interest, i.e. a guarantee given over intangible movable property to secure an obligation. In the case of a debt, this mechanism gives the beneficiary creditor (the pledged creditor) a preferential right to the debt in the event of default by its own debtor (the grantor). In practical terms, a company holding a large invoice from a customer can pledge it to its bank to obtain a loan. If the company does not pay its debt, the bank can obtain payment directly from the buyer (the company's customer). The Order of 23 March 2006 modernised this system, making it more flexible and effective, in particular by abolishing the former requirement to hand over the document of title.

The creation of a pledge: the requirement for a written document

The validity of a pledge of a claim under ordinary law is subject to the drawing up of a written document, as provided for in article 2356 of the Civil Code. This document may be a notarised deed drawn up by a notary, or a simple private deed, a copy of which must be kept by each party. This requirement is a condition of validity, on pain of nullity: in its absence, the pledge is null and void. The document must identify the secured claim (for example, the loan to be secured) and the pledged claim (the invoice to a buyer). A future claim may be pledged, provided that it is sufficiently identifiable by a set of information such as the identity of the debtor, the place of payment, its amount or its due date. It is vital that the pledge document is precise enough to prevent any dispute over the basis of the guarantee.

Enforceability: how to make the guarantee effective against the debtor and third parties

Once it has been validly constituted, the pledge of a claim must be made enforceable in order to produce its full effects. The law makes a distinction. On the one hand, as regards third parties (other creditors of the pledgor), the pledge is enforceable from the date of the deed, in accordance with article 2361 of the Civil Code. Although it is not compulsory to record the private deed in a public register, it is recommended that this be done in order to give the deed a date certain and to rule out any discussion about its anteriority. Secondly, to be enforceable against the debtor of the pledged receivable (the buyer who must pay the invoice), the pledge must be notified to him, or he must have intervened in the deed. This notification, provided for in article 2362 of the Civil Code, is a key stage. From that point onwards, the purchaser of the pledged claim can no longer validly pay his debt in the hands of his original creditor. He must pay it to the pledged creditor if the latter so requests in order to obtain payment of his claim.

The effects of pledging under ordinary law

The rights and obligations of the parties vary depending on when the pledged claim becomes due in relation to the principal debt it secures. The law has clarified the management of funds and the procedures for realising this security.

What happens to payments received before the guaranteed debt matures?

It is not uncommon for the receivable pledged as security (for example, an invoice payable within 60 days) to mature while the loan it secures is still running for several years. If the pledge has been notified, only the pledged creditor has the right to receive payment of the claim. A buyer who pays the grantor runs the risk of having to pay a second time. However, the secured creditor cannot appropriate these funds immediately, as his own claim is not yet due. Article 2364 of the Civil Code requires him to keep the sums received in a special account opened with an authorised institution. This money remains earmarked to guarantee its claim, effectively exercising a right of retention in favour of the beneficiary until the claim falls due, protecting the secured creditor while ensuring that the payment is not used prematurely.

Enforcement of security interests: between judicial assignment and commissory agreement

When the secured debt reaches maturity and the debtor defaults, the pledgee can enforce its security. There are several options available. If the maturity date of the pledged claim has already passed and the funds are available, he can allocate them to himself up to the amount of his own claim. If there are no funds available, the pledgee may apply to the courts for the pledged claim to be allocated. Above all, the law has validated a very effective practice: the commissory agreement. Article 2365 of the Civil Code authorises the parties to agree, at the time the pledge is made, that in the event of the debtor's default, the creditor will automatically become the owner of the pledged claim, thereby effecting a form of forced assignment. This contractual assignment must be accompanied by an estimate of the fair price of the claim by an expert on the day of the transfer to avoid any abuse. However, this powerful mechanism has one major limitation, as we shall see.

Mobilising trade receivables: the Dailly slip

Despite its modernisation, pledging under ordinary law retains a certain formalism. Banking practice has therefore adopted a highly effective tool, inspired by the Dailly Act and governed by a dedicated chapter of the Monetary and Financial Code.

A simplified mechanism for companies and credit institutions

Pledging business receivables by means of a "bordereau Dailly" is a mechanism reserved for loans granted by a credit institution to a business or professional. Its main advantage is its simplicity. The pledge is created by simply handing over a single slip, which constitutes a simplified document of title. This single document, dated and signed by the assignor (the company), makes the transaction immediately enforceable against third parties and each buyer, without any further notification formalities. This mechanism makes it possible to quickly secure a large volume of receivables, which is common practice for companies seeking to optimise their cash flow with a view to repaying their own debts.

Dailly assignment versus Dailly pledge: what is the difference in practice?

This single instrument, the Dailly slip, enables two distinct transactions to be carried out: the assignment of receivables and the pledging of receivables. Although both use the same medium (the bordereau), their effect is different. The Dailly pledge creates a preferential right for the beneficiary creditor, similar to the pledge under ordinary law. On the other hand, a Dailly assignment transfers ownership of the debt from the assignor to the beneficiary bank. The latter becomes the new holder of the debt. In practice, credit institutions largely favour the cession Dailly, as this technique for assigning business receivables gives them maximum security by removing them from the competition with the debtor's other creditors in the event of the assigning company experiencing difficulties. Dailly assignment is therefore often the preferred response to a need for rapid financing.

Other forms of special pledge on receivables

Collateral law has provided specific regimes for other types of claims, reflecting the need to adapt the collateral to the nature of the intangible asset concerned.

Pledging a bank account: security for a fluctuating balance

Article 2360 of the Civil Code provides for the possibility of pledging the specific claim, an intangible personal property par excellence, represented by the credit balance of a bank account. The basis of this security is by its very nature fluid, with the balance of the account fluctuating according to transactions. The law stipulates that the security relates to the balance of the account on the day the security is realised. In the event of the opening of insolvency proceedings, the basis of the security is fixed: it is determined by the balance of the account on the day of the opening judgment, as confirmed by the Court of Cassation. The exact legal nature of this pledge and its relationship with the rules of set-off have raised questions, but its practical usefulness as a guarantee for cash credit is certain.

Pledging of public contracts: a historic security right under threat

The French Public Procurement Code (Code de la commande publique - CCP) provides for a pledging mechanism for claims that the contract holder (the company) holds against a public entity in respect of the performance of works, supplies or services for that contract. Historically, this was an essential tool for financing public contract holders. The formalism of this pledge, which implies, according to article R2191-46 of the CCP, the delivery of a single copy or a certificate of transferability of the contract, makes it less attractive today. This is followed by notification to the public purchaser and the public accountant responsible for assigning the contract. This information must also be sent to the DAJ of the public entity. The public accountant is the keystone of the system. The accountant's opinion is essential. Once notified, the accounting officer can only be released by the creditor. The role of the public accountant is therefore central, much more so than that of a simple company accountant. This formalism is in strong competition with the assignment of receivables by Dailly slip, which is simpler and quicker to implement for banks and companies, and which can also relate to a receivable from a public order.

Pledging of business and life insurance: specific applications

Other intangible assets can be pledged, subject to specific rules. Pledging a business, for example, is a very common form of security that must be entered in a special register held at the commercial court registry. Other assets, such as insurance contracts, may also be the subject of specific arrangements, such as pledging by the company. pledge of life insurance policieswhich has to be built up and produced in a specific way.

Practical issues and risks: pledging in insolvency proceedings

The effectiveness of a pledge of receivables is measured above all when the debtor encounters financial difficulties. The opening of collective proceedings (safeguard, receivership or liquidation) has major consequences for the fate of the collateral. This rule also applies to provisional judicial pledges that have not been definitively registered. The first rule is that the pledged creditor must declare his claim and his pledge as liabilities of the proceedings. Above all, the collective proceedings paralyse the commissory agreement. Even if it has been validly agreed, the creditor will not be able to claim the pledged debt after the opening judgment. This public policy provision is designed to protect the integrity of the debtor's assets and the rights of other creditors. The final outcome will depend on the nature of the proceedings and the decisions of the official receiver or the Commercial Court. The difference between an assignment of a claim by way of security (Dailly type) and a simple pledge takes on its full meaning here: the beneficiary of the assignment, being the owner of the claim on the purchaser, is in principle outside the ambit of creditors, except in the event of legal action challenging the price or the validity of the assignment itself, which offers him much greater protection.

Choosing and implementing a pledge of receivables requires a precise analysis of the nature of the receivable and the objectives pursued. Careful drafting of the pledge deed, which is the guarantee's identity card, is essential to guarantee its legal effectiveness, particularly in the event of the debtor's default. To secure your financing operations and benefit from tailor-made support, our expertise in securities and guarantees is at your disposal.