Simple or joint surety

Last update: 25 March 2026 - consolidation and expansion of the guide to surety bonds

You have stood surety for a relative or business partner, and the creditor is demanding full payment of the debt. Do you have the right to refuse? That depends on the type of guarantee you have taken out - and the protection you are afforded by law. The guarantee system was radically overhauled by Order no. 2021-1192 of 15 September 2021, which came into force on 1 January 2022. This guide provides an update on the applicable rules.

Simple surety and joint surety: two very different commitments

A suretyship is a contract by which a person - the guarantor - undertakes to pay a creditor the debt of the principal debtor if the latter fails to perform (article 2288 of the Civil Code, as amended). The definition may seem simple. The practical consequences are considerable.

A simple guarantee: a subsidiary undertaking

A guarantor pays only as a last resort. They have two essential prerogatives:

• Le benefit of discussion (article 2305 of the Civil Code): the guarantor may demand that the creditor first sue the principal debtor against his assets. The creditor must exhaust all means of enforcement against the debtor before taking action against the guarantor.
• Le divisional profit (article 2306 of the Civil Code): where several persons have acted as sureties for the same debtor, each may require the creditor to divide his claim between them in proportion to their respective commitments.

In practice, simple guarantees have become rare in banking relationships. Credit institutions rarely accept it, precisely because it delays and complicates debt collection.

Joint and several guarantee: a front-line commitment

The joint and several guarantor waives the benefits of discussion and division. The creditor can sue the guarantor directly, without even having attempted to obtain payment from the principal debtor. This is the form of guarantee that banks systematically require for business loans and, very often, for home loans.

Solidarity cannot be presumed: it must be expressly stipulated in the guarantee deed. Since the reform, the formalities of the deed of guarantee have been unified, whether the guarantee is civil or commercial (article 2297 of the Civil Code).

Protection of the security deposit

Being a joint guarantor does not mean being defenceless. The legislator has created a protective system that will be strengthened by the 2021 reform.

The duty to warn

Article 2299 of the French Civil Code now requires a professional creditor to warn a guarantor who is an individual if the undertaking is «unsuited to the financial capacity» of the guarantor. This obligation, previously based on case law, is now enshrined in law.

Failure to comply with the duty to warn results in the creditor losing the right to rely on the guarantee to the extent of the loss suffered by the guarantor. The creditor bears the burden of proving that this obligation has been fulfilled.

The proportionality requirement

Article 2300 of the Civil Code stipulates that a guarantee given by a natural person to a professional creditor must be proportionate to the income and assets of the guarantor at the time the contract is entered into. The major change in the reform is the penalty: disproportionate guarantees are no longer subject to total forfeiture. It is reduced to the amount to which the guarantor could commit. The penalty is now proportional to the defect, which is fairer and more favourable to creditors than the old system.

Please note: proportionality is assessed at the time the contract is entered into, not at the time the guarantor is called upon to pay. A subsequent deterioration in the guarantor's financial situation does not call into question the validity of the undertaking.

The obligation to provide annual information

Each year before 31 March, the professional creditor must inform the guarantor of the amount of principal and interest, commissions and charges outstanding at the previous 31 December. If the guarantor fails to do so, he or she is not obliged to pay the interest accrued since the previous notification. This obligation already existed before the reform; it is maintained and clarified.

The obligation to notify in the event of default

L'article 2303 of the Civil Code, The 2021 reform requires professional creditors to inform any individual guarantor of the principal debtor's default as soon as the first payment incident is not cleared within one month of the due date.

The penalty is severe: if you fail to notify the bank within this period, the creditor forfeits the guarantee for interest and penalties accrued between the date of the incident and the date on which the guarantor was actually informed. In practical terms, if the bank waits six months before notifying you that the borrower is no longer paying, it cannot claim from you the interest and penalties accrued during those six months of silence.

The text adds an imputation rule favourable to the guarantor: payments made by the debtor during the waiting period are imputed first to the principal of the debt, and not to the interest. This is a powerful defence, which is still under-exploited in practice.

Reform of surety bonds: the key changes in the Order of 15 September 2021

Order no. 2021-1192 recasts Title I of Book IV of the Civil Code. The former provisions, which were split between the Civil Code, the Consumer Code and the Monetary and Financial Code, are now grouped together in the Civil Code. Three changes merit particular attention.

A unified formalism

Prior to the reform, civil guarantees were subject to the compulsory handwritten statement set out in the former article 1326 of the Civil Code, while commercial guarantees were exempt from this requirement. Article 2297 of the Civil Code now requires a single compulsory statement, This applies regardless of the civil or commercial nature of the guarantee. The guarantor, who is a natural person, must sign a statement in which he undertakes as guarantor to pay the creditor what he is owed by the debtor, up to a maximum amount in principal and ancillary sums expressed in words and figures.

The endorsement no longer needs to be handwritten in the strict sense: a deed signed electronically is valid, provided that the endorsement has been affixed by the guarantor himself.

The end of the distinction between personal and inherent exceptions to the debt

Under the old regime, the guarantor could only raise against the creditor defences inherent in the debt, to the exclusion of defences that were purely personal to the debtor. This distinction, the source of much litigation, has been abandoned. Article 2298 of the Civil Code now provides that the guarantor may raise all defences belonging to the principal debtor, whether personal to the latter or inherent in the debt, subject to defences strictly linked to the debtor's incapacity.

The new commerciality criterion

Article L.110-1, 10° of the French Commercial Code now classifies the guarantee of a commercial debt as a commercial transaction when the guarantor has a financial interest in the transaction guaranteed. An executive who guarantees his company's debt is therefore engaging in a commercial transaction - which brings the matter within the jurisdiction of the Commercial Court and the application of the rules of commercial evidence.

Executive guarantees: business loans and specific risks

Obtaining a business loan without committing your personal signature is, for the director of an SME, wishful thinking. Banks almost always require the manager or chairman to provide a joint and several guarantee, sometimes for the entire loan, sometimes for a percentage of the capital borrowed. The commitment seems abstract at the time of signing. It becomes very concrete when the company can no longer pay.

The executive's personal assets on the front line

The executive's joint and several guarantee blurs the boundary between business and personal assets. If the company defaults, the bank can sue the director on his own assets: personal bank accounts, family property and savings. If the company goes into liquidation, this does not change anything - in fact, this is the scenario in which the guarantor is most brutally sued, since there is no suspension of proceedings to protect the guarantor in liquidation.

The risk is all the greater because managers often sign several successive guarantees: one for the initial investment loan, another for the credit line, and a third for a cash flow loan. This accumulation can far exceed the manager's actual financial capacity.

Disproportionality and the banking pool: overall debt counts

Article 2300 of the Civil Code takes on a particular dimension here. The proportionality of the guarantee is assessed in the light of all the guarantor's commitments, and not just the guarantee at issue. Where several banks have financed the same transaction under a banking pool, Each of them must take into account the guarantees given on behalf of the other lenders.

The Court of Cassation confirmed this principle in a ruling dated 22 January 2025 (Cass. com., 22 Jan. 2025, no. 23-22.093): a bank that is a member of a pool cannot be unaware of the existence of other guarantees taken out by the director for the benefit of the other members of the pool. Overall indebtedness must be taken into account when assessing proportionality. A guarantee that appears reasonable in isolation may become disproportionate when combined with other commitments.

Limiting risks: negotiate before signing

The reflex of an executive who signs as guarantor should be to negotiate the terms of his commitment before signing, not afterwards. There are several ways to do this. The capping the guaranteed amount is the most obvious: you don't have to guarantee 100 % of the loan. A commitment of 50 % of the capital borrowed may be enough to convince the bank while limiting exposure. The duration of the commitment is also worth discussing: a guarantee for a limited period of time is less dangerous than a commitment for an indefinite period.

There are alternatives to personal guarantees, such as pledging a business, the’mortgage on a company asset, or the delegation of insurance. These security interests have the advantage of limiting the risk to an identified asset, without committing the entire personal estate.

Have the guarantee contract analysed by a lawyer in bonding law before signing is not a luxury - it's a basic precaution when hundreds of thousands of euros of personal assets are at stake.

Surety bonds and insolvency proceedings: a minefield

The opening of insolvency proceedings against the principal debtor has contrasting effects on the guarantor. This is a decisive issue for managers who have acted as guarantors for their company's debts, which is the case for the vast majority of SME financing.

The ancillary nature of the guarantee in relation to its purpose

A surety bond is an accessory contract: it follows the fate of the principal obligation. But its very purpose is to protect the creditor against the debtor's default. These two principles come into conflict when the debtor is the subject of collective proceedings.

As a result, the statement of claim (Cass. com., 12 July 2017, no. 16-10.793). On the other hand, the remission of debt granted as part of a reorganisation plan benefits the guarantor, by virtue of its ancillary nature.

Stay of proceedings in safeguard and reorganisation cases

In the backup, Article L.622-28 of the French Commercial Code suspends proceedings against individual guarantors for the duration of the proceedings and the implementation of the plan. This protection is the most extensive: it covers the observation period, the plan and even any grace periods.

Visit legal redress, The suspension of proceedings against natural person guarantors applies during the observation period and during the implementation of the plan (article L.631-14 referring to L.622-28). It ceases if the plan is terminated.

Visit compulsory liquidation, No suspension is provided for. The creditor may take legal action against the guarantor from the time of the opening judgment, including the guarantor as an individual.

Current account guarantees: special features

Guaranteeing a current account raises its own difficulties. The guarantor guarantees the debit balance of the account, which is constantly changing. Does the opening of insolvency proceedings entail the definitive fixing of the guaranteed debt?

The answer is nuanced. If the current account is maintained after the opening of the proceedings (which is common in safeguard and reorganisation proceedings), the surety only guarantees the balance existing on the date of the opening judgment. Subsequent transactions are not covered by the previous guarantee, unless there is an express clause to the contrary.

The guarantor may also invoke the five-year foreclosure article 2319 of the Civil Code, which provides that the guarantor is discharged if the creditor has not declared his claim to the principal debtor's insolvency proceedings within the required time limit. If you are a guarantor and the bank has failed or delayed to declare its claim, this is a defence that should be raised without delay. our lawyers in bonding law can help you with this analysis.

Coverage obligation and settlement obligation

The 2021 reform clarified a fundamental distinction, now codified in article 2316 of the Civil Code. The obligation to cover refers to the guarantor's undertaking to guarantee the debtor's future debts (in an omnibus guarantee or a current account guarantee, for example). The obligation to pay is the obligation to pay debts that have already arisen and are due.

The practical interest is considerable: the covering obligation may be revoked for the future (article 2316, paragraph 2), while the settlement obligation subsists for all debts arising before the revocation. In the event of the guarantor's death, the coverage obligation is extinguished; only the settlement obligation passes to the heirs, up to the limit of the assets of the estate.

This distinction is essential for guarantors who have guaranteed an open-ended commitment and wish to terminate it.

Other forms of guarantee

Contractual, legal and judicial surety bonds

A guarantee does not always arise from a freely negotiated contract. Three sources coexist. The conventional surety is the most common: it results from the will of the parties, such as the bank guarantee of the manager or that of the tenant. The legal guarantee is required by law in certain situations - article 601 of the Civil Code obliges the usufructuary to provide security to guarantee the conservation of the property, and article 815-6 may lead the court to make an urgent measure in joint ownership subject to the provision of security. The court-ordered surety bond, is ordered by a judge, typically to guarantee the provisional enforcement of a decision.

Whatever its origin, a guarantee is subject to the same basic rules. The distinction is particularly important in terms of formalism: articles 2297 et seq. of the Civil Code, which require a written statement by the guarantor as an individual, apply only to contractual guarantees.

Sub-bonding and bond certification

Article 2291 of the Civil Code (as amended) provides that you may act as surety for the person who has guaranteed the principal debtor. This is the sub-bond The sub-guarantor does not guarantee the creditor, but the first-ranking guarantor. If the guarantor is sued and pays, it can turn against the sub-guarantor to obtain reimbursement. The creditor has no direct link with the sub-guarantor.

La guarantee certification is the opposite mechanism. The guarantor guarantees the creditor that the surety is solvent. Unlike the sub-guarantor, the guarantor is committed directly to the creditor - but only on the guarantor's solvency, not on the principal debtor's debt.

A recent ruling by the Commercial Chamber (Cass. com., 9 Oct. 2024, no. 22-18.093) clarified the rules of prescription applicable to sub-guarantees, pointing out that the starting point for the prescription of the guarantor's action against the sub-guarantor runs from the payment made by the guarantor, and not from the principal debtor's default.

Bond, independent guarantee and letter of intent

Guarantees are not the only personal surety under French law. Alongside surety bonds, the Civil Code provides for two other mechanisms: autonomous guarantees and letters of intent. The choice between these three instruments depends on the degree of protection desired by the creditor and the level of risk acceptable to the guarantor.

The independent guarantee (article 2321 of the Civil Code)

An autonomous guarantee is an undertaking by which the guarantor undertakes to pay a sum to the beneficiary, either on first demand or on agreed terms, in consideration of an obligation entered into by a third party. The difference between an autonomous guarantee and a surety bond is radical. independent of the guaranteed obligation. The guarantor may not raise any defence arising from the basic contract - neither nullity, nor rescission, nor extinction of the principal debt.

There is a downside to this independence: the guarantor is not liable in the event of manifest abuse or fraud by the beneficiary, or collusion between the beneficiary and the principal. But the threshold is high. Manifest abuse requires evidence, not reasonable doubt.

The autonomous guarantee is an instrument of international trade and structured financial transactions. In internal relations between a manager and his bank, guarantees are the most common form of security.

The risk of reclassification as a guarantee

The distinguishing criterion is the purpose of the undertaking. If the guarantor undertakes to pay what the principal debtor owes - i.e. if the guarantor's obligation has the same object as that of the debtor - the undertaking is a suretyship, whatever it may be called. The Court of Cassation regularly penalises poorly drafted autonomous guarantees (Cass. com., 24 March 2021, no. 19-14.082).

Reclassification is not neutral: it subjects the undertaking to the formalities of a surety bond (compulsory wording, proportionality, annual information) and allows the guarantor to invoke all the exceptions drawn from the main contract. For the banking law practitioner, The wording of the clause is therefore decisive. Ambiguous wording can cause an autonomous guarantee to fall under the regime of a surety bond, which is much more protective of the guarantor.

Letter of intent

L'Article 2322 of the Civil Code defines a letter of intent as an undertaking to do or not to do, the purpose of which is to support a debtor in the performance of his obligation. The legal definition is deliberately broad. A letter of intent can range from a simple moral commitment («we will make our best efforts») to an obligation of result akin to a guarantee («we will ensure that our subsidiary is able to pay»).

The scope of the letter depends entirely on how it is drafted. The courts distinguish between letters that only impose an obligation of means (classic contractual liability, with proof of fault on the part of the creditor) and those that impose an obligation of result (the comforting party must compensate the creditor if the debtor does not pay, without the creditor having to prove fault).

In summary: the guarantee is accessory - it follows the fate of the principal debt. The autonomous guarantee is independent - the guarantor pays without being able to invoke the exceptions of the basic contract. The letter of intent is variable geometry - its force depends on what the parties have written in it.

Frequently asked questions

What is the difference between a simple guarantee and a joint and several guarantee?

A simple guarantor may demand that the creditor sue the principal debtor first (benefit of discussion) and, if there are several guarantors, that the debt be divided between them (benefit of division). A joint and several guarantor waives these two protections: the creditor can take direct action against the guarantor for the entire debt.

What protection does the law give to guarantors?

There are three main safeguards: the professional creditor's duty to warn (article 2299 of the Civil Code), the requirement that the commitment be proportionate (article 2300), and the obligation to provide annual information. Since the 2021 reform, disproportionate guarantees are no longer cancelled but reduced to the amount that the guarantor could have committed to.

Does the opening of insolvency proceedings protect the guarantor?

In safeguard and receivership proceedings, proceedings against individual guarantors are suspended during the proceedings and the implementation of the plan. In the event of judicial liquidation, there is no suspension: the creditor may take legal action against the guarantor immediately.

Can a guarantor revoke his undertaking?

If the guarantee is for an indefinite period, the guarantor may revoke his obligation to provide cover for the future (article 2316 of the Civil Code). The guarantor remains obliged to pay any debts already incurred at the date of revocation (settlement obligation).

What types of guarantee are there?

Guarantees may be contractual (freely agreed by the parties), legal (imposed by law, for example the obligation of the usufructuary to provide a guarantee) or judicial (ordered by a judge, in particular to guarantee provisional enforcement). It may be simple or joint and several, civil or commercial. Commercial guarantees require the guarantor to have a financial interest in the guaranteed transaction (article L.110-1, 10° of the French Commercial Code).

What is the difference between a surety bond and an independent guarantee?

A guarantee is ancillary: it follows the same course as the principal debt, and the guarantor may raise all of the debtor's objections against the creditor. The autonomous guarantee (article 2321 of the Civil Code) is independent: the guarantor undertakes to pay a sum in consideration of an obligation entered into by a third party, without being able to invoke the exceptions drawn from the basic contract. The distinguishing criterion is the purpose of the undertaking: if the guarantor promises to pay what the debtor owes, it is a surety bond.

Sources

• Article 2288 of the Civil Code - Definition of a surety bond
• Article 2291 of the Civil Code - Sub-bonding
• Article 2297 of the Civil Code - Formalities of the guarantee
• Article 2298 of the Civil Code - Exceptions enforceable by the guarantor
• Article 2299 of the Civil Code - Duty to warn
• Article 2300 of the Civil Code - Proportionality
• Article 2303 of the Civil Code - Notification of failure
• Article 2305 of the Civil Code - Discussion benefits
• Article 2306 of the Civil Code - Division profit
• Article 2316 of the Civil Code - Coverage and settlement obligations
• Article 2319 of the Civil Code - Five-year foreclosure
• Article 2321 of the Civil Code - Stand-alone warranty
• Article 2322 of the Civil Code - Letter of intent
• Order no. 2021-1192 of 15 September 2021 reforming the law on securities
• Article L.622-28 of the French Commercial Code - Stay of proceedings
• Cass. com. 22 January 2025, no. 23-22.093 - Proportionality and the banking pool
• Cass. com. 9 October 2024, no. 22-18.093 - Prescription and sub-bonding
• Cass. com., 24 March 2021, no. 19-14.082 - Reclassification of an autonomous guarantee as a bond