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Bills of exchange: managing the unexpected (non-payment, loss, theft, stop payment)

By Yasmine EDDAM11 April 2025

If the bill of exchange offers guarantees to secure payment, it does not eliminate all risks. Persistent non-payment, physical loss of the document, theft or other incidents can occur and seriously complicate the creditor's situation. How can you react effectively in these circumstances? Cambiary law provides for specific mechanisms for asserting rights, but also for pitfalls that can lead to their loss.

When a bill of exchange is not paid on the due date, or if an incident such as loss or theft occurs, it is essential to know the steps to be taken and the deadlines to be respected. This article details the remedies available in the event of non-payment, the procedures to follow if the bill of exchange disappears, and the very strict rules governing stop payment.

Default of payment: exercising foreign exchange remedies

Where the drawee fails to pay the bill of exchange on the due date, and after having, where appropriate, drawn up protest for non-payment (see previous article), the holder can take specific action to recover his debt: Cambodian recourse.

Initiation of appeals

In the event of refusal of acceptance (total or partial) by the drawee, as evidenced by a protest.
In the event of collective procedure (safeguard, receivership or compulsory liquidation) opened against the drawee, whether or not it has accepted the bill of exchange.
In the event of suspension of payments of the drawee, even if not established by a judgment, or seizure of his property that has remained unsuccessful (these cases require a protest).
In the event of collective proceedings initiated against the drawer of a bill of exchange stipulated as "not acceptable".

In these situations, the holder does not have to wait for the maturity date, which is considered compromised, to take action against the guarantors.

The unpaid holder's guarantee action

This is the main action of the last legitimate holder who has not been paid. Thanks to the solidarity with Cambodiahe can take action against all signatories of the bill of exchange (drawer, drawee acceptor, endorsers, guarantors) without having to follow a specific order. He may sue them individually or collectively (article L. 511-44 of the French Commercial Code).

To bring this action, the bearer must be able to produce the original bill of exchange and the protest (unless exempted). He may claim :

The amount of the unpaid bill of exchange.
Contractual interest, if stipulated and valid.
Interest at the legal rate from the due date (or the date of presentation if it is late).
Costs of protests, notices and other costs incurred for recovery (article L. 511-45).

To reinforce his action, the wearer may even, with the judge's authorisation, perform a precautionary seizure on the movable property of guarantors (article L. 511-51).

Recourse actions by guarantors who have paid up

When a guarantor (drawer, endorser, avaliste) pays the bill of exchange in place of the principal debtor (the drawee), he does not extinguish the debt for everyone. He is subrogated in the rights of the holder whom it has paid off, and may in turn exercise a right of withdrawal. recourse action to be reimbursed.

Against whom? It can only act against its own guarantorsi.e. signatories who have committed to before him on the draft. An endorser may sue the previous endorsers and the drawer. The drawer can only take action against the accepting drawee (if he had provided provision). The guarantor can take action against the person he has guaranteed and the guarantors of the latter.
Amount claimed : A guarantor who has paid may claim the full amount he has paid, statutory interest on that amount since the date of payment, and the costs he has incurred for his own recourse (article L. 511-46).

The person bringing a recourse action must be able to produce the bill of exchange paid by him, as well as the protest and the account of the sums paid (article L. 511-47).

Rechange: an alternative to legal recourse

To avoid legal action, the person with a right of recourse (the unpaid holder or the guarantor who has paid) can use a technique known as "substitution". This consists of drawing a new bill of exchangeknown as "retirement", on sightThe amount due (principal, interest, costs, plus brokerage fees and the pension stamp) is paid by the borrower to one of its own guarantors. This pension allows faster repayment, but is itself subject to the rules of the exchange (articles L. 511-62 to L. 511-64).

Warning: you may lose your right of recourse

Cambiary law is demanding of the bearer. If he fails to take certain steps or is too slow to act, he may lose his rights of recourse.

Forfeiture for negligence on the part of the holder

The bearer is considered to be negligent and loses his rights of recourse against the endorsers, the drawer and the other obligees (except the acceptor) in three main cases defined by Article L. 511-49 of the French Commercial Code:

Failure to submit in good time a bill of exchange payable at sight or on demand.
Failure to draw up a protest failure to accept or pay within the legal time limit (when a protest is compulsory).
Failure to make payment within the legal time limit when there was a "return free of charge" clause (which dispenses with the protest but not the presentation).

This forfeiture is a severe sanction. It must be invoked by the guarantor who wishes to take advantage of it (it is not a matter of public policy). It completely frees the endorsers and the drawer. who had provided. On the other hand, the accepting drawee remains liable (his liability is direct), as does the drawer who had not provided provision (because he suffers no prejudice from the bearer's negligence). Avalists are generally discharged if the person they guaranteed is also discharged.

It is possible to waive the forfeiture, even tacitly, but the waiver must be certain.

The passage of time: the prescription period

Even if the bearer has been diligent, he cannot wait indefinitely to take legal action. The actions arising from the bill of exchange are subject to certain conditions. very short limitation periodsset out in Article L. 511-78 of the French Commercial Code:

Three years for actions against acceptor shot (and its legal representative), from the due date.
One year for the bearer against the endorsers and the drawerfrom the date of the protest drawn up in good time (or from the due date in the case of a "free return" clause).
Six months for the actions of endorsers against each other and against the drawerIn the case of an endorsement, the debtor is liable for the full amount of the claim from the day on which the endorsee has paid or from the day on which the endorsee has been sued.

These time limits are much shorter than the ordinary statute of limitations (five years for commercial or personal property actions). It is therefore essential to act quickly.

It should be noted that this short statute of limitations only applies to actions cambiariesThese are actions based directly on the signing of the bill of exchange. Actions based on the fundamental relationship (the initial contract of sale, the loan, etc.) remain subject to their clean prescriptionwhich is generally longer. Thus, even if the action under the contract is time-barred, the creditor can sometimes still act on the basis of the original contract against his direct debtor.

The prescription period can be interrupted (by legal action, acknowledgement of debt, etc.), which starts a new period. However, the interruption only has effect ifwith regard to the person concerned It does not apply to the other joint and several debtors. Prescription can also be suspended in certain cases (insolvency proceedings, inability to act due to force majeure).

Lastly, as the statute of limitations is based on a presumption of payment, the debtor being sued may be forced to lend. oath that he no longer owes anything (or his heirs that they believe in good faith that he no longer owes anything). Similarly, a admission (even implicit) of non-payment is a bar to prescription.

What should I do if my bill of exchange is lost or stolen?

The loss, theft or destruction of the original bill of exchange poses a major problem, as the bearer can no longer present it to obtain payment.

The principle: prohibition of stop payments

First of all, a fundamental principle must be reiterated: apart from the very specific cases provided for by law, it is strictly forbidden to oppose payment of a bill of exchange (article L. 511-31). A creditor of the drawer or bearer may not block payment in the hands of the drawee by means of a seizure, for example.

Exception 1: Loss, theft or destruction of title

The law provides for a specific procedure to enable the dispossessed rightful owner to obtain payment:

The claim action : If the title reappears with a third party, the original owner may attempt to recover it (article L. 511-11). The original owner will succeed if the current holder acquired the draft in bad faith or through gross negligence. Otherwise, the rightful holder in good faith is protected. It is prudent for the dispossessed owner to notify a stop payment to the drawee to avoid a payment in full discharge.
Obtaining payment without the original title :
- If there areother copies of the draft (originally issued or obtained as duplicates) :
  - If the lost copy was not acceptedThe bearer may obtain payment on presentation of another copy (article L. 511-32).
  - If the lost copy was acceptedpayment on another copy is only possible after obtaining an judge's order (President of the Commercial Court) and provided a security deposit (article L. 511-33).
- If there is no no more copies The holder can either request a duplicate by tracing the chain of endorsers back to the drawer (article L. 511-36), or, if he cannot obtain a duplicate, ask the judge an order authorising payment, on condition that it proves its ownership (by its business records if it is a trader, or by any written document if it is not) and provides security deposit (article L. 511-34).
The act of protest : If the drawee refuses to pay despite the court order, the bearer cannot draw up a standard protest (because there is no original to transcribe). He must draw up a act of protest referring to the order in order to preserve its remedies (article L. 511-35).
Deposit : Its purpose is to guarantee reimbursement if a legitimate bearer of the original subsequently turns up. Its commitment is limited to three years from the date of its incorporation (article L. 511-37).

Exception 2: Collective proceedings against the holder

The other case in which opposition is permitted is the initiation of a bankruptcy, receivership or liquidation proceedings against the bearer of the bill of exchange (article L. 511-31). The objection is lodged by the court-appointed agent (mandataire judiciaire or liquidator). The purpose of the stop payment is to prevent the drawee from paying the bearer directly, since such payment would not be enforceable against the insolvency proceedings. The drawee will only have to pay the court-appointed agent.

An unpaid bill or a lost or stolen bill of exchange can lead to complex and urgent situations. Acting quickly and correctly is essential to protect your interests. Our firm is at your side to guide you through these delicate procedures and defend your appeals.

Sources

Commercial Code, in particular articles L. 511-11, L. 511-21, L. 511-31 to L. 511-38, L. 511-44 to L. 511-51, L. 511-62 to L. 511-64, L. 511-78.
Civil Code, in particular articles 1342-9, 2240 et seq.
Code of Civil Procedure and Enforcement (CPCE).