The bank del credere is an essential but often overlooked guarantee mechanism that secures commercial transactions by protecting a creditor against the insolvency of its debtor. At first glance, this undertaking, given by a bank, seems absolute. However, the occurrence of a force majeure event complicates the situation and raises a fundamental question: can the guarantor bank invoke exceptional circumstances to release itself from its payment obligation? The answer to this question is not unequivocal, requires detailed analysis and directly engages the bank's liability. This article provides a detailed analysis of this interaction, exploring the conditions under which the guarantee is triggered, the legal debates surrounding the application of force majeure to this very specific undertaking, and the other cases in which it can be exonerated.
Bank del credere: definition, role and guarantee issues
At the heart of many commercial and financial transactions, the del credere guarantee offered by a bank plays a vital role in providing security for creditors. To fully grasp the scope of the debates on force majeure, it is essential to understand the nature of this undertaking and its practical forms. To understand the fundamentals, it is essential to understand the concept of bank del crederethe nature of the guarantee of payment against insolvency, and its main manifestations.
Definition and legal nature of bank del credere
A bank del credere is a contract under which a credit institution undertakes to pay a creditor if the latter's debtor defaults. The main purpose of this guarantee is to cover the risk of insolvency. Contrary to popular belief, it is not simply an ancillary service. There has long been a debate in academic circles as to its exact nature. Some have likened it to a credit insurance contract, with the bank acting as insurer against the risk of non-payment. Others have tried to link it to a surety bond. However, most have rejected these qualifications. A del credere differs from a suretyship in that it is a principal undertaking; the bank undertakes directly and in its own name, in return for a commission. Clarifying the doctrinal controversies about its legal nature (insurance, suretyship, sui generis guarantee) helps to establish the expertise, in particular by the distinction with surety bonds. The modern trend sees it as an autonomous indemnity guarantee, an onerous creation of commercial practice, which differs significantly from other areas such as employment law, and which is adapted to the needs of the business world for fluidity and security.
Practical manifestations of the banker's del credere
The bank's del credere commitment can take several forms, often integrated into broader transactions. Among the most common are :
- Fixed-rate (or non-recourse) discount : When a bank discounts a commercial paper or a trade debt (via a Dailly assignment), it can waive its right of recourse against its customer (the assignor) in the event of non-payment by the principal debtor. In so doing, it assumes the risk of default and its commitment takes on the nature of a del credere.
- Irrevocable documentary credit : Widely used in international trade, this mechanism sees a bank make a firm commitment to pay an exporter against the submission of documents proving that the goods have been properly dispatched. This commitment is independent of the sales contract and constitutes a sophisticated form of del credere, guaranteeing the seller against the insolvency of the foreign buyer.
- Guaranteed payment by bank card: When a merchant accepts a card payment, the cardholder's bank guarantees payment of the transaction, provided that the merchant complies with security procedures. This performance guarantee, which protects the seller even if the customer's account is not funded, is another everyday illustration of the bank del credere.
Enforcement of the del credere guarantee: the debtor's insolvency and its interpretations
The triggering of the del credere banker's obligation is conditional on the default of the principal debtor. Examination of the concept of insolvency which triggers the guarantee is therefore a central point, the interpretation of which can vary significantly depending on the terms of the contract and court rulings.
The scope of the guarantee: from the risk of insolvency to payment default
Historically, del credere was seen as a guarantee covering only the proven insolvency of the debtor. This restrictive view meant that the beneficiary often had to take lengthy steps before being able to call on the guarantor for payment. Practice and the position of the courts have gradually changed this view. Today, unless there is a clause to the contrary, the del credere obligation is much broader. The Court of Cassation (Cass. civ.) has stated on several occasions that the del credere guarantee covers simple "failure to pay on the due date", and not just insolvency. In other words, the beneficiary of the guarantee does not have to prove that the debtor is insolvent or in receivership. The mere fact that the debt has not been paid on the agreed date is sufficient to trigger the guarantee. This interpretation, in its most direct sense, considerably strengthens the security offered to the beneficiary.
The impact of contractual arrangements on the concept of insolvency
Contractual freedom allows the parties to define precisely the triggering event. While the general rule is that the guarantee is triggered by the first default in payment, a del credere agreement may provide for stricter conditions. It is common, particularly in non-recourse discounting transactions, for the contract to make the triggering of the guarantee subject to objective criteria. For example, the parties may agree that the guarantee will not be due until a notice of default has been issued in the event of an attempted seizure, or from the date of the opening of insolvency proceedings against the debtor. These clauses allow the bank to modulate its risk and pricing, but they also reduce the beneficiary's immediate protection. The wording of these stipulations is therefore a major issue when negotiating the contract, to prevent any future disputes.
Force majeure and bank del credere: a complex interaction for banking liability
The question of whether a del credere banker can invoke force majeure to escape his payment obligation is at the heart of the legal debate. It pits the purpose of guaranteeing absolute security against a fundamental principle of contract law that exonerates a debtor when performance of his obligation is prevented by an irresistible and unforeseeable event.
The general principle of force majeure and its conditions
In French law, force majeure is defined by article 1218 of the Civil Code, which was introduced following the 2016 reform of the law of obligations. For an event to qualify as force majeure, it must meet three cumulative conditions. First, it must be an external event beyond the debtor's control. Secondly, its unforeseeable nature must be established: the event could not reasonably have been foreseen when the contract was entered into. Finally, it must be irresistible, meaning that its effects are inevitable and that the debtor has been prevented from performing his obligation. This impossibility of performance is a key characteristic. When these conditions are met, the debtor is released from his obligation, either temporarily or definitively, without his contractual liability being engaged, which may lead to the automatic termination of the contract.
The application of force majeure to del credere obligations: doctrinal divergences and case-law solutions
The application of this rule to del credere commitments is far from unanimous. Some writers maintain that the very nature of del credere, which is to guarantee payment whatever the difficulties, precludes exemption on grounds of force majeure. The purpose of this security is precisely to transfer the risk of default, even when that default is the result of exceptional events, to a solvent professional, the bank. This position is reinforced by a long-standing decision of the Paris Court of Appeal, principally relating to the commissionaire's del credere, which tends to affirm that the guarantor is responsible for the solvency of the buyer "whatever the events that make it impossible for him to pay". Conversely, other authors consider that there is no reason to derogate from ordinary contract law. The del credere banker, like any other debtor, should be able to be exonerated if an event of force majeure prevents him from making his payment. Rulings on this precise point remain rare, leaving considerable room for interpretation and, in the light of recent events (Covid-19 pandemic), contractual foresight.
Financial force majeure and its limits in the del credere context
It is a well-established principle of French law that the debtor of an obligation to pay a sum of money can never invoke a financial impediment as a case of force majeure in order to be discharged. The adage "genera non pereunt" (genera never perish) implies that it is always possible to obtain money to pay. This rule came to the fore during the health crisis linked to the Covid-19 pandemic, notably in the dispute between a commercial tenant and his landlord over the payment of his rent. Applied to del credere banks, this principle would seem to close the door on any exemption. However, the very purpose of del credere is to guarantee the risk of insolvency, which is the very embodiment of the impossibility of paying a sum of money. If force majeure rendered the principal debtor insolvent (for example, the destruction of his only factory by a natural disaster), the guarantee would come into play. So the debate shifts: could force majeure affect not the principal debtor, but the banker himself, for example in the event of a systemic crisis, an unavoidable event that totally paralyses payment systems and even affects the public money service? This is an extreme hypothesis, but one which shows that the specific nature of del credere makes it necessary to qualify the application of general principles.
Contractual clauses: anticipating force majeure in del credere agreements
In the face of these legal uncertainties, contractual practice is decisive. Most modern bank guarantee agreements contain a detailed force majeure clause. These stipulations aim to define what the parties mean by "force majeure", sometimes listing specific events (war, natural disasters, acts of terrorism, pandemic, death of a key person who cannot be replaced, supply disruption through no fault of their own, etc.). Above all, they specify the consequences of the occurrence of such an event. The parties may agree that force majeure will totally exonerate the banker from liability, or that it will merely suspend the banker's obligation to pay for the duration of the event, but these clauses are limited by public policy. Certain international rules and practices, such as the RUGD for first demand guarantees, provide for mechanisms to automatically extend the term of the guarantee if an event of force majeure occurs close to its expiry date. The negotiation and drafting of these clauses are therefore fundamental to securing the rights and obligations of each party.
Exoneration of the del credere bank's liability: fault, fraud and set-off
Beyond the debate on force majeure, there are clearly established situations in which the bank may be released from its payment obligation. These exemptions are mainly linked to the behaviour of the beneficiary of the guarantee.
The fault of the beneficiary creditor: a cause of extinction of the guarantee
The del credere guarantee is not all-risk insurance for the beneficiary. If the beneficiary commits a fault, he may lose the benefit of the protection. This fault can be assessed at two levels. Firstly, it may concern the relationship with the principal debtor. For example, if the seller has failed to deliver the goods or has provided a service that does not conform, the buyer's non-payment is justified. In this case, the claim is non-existent or contestable, and the del credere guarantee, which is based on a valid debt, falls away. The discounting banker who advanced the funds can then take action against his selling customer. On the other hand, the fault may lie in non-compliance with the obligations set out in the guarantee agreement itself, such as late transmission of documents or failure to comply with control procedures, thereby depriving the beneficiary of his right to payment.
Creditor fraud: an obstacle to the enforcement of del credere
The adage "fraud corrupts everything" (fraus omnia corrumpit) is directly applicable here. If the beneficiary has used fraudulent manoeuvres to obtain payment, the guarantee is obviously void. It is essential to explain how fraudulent manoeuvres (false invoices, irregular documents) can release the bank from its commitment. In the case of a discount, this may involve the presentation of "paper of convenience" that does not correspond to any actual commercial transaction. In the case of documentary credit, the presentation of falsified or misleading documents constitutes fraud that paralyses the bank's commitment. Similarly, a merchant who artificially splits up a sale to remain under the card guarantee limits would be committing fraud. In all these cases, not only is the bank released, but it can also take legal action against the fraudster and claim compensation for the loss suffered.
Set-off: a means of freeing the del credere bank
Set-off is a mechanism for extinguishing obligations when two people owe each other money. If the principal debtor was also a creditor of the beneficiary of the guarantee for another reason, and their reciprocal debts are extinguished by set-off, the principal debt disappears. Consequently, the obligation of the del credere bank, which no longer has a purpose, is also extinguished. It is necessary to analyse the compensation mechanism and its discharge effect for the del credere banker. However, there is an important exception to this logic in the case of so-called "autonomous" guarantees (such as documentary credit or first demand guarantees), where the unenforceability of defences in principle prevents the guarantor from invoking such a set-off to refuse payment.
Recourse by the del credere bank and post-payment management
The intervention of the del credere bank does not always end with payment or refusal of payment. Management actions and strategies are needed to resolve the situation definitively and comply with regulatory obligations.
Action for repayment and recovery of funds
When the bank pays the beneficiary even though the conditions of the guarantee have not been met (for example, in the case of fault or fraud on the part of the beneficiary that is discovered later), it does not act on a non-refundable basis. It has a claim for reimbursement, known as an action for the recovery of undue payments. The guarantee system must not result in unjust enrichment of the beneficiary. If the bank has honoured its del credere commitment in a discount transaction, but the non-payment was due to a fault on the part of the seller, it regains its right of recourse against the seller. The aim is to restore the balance and ensure that the final burden of the loss falls on the party responsible for it.
Recommendations and guidelines for banking institutions
The management of bank guarantees, and in particular cases of force majeure, is subject to prudential supervision. Credit institutions must put in place robust internal procedures to assess risks, document commitments and manage incidents. It is crucial to summarise good practice and any recommendations made by the regulatory authorities (such as the ACPR in France) for the management of del credere guarantees, particularly in the event of exceptional events. Precise contractual documentation, rigorous analysis of the events invoked and transparent communication with stakeholders are essential to limit the risk of litigation and, if necessary, to convince the judge of the validity of the bank's decision, while ensuring regulatory compliance.
The management of del credere guarantees in the event of force majeure requires detailed analysis and a thorough understanding of banking law. Given the complexity of these mechanisms, the support of a lawyer is essential to safeguard the rights of beneficiaries and banks. Our firm puts its expertise in banking law to help you deal with these issues.
Sources
- Civil Code (in particular article 1218 on force majeure)
- Monetary and Financial Code (in particular Articles L. 313-1 and L. 313-23 et seq. on credit transactions and assignment of receivables)
- Doctrine and court decisions (Cass. civ.) in banking and commercial law
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