Lending money to a relative or granting an extension to a customer's payment is a matter of trust. When memory fails and the relationship becomes strained, the question ceases to be a moral one and becomes a legal one: who owes what, how much, and since when? The IOU is the legal response to this fragility. A unilateral act by which a debtor acknowledges in writing that he owes a sum to an identified creditor, it does not create the obligation but proves it - a central distinction that we take seriously throughout this guide, because it governs most of the disputes we encounter at our firm. Before drafting or contesting such a deed, it is important to understand what it really is, what article 1376 of the Civil Code requires of it, and how the Court of Cassation has defined it since the Act of 13 March 2000.
A unilateral act with a probationary function
The IOU is a unilateral legal act Only the debtor's signature is required. The creditor makes no commitment in return. This asymmetry distinguishes it radically from a loan contract, which is synallagmatic and obliges the lender to remit the funds at the same time as it obliges the borrower to return them. In an acknowledgement, the undertaking to return the funds has already been fulfilled - or is presumed to have been fulfilled - at the time the document is signed; what remains to be done is repayment, and the only function of the document is to establish proof of this.
This evidentiary nature has a decisive consequence: the absence of an acknowledgement of debt does not prevent the creditor from taking action, but it does complicate proof. Article 1353 of the Civil Code states that «he who claims performance of an obligation must prove it». When the sum exceeds a certain threshold, article 1359 requires that this proof take the form of a writing. The acknowledgement is precisely such a writing. Failing this, the creditor remains free to prove his claim by other means - bank transfer, messages, witness statements - but with a heavier burden of proof, often insurmountable in practice when the parties are close and the payments were made in cash.
Recognition is also different from simple out-of-court confession. An email in which the debtor writes «I still owe you €3,000» may constitute an admission and form the basis of an action, but it does not have the probative value of an acknowledgement in accordance with article 1376. This is an important distinction to be aware of: many creditors believe they have an acknowledgement when all they have is a confession, and discover too late that their case is fragile. Conversely, a debtor who has written imprudently may have his own admission set up against him without ever having signed the solemn deed that he thought was the only binding document.
When to write it: the €1,500 threshold
Article 1359 of the French Civil Code, in conjunction with Decree no. 80-533 of 15 July 1980, sets a maximum amount of 1 500 € the threshold above which a legal act must be proven in writing. Below this threshold, proof is free: witnesses, presumptions, prima facie evidence supplemented by an admission - all means of proof are admitted. Above that point, writing becomes the rule, and an acknowledgement of debt becomes almost indispensable - not for the validity of the claim, which exists without it, but for its demonstration in court.
It is important to avoid a common misunderstanding: this threshold is not a ceiling. An IOU can be for a sum of one million euros; there is nothing to prevent this, nor is there any requirement to use a notary for this amount. It is a threshold floor beyond which writing becomes required as a means of proof. For a family loan of €500, an acknowledgement is unnecessary under Article 1359; for a loan of €20,000 to a friend, it becomes essential if the creditor wants to retain a serious chance of recovery.
This threshold also governs the need for a tax report. For loans over €5,000, article 242 ter of the General Tax Code, specified by decree, requires the lender to declare the transaction to the tax authorities using the Cerfa 2062 form. The obligation falls on the creditor, not the debtor, and forgetting to do so does not invalidate the acknowledgement; it simply exposes the borrower to a tax fine and, above all, weakens the credibility of the transaction if an audit is subsequently carried out on the movement of funds.
Conditions of validity: what article 1376 really says
Since Order no. 2016-131 of 10 February 2016, which overhauled the law of obligations, acknowledgement of debt has been governed by article 1376 of the Civil Code - formerly article 1326, the substance of which it reproduces without substantive change. This article is the core text of the whole subject, and deserves to be quoted in full.
«A private deed in which one party undertakes to pay another a sum of money or to deliver a fungible good is not evidence unless it includes the signature of the party making the undertaking and a statement, in his own handwriting, of the sum or quantity in words and figures.
In the event of a discrepancy, the private deed is proof of the amount written out in full.»
There are three requirements: the debtor must sign, the sum must be stated in words, and the sum must be stated in figures - the last two must be written by the debtor himself. The case law of the Cour de cassation has patiently built up the rules governing their failure, and it is here that most disputes arise.
The handwritten reference and its flexibility in case law
The text refers to «a statement written by the borrower» and, historically, the Cour de cassation deduced from this a strict handwritten requirement: the borrower had to draw by hand the two figures and the letters corresponding to the sum owed. This rigour has been tempered by three successive movements. Firstly, the law of 13 march 2000, The French Supreme Court (Cour de cassation), in a decision adapting the law of evidence to information technology, enshrined the electronic signature and opened the door to dematerialised recognition. The Court of Cassation drew the consequences of this in a landmark judgment of 28 October 2015 (Cass. civ. 1re, n° 14-23.110) Depending on the medium, it may be the result of an identification process that complies with the rules governing electronic signatures, or of any other process that ensures that the signatory is indeed the person who wrote the acknowledgement. A typed and electronically signed acknowledgement is therefore valid today, provided that the process reliably identifies the debtor.
Secondly, the Court has softened the consequences of incomplete information. L’judgment of 18 September 2002 (Cass. civ. 1re, n° 99-13.192) states that the omission of a reference to figures does not deprive a written document of its evidential value if it contains a reference to the sum in words. The rule has remained constant ever since: the sum in words is sufficient. Conversely, the mere mention of figures, without the letters, reduces the document's probative value. prima facie evidence in writing, This is detailed below.
Finally, the Court has long drawn a distinction between the probative value of the writing and the validity of the obligation. Where the materiality of the loan is not in dispute - because the debtor acknowledges having received the funds or the bank transfer is documented - failure to comply with the formalities of article 1376 is considered a breach of the obligation. without influence the validity of the obligation itself. L’judgment of 5 October 1994 (Cass. civ. 1re, n° 92-17.208) establishes this rule: the obligation to repay exists irrespective of the form of the writing in which it is recorded. So it is never the debt itself that wavers, but the proof that can be adduced in court.
Substantiating evidence in writing: the way out
An acknowledgement which does not comply with all the requirements of article 1376 does not disappear: it is downgraded to the rank of prima facie evidence in writing within the meaning of article 1362 of the Civil Code. This intermediate system requires the creditor to supplement his written document with extrinsic evidence - testimony, presumptions, correspondence - in order to convince the judge. The path is narrow but open, and the Cour de cassation has pointed out in its stop the 1er February 2005 (Cass. civ. 1re, n° 02-13.329) extrinsic elements may appear on the instrument itself - for example, the signatures of two witnesses preceded by their handwritten names - provided that they are distinguishable from the acknowledgement itself and corroborate it.
In practice, therefore, a creditor whose acknowledgement contains a formal defect is not helpless, but must rebuild his case. It is this work that most often justifies the intervention of a lawyer when the litigation begins, because the extrinsic elements to be produced (transfers, text messages, witnesses, correspondence) cannot be improvised before the judge.
Other conditions: capacity and consent
Like any legal act, recognition requires the capacity of the debtor and unimpaired consent. Error, fraud and violence can render the deed null and void. Persons placed under guardianship or curatorship are subject to the rules of the Civil Code on the protection of adults, and a deed signed by them without authorisation may be annulled. More subtly, the lack of consent may result from moral or economic pressure - a creditor who demands a signature in return for waiving unfounded criminal proceedings, for example, exposes his acknowledgement to annulment on the grounds of violence within the meaning of article 1140 of the Civil Code.
In addition to the wording, the Cour de cassation has recognised the professional liability of the drafting lawyer who fails to check that the deed contains all the essential handwritten information (Cass. civ. 1re, 24 June 1997, no. 95-11.380). The rule is a warning for the practitioner and, conversely, a security for the client: entrusting the drafting to a professional is not an unnecessary formality.
Private agreement or notarial deed: making the right choice
IOUs can take two forms, each with its own logic and costs. The deed under private seal is drawn up by the parties themselves, without the intervention of a third party. It is free, quick and meets the requirements of article 1376, provided that the compulsory information is included. Its weakness lies in the fact that it does not have a date certain that can be used against third parties - to give it this date, it must be registered with the Service des impôts des entreprises (SIE), for a fixed fee, or filed with a notary. In all cases, the private deed is not an enforceable title: to enforce it in the event of non-payment, the creditor will have to obtain a judgment.
The act notarized, A notarised or authenticated deed is drawn up by a notary. It has a date certain, probative value until a forgery is recorded - an exceptional procedure reserved for cases of suspected falsification - and, above all, it constitutes a legal document. enforcement order within the meaning of article L. 111-3 of the Code of Civil Enforcement Procedures. This last property is decisive: if the debtor does not repay on the due date, the creditor can directly entrust the deed to a judicial commissioner to initiate a seizure, without going through a judge. This saving in time and money can justify the cost of a notary for large sums.
| Criteria | Under private seal | Notarial deed |
|---|---|---|
| Cost | Free (excluding registration) | Proportional fee (art. A. 444-143 C. com.) |
| Date certain | If not registered, not enforceable against third parties | Yes, by right |
| Evidential value | Literal proof if art. 1376 complied with | Up to forgery |
| Enforceable title | No - judgment required to execute | Yes - direct enforcement |
| Turnaround time in the event of non-payment | Several months (legal proceedings) | A few weeks (direct entry) |
For claims over €15,000, and even more so when the debtor is at risk of default, a notarial deed is almost always the most efficient option: its cost is amortised as soon as it avoids an injunction to pay procedure and the fees that go with it.
Pitfalls to avoid when drafting
There are a number of classic errors that recur in the cases we deal with at the firm, and they deserve to be known before any signature.
Writing a date on the deed that is earlier than the actual date of signature is a breach of contract. forgery of a private document under article 441-1 of the French Criminal Code, punishable by three years' imprisonment and a €45,000 fine. The temptation is strong when you want to make the limitation period run longer or avoid a cause of nullity that has arisen in the meantime - it exposes you to criminal proceedings and the nullity of the deed. To give certainty of date to an acknowledgement that has already been signed, the legitimate route is to register it with the SIE or file it with a notary.
Other recurring pitfalls include the’date forgotten, which complicates the calculation of the statute of limitations; the difference between letters and numbers, which article 1376 paragraph 2 resolves in favour of the sum in full - a rule which creditors sometimes ignore, to their detriment; the interest rate stipulated verbally, Article 1907 of the Civil Code requires that contractual interest be fixed in writing, failing which it will be reduced to the legal rate of interest, and the maximum usury rate for civil credit must be respected.’no due date, which makes the debt payable at any time and may, depending on the circumstances, start the limitation period as soon as it is signed.
When the recognition is intended to formalise a loan between close relations, these technical points are coupled with a wealth and tax dimension: the framework of the loans between individuals sets out the reporting obligations and the relationship with inheritance law, particularly in the event of the lender's death before full repayment.
The statute of limitations: five years, not ten
This is one of the areas where we see the most misconceptions, both in mainstream literature and among litigants. Since the law no. 2008-561 of 17 June 2008 reforming the statute of limitations in civil matters, the ordinary law period is five years. Article 2224 of the Civil Code formulates it as follows: «personal or movable actions are prescribed by five years from the day on which the holder of a right knew or should have known the facts enabling him to exercise it». An action for payment based on an acknowledgement of debt is a personal action; it therefore falls within this period, whether it is a private document or a notarial deed. The thirty-year time-limit in the former article 2262 of the Civil Code has disappeared, and the ten-year time-limit specific to authentic instruments has never existed outside the field of private movables - although the opposite belief is still widely held.
The starting point is the’payability of the debt. If the acknowledgement sets a repayment date, the period runs from that date. If it does not, the creditor may put the debtor on notice at any time, and the period runs from the date of that notice. The absence of a due date is therefore a double-edged sword: it allows the creditor to choose when to pay, but it also exposes the debtor to a dispute over the starting point if the formal notice is delayed.
The five-year period can be interrupted by a number of events, foremost of which is the debtor's own acknowledgement. Article 2240 of the Civil Code states that «acknowledgement by the debtor of the right of the person against whom he was prescribing interrupts the prescription period». Any partial payment, any written confirmation of the debt or any request for a delay addressed to the creditor may constitute an acknowledgement that interrupts the limitation period, provided that it is unequivocal. The Court of Cassation is very careful to ensure that this is the case: the mere fact that a registered letter is not contested does not constitute recognition (Cass. civ. 3e, 7 January 2021, no. 19-23.262), and settlement discussions do not in themselves constitute an acknowledgement of interruption (Cass. civ. 1re, February 5, 2014, no. 13-10.791).
Two clarifications of practical importance: on the one hand, recognition only benefits the creditor concerned - the interruptive effect is relative and does not benefit other creditors of the same debtor (Cass. civ. 2e, 5 March 2020, no. 19-15.406); on the other hand, an agreed plan for dealing with over-indebtedness filed with the Banque de France commission is deemed to be an interruptive recognition, thus linking the matter to that of the over-indebtedness (Cass. civ. 2e, 9 January 2014, no. 12-28.272).
«Personal or movable actions shall be barred after five years from the date on which the holder of a right knew or should have known of the facts enabling him to exercise it.»
Recovering an unpaid IOU
When the debtor fails to repay on the due date, the road to recovery follows a progression that it is useful to be aware of. Each stage has its own cost, timeframe and conditions, and the strategy is to find the right entry point depending on the sum involved, the debtor's presumed solvency and the evidence available.
Simple restart, then formal notice by registered letter with acknowledgement of receipt. The notice of default is also the starting point for interest on arrears at the statutory rate (art. 1231-6 C. civ.).
Non-adversarial procedure governed by articles 1405 et seq. of the Code of Civil Procedure. Fast, inexpensive and suitable for claims that cannot be seriously contested. The judge issues an injunction, which the debtor may contest within one month of being served.
If there is no opposition, the order becomes enforceable. If the debt is contested, the creditor must go to court to obtain a judgment. Notarised acknowledgments skip this stage: they are directly enforceable.
The court commissioner implements the appropriate enforcement measures: attachment of bank accounts, attachment of earnings, In the case of large debts, the debtor may be liable to seizure, sale or seizure of movable property, or even seizure of immovable property.
In the specific case where the debtor is subject to insolvency proceedings, the creditor must declare his claim within the legal time limits; otherwise, the claim will be unenforceable against the proceedings. This is a matter for the claims declarations.
Challenging an IOU: the debtor's options
A debtor sued on the basis of an IOU is not helpless. There are several defences, which fall into two categories: those that attack the validity of the instrument itself, and those that attack the creditor's action.
On the validity The most common reason for nullity is a lack of consent. Error as to the substance of the debt, fraud - for example, fraudulent manoeuvres by the creditor to conceal part of the payments already made - or moral violence may justify nullity. Lack of capacity (minor, protected adult without authorisation) is automatically null and void. Failure to include a handwritten note in accordance with article 1376 does not render the deed null and void, but reduces it to the status of a preliminary written proof, and obliges the creditor to complete his file. Finally, an acknowledgement whose cause is unlawful - an unauthorised gambling debt, a sum owed for an illegal service - may be annulled on the basis of article 1162 of the Civil Code.
On the’action Acquired prescription is the most effective remedy when it is available, and must be raised at the outset of the proceedings. The debtor may also argue that the debt has been extinguished by payment - the burden of proving the payment then lies with him, in accordance with the second paragraph of article 1353. Cash payments between private individuals are notoriously difficult to prove, which makes it essential to use bank transfers systematically or to require a receipt. Finally, he may invoke the compensation if a reciprocal debt exists, or the debt forgiveness if the creditor had agreed to surrender his claim - the surrender does not have to be in writing, but it makes it much easier to prove.
Handling an IOU case, on either side, requires a careful reading of the deed, its date, its cause, the context in which it was signed and the history of payments. Disputes are rarely lost on spectacular grounds; they are lost on the basis of a neglected formality, a miscalculated statute of limitations, or evidence that was not reconstituted in time. L’support from a credit lawyer enables you to identify the levers available before deadlines close, whether the aim is to secure a commitment, obtain payment of an amount due or resist an unfounded demand.
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