The business world is based on trust, but it also relies on precise legal mechanisms to govern transactions and deal with payment incidents. Among these tools, one word in particular resonates with a certain gravity: the "protest". This act retains strategic importance in the management of trade bills. Poorly managed or ignored when necessary, its absence can deprive a creditor company of its rights and cause lasting damage to a debtor's reputation. Far from being a mere formality, the protest is a powerful tool, often the key to preserving recourse in the event of non-payment.
The aim of this article is to demystify this essential act. We will look at its definition, its practical use, the different situations in which it comes into play, the procedure to follow to have it drawn up and, finally, the consequences of making it public. This is a comprehensive guide to understanding a mechanism that, although technical, is central to the security of commercial transactions.
What is a protest and what is its strategic role?
Legally, a protest is an authentic instrument. This means that it is drawn up by a public official who has been delegated by the State to give special probative value to his findings. In practice, it is most often a commissioner of justice (a profession that took over from bailiffs and auctioneers on 1 July 2022), or more rarely from a notary. Its role is to officially record an incident that has occurred during the life of a commercial instrument, such as a bill of exchange or promissory note. This incident may be either a refusal to pay on the due date or, specifically in the case of a bill of exchange, a refusal of acceptance by the person designated to pay (the drawee). Articles L. 511-39 et seq. of the French Commercial Code govern this procedure.
The primary purpose of a protest, and undoubtedly the most fundamental one for a creditor company, is to preservation of the so-called "chamber" remedies. What does this mean? When a bill of exchange is circulated (for example, by successive endorsements), each signatory (the initial drawer, the endorsers, etc.) becomes, in principle, the guarantor of the final payment. If the principal debtor fails to pay, the bearer of the bill of exchange can turn to these guarantors to obtain what is due. However, the law very often makes the possibility of exercising these recourses conditional on the drawing up of a protest within strict deadlines. To omit this formality is to run the major risk of permanently losing the possibility of claiming the amount due from the previous signatories. Article L. 511-54 of the French Commercial Code is very clear: "no act on the part of the bearer of the bill of exchange can replace the act of protest".with some exceptions.
Over and above this function of preserving rights, the payment default protest acts as a warning signal. For the courts, the proliferation of protests against a company is a serious indication that it is in a state of suspension of payments, a situation that may lead to the opening of collective proceedings. Its inclusion in public registers can therefore tarnish a debtor's financial reputation and encourage its partners to exercise caution.
The different types of protest: default of payment and default of acceptance
The protest is not a single act; it takes different forms depending on the incident it is intended to record. There are two main types of protest: the payment protest and the acceptance protest, each responding to a specific situation.
Protest in the event of non-payment: establishing that payment has not been made on the due date
This is the most common form. It occurs when, on the due date (or when presented for "sight" settlement), a bill of exchangeA promissory note or even a cheque is not honoured by the person who was supposed to pay the sum. The public official then officially declares the default. Time is of the essence here. To be valid, a protest for non-payment must be drawn up within specific legal time limits, generally within the working days following the due date. As far as cheques are concerned, a word of clarification is in order. There is a simplified procedure for obtaining a writ of execution against the issuer: the certificate of non-paymentissued by the bank (see article L131-73 of the French Monetary and Financial Code). While it is very effective against the drawer, it does not replace the protest if the bearer wishes to retain his or her recourse against any endorsers, a point often overlooked.
Protests in the absence of acceptance: anticipating the risk of non-payment
This form of protest is specific to bills of exchange. Under this mechanism, one person (the drawer) instructs another (the drawee) to pay a sum of money to a beneficiary at a future date. The drawee is not bound by the bill of exchange until it "agrees" to pay by signing the bill. Before the due date, the bearer may present it to the drawee to accept the draft. If the drawee refuses, the risk of non-payment on the due date becomes high. The law (article L. 511-38 of the French Commercial Code) then authorises the bearer of the bill to take immediate action against the other signatories (drawer, endorsers) without waiting for the bill to fall due. In order to exercise these early recourses, he must have the refusal recorded by a protest in default of acceptance, which becomes the proof opening the way to guarantee actions.
The court commissioner: the key player in drawing up protests
The strength of a protest lies in its authenticity, a quality conferred by the intervention of a public and ministerial officer: the judicial commissioner. Understanding the role and status of this professional is essential to understanding the scope of the deed.
Status, powers and monopoly of public and ministerial officers
The profession of commissaire de justice is the result of the merger, effective from 1 July 2022, of the professions of bailiff and auctioneer, under the Growth Act of 6 August 2015. As public and ministerial officers, they are delegates of a parcel of public power. This status gives him a monopoly on serving procedural documents and enforcing court rulings and enforceable titles. Drawing up a protest, or the act of protesting, is a direct part of his monopoly powers, guaranteeing the probative value of his findings.
Training, ethics and professional rules (updated 2024)
Access to the profession is subject to strict requirements: holding a master's degree in law, passing an entrance examination to the Institut National de Formation des Commissaires de Justice (INCJ), completing a two-year training course and passing the exit examination. The practice of the profession is governed by precise ethical rules, set out in a Code of Ethics that came into force on 1 March 2024 and whose application is monitored by the professional bodies. This code imposes duties of independence, probity and confraternity, ensuring the integrity of the documents drawn up, including protests, which are a source of legal certainty.
Impact of the reforms on protest costs and timeframes (2024-2026)
The profession is in the throes of change, with a series of reforms that could have practical implications. For example, a new chart of accounts, the texts of which were published in December 2023, will be applicable by 1 January 2026 at the latest. Even more significantly, the Justice 2023-2027 Bill provides for the seizure of wages procedure, previously managed by the courts, to be entrusted to the judicial commissioners. This diversion, aimed at simplifying and speeding up procedures, could change the way law firms are organised and, indirectly, influence the timescales or costs associated with acts such as protests. Similarly, the annulment by the Conseil d'État, following a long-awaited opinion at the end of 2023, of the decree setting travel expenses calls for an overhaul of this part of the fee structure.
The protest procedure: deadlines, formalities and compulsory information
The procedure for drawing up a protest is formalistic. The bearer of the unpaid bill mandates a court commissioner. The latter goes to the debtor's home or the designated place of payment to present the bill and issue a summons to pay (or accept). If the debtor refuses or fails to respond, he will draw up a protest. This document must contain the mandatory information listed in article (often abbreviated to 'art.') L. 511-53 of the French Commercial Code, on pain of nullity: the transcription of the bill of exchange, the identity of the parties, the summons to the debtor, the reasons for refusal, the date and the signature of the public official. The purpose of this document is to make a declaration, and compliance with the legal time limits is, once again, an absolute condition of its validity for action on the merits of the case.
Cambiary law and protests: the principle of the unenforceability of defences
The protest is one of the cogs in a broader legal mechanism: the law of exchange. One of the cardinal principles of this law, which goes a long way towards justifying the importance of formalism, is that exceptions cannot be set aside.
Mechanism and conditions for the unenforceability of defences
This principle protects the bearer of a commercial paper in good faith. It means that the debtor (the drawee acceptor) cannot refuse to pay the amount to the bearer on the grounds of his personal relationship with the original creditor (the drawer). The law of exchange makes a clear distinction between the "fundamental relationship" (the initial contract of sale or service) and the "exchange relationship" (the obligation arising from the signing of the bill of exchange). Once the instrument circulates on paper or in digital form, the exchange relationship becomes autonomous. This theory, which lies at the heart of commercial law and is constantly reaffirmed by judicial case law (notably the Cour de cassation), is a benchmark for the security of transactions. For example, if a buyer accepts a bill of exchange to pay for goods and this bill is endorsed to a finance company, the buyer cannot refuse to pay the company on the grounds that the goods were defective. He will have to honour his commitment under the bill of exchange and then take action against the seller.
Limits: exceptions applicable to the bearer (forged signature, alteration, incapacity)
The principle of non-enforceability is not absolute. Certain exceptions, considered to be particularly serious, are still enforceable against any holder, even in good faith. These exceptions are :
- Apparent defects in the title (e.g. a mandatory statement missing).
- The incapacity of the signatory (a minor or protected adult).
- Forged signature: a person whose signature has been forged is never liable.
- Alteration of title: if the text of the instrument has been altered, art. L. 511-77 of this section of the Commercial Code specifies that signatories prior to the amendment are bound by the terms of the original text, while subsequent signatories are bound by the terms of the amended text. An important note concerns acceptance by separate deed, a mechanism that is more difficult to secure and which may complicate the application of these rules.
The protest is the act that crystallises the situation at a given moment and enables the bearer in good faith to assert the full extent of his Cambodian rights, purged of the exceptions linked to the fundamental relationship.
Consequences of a protest: from chamber remedies to legal publicity
Once a protest has been drawn up, it has important effects. For the creditor, it preserves recourse against all guarantors. For the debtor, the most important consequence is legal publicity. The court commissioners send a copy of protests in default of payment to the registry of the relevant commercial court. The clerk's office keeps a register of protests that can be consulted by third parties (banks, credit insurers). Appearing on these lists can damage a company's credit. Fortunately, debtors who have paid their debts can ask for the entry to be deleted by providing proof of payment. In addition to the mechanisms linked to the protest, a global debt collection strategy is often necessary for companies.
Beyond the protest: recourse and complex mechanisms (downstreaming, payment by intervention, replacement)
The law of bills of exchange offers other guarantees and solutions to incidents. The aval, for example, is a guarantee specific to bills of exchange, whereby a third party (the avaliste) guarantees payment on behalf of one of the signatories to the bill. Rarer but planned mechanisms also exist, such as payment under protest (or payment by intervention), where a third party pays on behalf of a defaulting signatory in order to avoid prosecution, or replacement, which consists of drawing a new bill (the "retirement") on one of the guarantors to repay the principal of the unpaid bill and costs.
How can I avoid a protest? Legal clauses and exemptions
It is possible to avoid the formalities of a protest. As provided for in the French Commercial Code, the most common method is to insert a "return free of charge" or "no protest" clause on the bill of exchange. If this clause is inserted by the original drawer, it exempts the bearer from having a protest drawn up in order to preserve his rights of recourse against all the signatories. However, this clause does not exempt the bearer from presenting the bill for payment on time. The law also provides for exemptions, in particular where a protest has already been drawn up for lack of acceptance, in the event of the debtor's insolvency, or in the event of force majeure.
The management of bills of exchange and unpaid debts is a mixture of strict rules and subtle exceptions. If you are faced with a refusal of payment or acceptance, or if you want to secure your commercial transactions by better understanding the implications of the various instruments and guarantees (this legal lexicon is vast), our firm can advise you on the best strategy to adopt. Our website contains lots of useful information, but personalised advice is often required. Contact us for a personalised analysis.
Sources
- Commercial Code (in particular art. L. 511-39 et seq., L. 512-3 et seq.)
- Monetary and Financial Code (in particular art. L. 131-47 et seq., L. 131-73)
- Civil Code (articles on the law of obligations and securities)
- Case law of the Court of Cassation, Commercial and Financial Division.
EN 
FR