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The reform of surety bonds: a new balance between protection and efficiency

By Yasmine EDDAM5 April 2025

Guarantees are the most widely used personal surety in banking and commercial practice. Its effectiveness is based on its apparent simplicity: one person undertakes to pay the debt of another in the event of default. Order no. 2021-1192 of 15 September 2021 completely rewrites the law on sureties. This reform puts an end to the scattering of texts between the Civil Code, the Consumer Code and the Monetary and Financial Code. It also strengthens the protection of sureties while preserving the effectiveness of this guarantee, establishing a new balance between protection and efficiency.

A clearer definition and a unified system

The new definition of suretyship now appears in article 2288 of the Civil Code: "A suretyship is a contract by which a guarantor undertakes towards a creditor to pay the debtor's debt in the event of the latter's default". This more direct wording clearly affirms the contractual nature of suretyship.

The text also specifies the distinction between simple and joint and several guarantees. According to article 2290, "joint and several liability may be stipulated between the guarantor and the principal debtor, between the guarantors or between them all". This clarification resolves the difficulties associated with multiple sureties, particularly when several people are guaranteeing the same debt.

One major change concerns the determination of the civil or commercial nature of guarantees. The ordinance adds an 11° to article L.110-1 of the French Commercial Code: "The law deems the following to be commercial transactions: [...] 11° Guarantees of commercial debts between all persons". Guarantees are now commercial or civil depending on the nature of the debt guaranteed, and no longer on the guarantor's interest in the main transaction.

Article 2291-1 also enshrines sub-guarantees, defined as "contracts by which a person undertakes to pay the guarantor what the debtor may owe him under the guarantee". This legal recognition provides a framework for a common practice in business financing.

A revised but unchanged set of formalities

The formalism that protects natural person guarantors remains, but has been streamlined. Article 2297 stipulates that "a natural person who is a guarantor must himself indicate that he undertakes as guarantor to pay the creditor what he is owed by the debtor in the event of the latter's default, up to a maximum amount in principal and ancillary sums expressed in words and figures".

The notion of "handwritten note" becomes "note affixed by the guarantor himself", allowing dematerialisation.
The amount must be shown in both words and figures (in the event of a discrepancy, the amount shown in words will prevail).
The statement may be shorter and is no longer subject to strict wording.
The requirement to specify a fixed term disappears

The amendment to article 1175 of the Civil Code removes the exception that prevented deeds relating to sureties from being concluded by electronic means. This change makes it possible to dematerialise sureties without reducing the protection afforded to sureties, since the substantive requirements remain unchanged.

For joint and several guarantors, article 2297 paragraph 2 provides that they must acknowledge that they "cannot require the creditor to sue the debtor first or to divide his proceedings between the guarantors". Otherwise, they retain the right to avail themselves of these benefits.

Centralised reporting obligations

The creditor's information obligations, which were previously scattered across several codes, are now grouped together in the Civil Code.

Article 2302 requires professional creditors to inform all natural person guarantors annually "of the amount of the principal of the debt, interest and other accessories outstanding at 31 December of the previous year". This information must be provided by 31 March at the creditor's expense.

In the event of default, the creditor forfeits "the guarantee for interest and penalties accrued from the date of the previous information until the date of communication of the new information". In addition, payments made during this period are deducted in priority from the principal of the debt.

Article 2303 also requires the professional creditor to inform the natural person guarantor "of the principal debtor's default as soon as the first payment incident is not remedied within one month of the payment becoming due". The same penalty applies in the event of default.

An important new feature is that article 2304 extends these information obligations to sub-guarantors. The guarantor must provide the sub-guarantor, a natural person, with the information received from the creditor within one month of receiving it.

Protection of the guarantor: warning and proportionality

The order codifies two essential jurisprudential mechanismsThe duty to warn and the requirement of proportionality.

Article 2299 provides that "the professional creditor is obliged to warn the guarantor, who is a natural person, when the commitment of the principal debtor is unsuited to the latter's financial capacities". The penalty is no longer civil liability but forfeiture: "the creditor forfeits his right against the guarantor to the extent of the loss suffered by the latter".

The proportionality of the undertaking is dealt with in article 2300: "If the guarantee given by a natural person to a professional creditor was, at the time it was entered into, manifestly disproportionate to the income and assets of the guarantor, it shall be reduced to the amount to which he could have committed himself at that date".

Unlike the previous system, the penalty is no longer nullity but reduction of the undertaking. This balanced solution protects the guarantor without completely depriving the creditor of its guarantee.

Article 2298 reaffirms the ancillary nature of suretyship by providing that "the guarantor may raise against the creditor all defences, personal or inherent in the debt, which belong to the debtor". This provision puts an end to disputed case law that limited the enforceability of personal defences against the debtor.

Recourse by the guarantor and extinction of the guarantee

The recourse of a guarantor after payment is maintained and clarified. Article 2308 recognises a personal recourse against the debtor "both for the sums paid by the guarantor and for interest and costs". Article 2309 also affirms the subrogatory recourse, which allows the guarantor to benefit from the securities attached to the debt.

On the other hand, the former recourse before payment (former article 2309) has been abolished, except in the case of collective proceedings where article L. 622-34 of the French Commercial Code allows the guarantor to "declare their claim in order to safeguard their personal recourse".

Termination of the guarantee is specified by several provisions:

Article 2315 allows a guarantor to unilaterally terminate a guarantee for an indefinite period, subject to prior notice.
Article 2316 specifies that the termination of a guarantee for future debts does not affect debts incurred previously.
Article 2317 limits the transfer to heirs to debts arising before death
Article 2318 deals with the consequences of the merger, demerger or dissolution of the legal entities party to the guarantee.

The situation of guarantors of current accounts is clarified by article 2319: "A guarantor of the balance of a current or deposit account may no longer be sued five years after the end of the guarantee". This provision puts an end to disputed case law that kept sureties liable for an excessive period of time.

To adapt your guarantees to these new rules and secure your guarantees, our firm offers you personalised legal support. The complexity of this reform requires precise expertise to avoid the pitfalls and optimise the protection of the parties involved.