Consumer credit contracts are subject to strict formalities. This legal framework aims to protect consumers, who are often unprepared for the legal intricacies of these financial commitments. Why so many forms to sign? What rights does the borrower have? When is the contract definitively concluded?
1. Protective formalities
Consumer credit law imposes a set of formalities before a contract is signed. This formalism is more than just administrative paperwork: it is a bulwark against rash commitments.
The Court of Cassation has repeatedly stated that ". the public policy formalities governing consumer credit cannot be circumvented " (Cass. 1st civ., 22 Sept. 2016, no. 15-21.524).
Failure to comply with these rules may result in total or partial forfeiture of the right to interest for the lender. This severe penalty reflects the importance attached to this pre-contractual phase.
2. Mandatory pre-contractual information
Standardised information sheet
It all starts with information. Article L. 312-12 of the French Consumer Code requires lenders to provide a European Standardised Information Sheet (ESIS).
- Type of credit
- The total amount and its duration
- The borrowing rate
- APR (Annual Percentage Rate)
- Terms and conditions of reimbursement
- Any expenses
Case law is inflexible: simply stating in the contract that the consumer has received this information sheet is not enough. According to the Court of Cassation, " the borrower's signature on the preliminary offer containing a clause stating that he acknowledges that the lender has given him the withdrawal form is merely an indication that it is up to the borrower to corroborate with one or more additional items of information "(Cass. 1st civ., 21 Oct. 2020, no. 19-18.971).
Assessing solvency
Before making any offer, the lender must assess the creditworthiness of the prospective borrower. Article L. 312-16 of the Consumer Code requires them to do so.
The lender systematically consults the FICP (Fichier national des Incidents de remboursement des Crédits aux Particuliers). For loans over €3,000 or taken out remotely, the borrower must provide specific supporting documents (article D. 312-8 of the French Consumer Code).
The CJEU emphasised the importance of this verification in a judgment of 5 March 2020 (Case C-679/18), stating that the national court could find of its own motion a breach of this obligation.
3. The credit offer
Mandatory content
The offer of credit, whether on paper or on a durable medium, must meet specific requirements (article L. 312-18 of the French Consumer Code).
- A summary box at the beginning of the contract
- The identity and contact details of the parties
- The amount of the credit and the conditions under which it is made available
- The duration of the contract
- Terms and conditions of reimbursement
- The interest rate and the APR
This information must appear in a minimum font size (8 point). Article R. 312-10 of the French Consumer Code specifies the hierarchy and order of this information.
If the contract is not compliant, the lender may forfeit its right to interest (article L. 341-4 of the French Consumer Code).
Offer validity period
The offer of credit must be maintained for a minimum period of 15 days from the date of issue. This period gives the consumer an inescapable cooling-off period (article L. 312-18 of the French Consumer Code).
During this period, the terms and conditions offered (particularly the interest rate) cannot be changed. Small nuance: this is an offer subject to approval, which means that the lender retains the option of ultimately refusing to grant the loan.
4. The borrower's consent
Acceptance of the offer
The borrower indicates acceptance by signing (physically or electronically). This signature must be handwritten for paper offers.
For a period of 7 days following signature, article L. 312-25 of the French Consumer Code prohibits any payment of money between the parties. This "freeze" on financial flows reinforces the considered nature of the commitment.
Lender approval
The contract is not yet definitively formed once the borrower has accepted. Article L. 312-24 of the Consumer Code stipulates that the lender's approval must be given within 7 days.
If no response is received within this period, approval is deemed to have been refused. In practice, approval often takes the form of funds being made available.
According to the Cour de cassation, the starting point of the limitation period for an action for forfeiture of interest begins to run ". at the earliest, on the day of acceptance of the offer "(Cass. 1re civ., 1 Feb. 2023, no. 21-18.817).
5. The withdrawal form
Mandatory information
Article L. 312-21 of the French Consumer Code requires the presence of a detachable withdrawal form in the offer of credit. This form must comply with the model annexed to article R. 312-9 of the same code.
This form is the material tool that enables borrowers to exercise their right of withdrawal within 14 calendar days. This period may be reduced to 3 days if immediate delivery is expressly requested.
Proof of delivery
Case law is particularly demanding on this point. In 2020, the Court of Cassation made a significant turnaround, stating that ". the borrower's signature on the preliminary offer containing a clause stating that he acknowledges that the lender has given him the withdrawal form is merely an indication that it is up to the borrower to corroborate with one or more additional items of information "(Cass. 1st civ., 21 Oct. 2020, no. 19-18.971).
This position considerably strengthens the borrower's protection by lightening the burden of proof. From now on, it will be up to the lender to demonstrate by additional evidence that the slip was indeed delivered.
Failure to provide sufficient proof will result in the forfeiture of the right to interest for the lender.
The contractual process: a signposted path
This formality may seem cumbersome, but it plays an essential role. Credit sometimes commits borrowers for long periods. The consequences of over-indebtedness can be disastrous for households.
Experience shows that checking the conditions under which credit agreements are drawn up is often an effective defence. In the event of a payment default, the first step is always to check that the lender has complied with these formalities.
For an in-depth analysis of your credit contract, a consultation with a specialist lawyer to detect any irregularities. This can lead to a forfeiture of the right to interest, significantly reducing the amount of your debt. Our firm offers a detailed examination of your contracts to identify these legal opportunities.
Sources
- Consumer Code: articles L. 312-12 to L. 312-30, R. 312-1 to R. 312-35
- Cass. 1st civ., 22 Sept. 2016, no. 15-21.524
- Cass. 1st civ., 21 Oct. 2020, no. 19-18.971
- Cass. 1re civ., 1 Feb. 2023, no. 21-18.817
- CJEU, 5 March 2020, Case C-679/18
- Fascicule 719: Crédit à la consommation - Régime du Code de la consommation (JurisClasseur Droit bancaire et financier)
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