Unpaid invoices: what is the time limit for taking action against a consumer?

In a ruling handed down on March 1, the French Supreme Court (Cour de cassation) reminds us that the starting point for bringing an action for payment of an unpaid invoice against a consumer is the date of completion of the work or performance of the service.

Completed work and unpaid invoice

In this case, a private individual had commissioned a general masonry company to build a retaining wall and repair terraces. A few days later, the company sent him an invoice for the balance of the work. More than 2 years after this document was issued, the company, awaiting payment and after an amicable appraisal, summoned its customer to pay its claim.

The customer's argument is based on the statute of limitations. In the case of an unpaid invoice for the sale of a good or service to a consumer, professionals have 2 years to act, starting from the day when they knew or should have known the facts enabling them to take action for payment.

Two years to take legal action

In this case, the judges consider that the starting point of the limitation period is the date of completion of the work, and not the date on which the invoice is issued, unless the contract specifies otherwise.

The Cour de cassation ruled against the professional, pointing out that, in accordance with articles 2224 of the French Civil Code and L 218-2 of the French Consumer Code, an action for payment for work or services brought against a customer by a professional is time-barred from the date on which the latter becomes aware of the facts. This date corresponds to the completion of the work or performance of the services.

An important change in the event of a dispute with a customer

This decision by the French Supreme Court (Cour de cassation) on March 1, 2023 marks a procedural turning point that should be borne in mind in the event of a dispute with a customer.

In general, to avoid unpaid invoices and late payments, it is advisable to :

  • inquire about the customer's creditworthiness,
  • keep all proof of service,
  • offer a variety of payment methods (online payment, deferred payment, etc.),
  • provide for late payment penalties,
  • insure risky invoices to guarantee payment.

For better management of unpaid invoices, the help of a chartered accountant can prove invaluable. This professional offers support and monitoring of customer payments. He or she will explain to companies how to dun invoices and the procedures available to them to recover their funds.

It is essential to set up a good invoicing system to avoid unpaid bills, and to be able to take legal action if necessary within the time limits laid down in the French Consumer Code.