Disproportionate personal guarantee: expired prior commitments

A prior personal guarantee (cautionnement) that has reached its end date must be taken into account when assessing whether the guarantor's assets allow them to meet a disproportionate personal guarantee. The end date brings an end to cover for new debts, not to the obligation to pay those that have already arisen, unless a contractual stipulation limits the creditor's right to pursue the guarantor in time.

The essentials

• A professional creditor cannot rely on a personal guarantee entered into by a natural person whose commitment was manifestly disproportionate to their assets and income when it was given, unless the guarantor's assets, at the time when they are called upon, allow them to meet their obligation.
• The assessment of disproportion takes into consideration the guarantor's overall indebtedness, including that resulting from personal guarantees previously entered into, so long as those personal guarantees have not been extinguished in whole or in part.
• A personal guarantee that has reached its end date is not thereby extinguished: the guarantor remains bound to pay the claims that arose before that date, unless an express stipulation limits the creditor's right to pursue in time.
• The amount to be taken into account for each prior commitment corresponds to the sums remaining due under the secured principal obligation, and not to the nominal cap in the instrument.
• Disregarding a prior personal guarantee solely on the ground that its term has expired distorts the calculation of the guarantor's indebtedness.

A secured business loan and guarantors pursued for payment

The expiry of the term of a personal guarantee does not release the guarantor from their obligation to pay. The commercial chamber partially quashes the decision under appeal (CA Metz, 27 March 2025, No. 23/00958): the prior personal guarantees that had reached their end date had to be included in the guarantor's indebtedness, in order to assess whether their assets allowed them to meet the disputed commitment (Com., 8 July 2026, No. 25-16.540).

In 2011, a bank granted a business loan to a company. Two natural persons stood as joint and several guarantors for all sums due under that loan, in principal, interest and, where applicable, penalties or default interest. The company was then placed in judicial reorganisation (redressement judiciaire), and subsequently in compulsory liquidation (liquidation judiciaire). The bank issued a writ of summons (assignation) against both guarantors to enforce their commitments. One of them had, in the preceding years, entered into several other personal guarantees, in favour of another credit institution and of the same bank.

The court of appeal held that the disputed personal guarantee was manifestly disproportionate at the date it was given. It therefore considered whether the guarantor's assets allowed them to meet their obligation at the date of the writ of summons. In order to find that they did, it disregarded the guarantee commitments entered into in 2010 in favour of another institution, granted for a term of six years and already expired. It inferred from this that the guarantor was released from them.

The commercial chamber first sets out the rule drawn from Articles 1134 and 2292 of the French Civil Code, in their earlier wording applicable to the dispute (free translation):

It follows from the first two of these provisions that, in the absence of an express contractual stipulation limiting the creditor's right to pursue in time, the fact that the guarantor is called upon to pay after the end date of their commitment has no bearing on the guarantor's obligation in respect of the claim that arose before that date. This rule applies even where the personal guarantee is given to secure a specific debt.

The consequence is direct: the 2010 commitments, whose existence the court of appeal recorded, had to be taken into consideration despite the expiry of their term. The court of appeal failed to draw the legal consequences of its own findings. The case is remitted to the cour d'appel de Nancy on the quashed heads alone. The second ground of appeal did not call for a specifically reasoned decision.

What indebtedness must be counted for a disproportionate personal guarantee?

The guarantor's indebtedness includes their prior personal guarantees that have not been extinguished, including those whose cover period has ended. A personal guarantee gives rise to two distinct obligations. The cover obligation determines the period during which new debts fall within the guarantee; it ends, in principle, on the agreed date. The payment obligation (obligation de règlement), for its part, requires the guarantor to pay the debts that have already arisen during that period. The end date extinguishes the first, not the second.

The calculation of indebtedness follows this distinction. A personal guarantee whose term has expired remains a potential burden so long as the secured principal debt has not been paid. The commercial chamber specifies the amount to be taken into account: the sums remaining due under the secured principal obligation. The cap stated in the instrument is therefore not the relevant figure where the secured credit has been partly repaid.

For a guarantor pursued for payment, the stakes are concrete. Establishing that their assets do not allow them to meet the commitment requires producing a complete inventory of their past guarantees and the corresponding statements of account. For the credit institution, the opposite demonstration cannot stop at the expiry date of the earlier instruments.

Cover obligation and payment obligation

The decision holds that only the extinction of the secured debt, and not the expiry of the term, removes a prior personal guarantee from the calculation. The commercial chamber sets out the applicable test:

The disproportion of the commitment of the guarantor, a natural person, as referred to in that provision, must be assessed by taking into consideration their overall indebtedness, including that resulting from guarantee commitments previously entered into, provided that those personal guarantees have not been extinguished, in whole or in part.

Two limits frame the solution. The rule applies in the absence of an express contractual stipulation limiting the creditor's right to pursue in time: a clause of that kind changes matters. Moreover, the appeal to the Cour de cassation (France's highest civil court) pointed out that this right to pursue is exercised within the limits of the limitation period (prescription). The quashing is partial and the case is not decided: the court to which it is remitted will have to quantify the sums remaining due on the prior commitments, then assess the guarantor's assets at the date on which they were called upon.

As the case law stood on 8 July 2026, the solution is given on the basis of Article L. 341-4 of the French Consumer Code, in its then applicable wording, and of Articles 1134 and 2292 of the French Civil Code in their earlier wording. The method for calculating overall indebtedness is, however, set out in general terms by the commercial chamber.

Checks to run on prior personal guarantees

The debate on disproportion is won on the documents, prior commitment by prior commitment. A guarantor relying on disproportion would do well to gather every personal guarantee or aval (guarantee of payment given on a bill or credit facility) instrument entered into before the disputed commitment, together with the amortisation schedule and the balance of the secured credit. The professional creditor seeking to rule out disproportion must, symmetrically, establish that the earlier guarantees no longer weigh, that is to say that the corresponding principal debts have been extinguished.

Two points of vigilance emerge from the decision. The expiry date stated in a personal guarantee instrument proves nothing as to the fate of the secured debt. A finding made in the reasoning of a decision, such as the existence of prior commitments, must be followed through to its consequence: their inclusion in the calculation. Lastly, the drafting of the instrument remains decisive, since an express stipulation may limit the creditor's right to pursue in time.

Points to check before calling on a guarantor

Before calling on a guarantor whose commitment appears disproportionate, the professional creditor is well advised to list all personal guarantees and avals previously entered into by them. The expiry of the term of those commitments is not enough to remove them from the calculation of indebtedness. Only the total or partial extinction of the secured principal debt reduces the burden to be taken into account, to the extent of the sums remaining due. The guarantor pursued for payment, for their part, is well advised to evidence those balances by dated statements of account. Lastly, the drafting of the instrument deserves careful reading, since an express stipulation may limit the creditor's right to pursue in time.