Cour de cassation, Commercial Chamber, 5 November 2025, No. 24-16.389, Published in the Bulletin
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The background of the case
In December 2009, the Caisse régionale de crédit agricole mutuel du Centre Ouest granted a one-million-euro loan to the company Rault financière, intended to finance the acquisition of 99.8% of the shares of the operating company Rault imprimerie. To secure the repayment of this substantial loan, two individuals, Messrs J. and X., committed themselves as joint and several sureties.
When the borrowing company ran into difficulties and became subject to collective proceedings resulting in its judicial liquidation, the bank naturally turned to the sureties to obtain payment of the amounts due. The sureties then challenged their commitment by invoking the manifest disproportionality of that commitment relative to their assets and income.
The Commercial Court of Châteauroux rendered an initial judgment on 10 June 2020. The Court of Appeal of Orléans reversed that decision on 11 April 2024 and ordered the sureties to pay. The latter filed an appeal in cassation, challenging in particular the inclusion in their assets of a retirement capitalisation fund of 35,000 euros that they could not access.
The mechanism of manifest disproportionality
The protective principle
The Consumer Code, in its Article L. 341-4, provides a mechanism for protecting individual sureties. This provision states that a professional creditor may not rely on a suretyship commitment given by a natural person where it is established that, at the time of its execution, it was manifestly disproportionate to the surety’s assets and income.
This rule aims to prevent a person from committing beyond their actual repayment capacity, thus creating a manifest imbalance between the commitment undertaken and the means at their disposal. It is a matter of public policy protection, which should apply automatically as soon as the conditions are met, in order to protect sureties against excessive commitments.
The assessment of assets
To determine whether a commitment is manifestly disproportionate, the courts must assess the surety’s assets at the date of execution of the suretyship. This assessment comprises two distinct but complementary components.
On the one hand, the surety’s income: this refers to the regular resources available to them (salaries, pensions, rental income, etc.). This income makes it possible to assess the person’s monthly or annual repayment capacity.
On the other hand, the surety’s assets: these are all the asset items comprising their estate (real property, financial investments, vehicles, etc.). These assets constitute a potential guarantee and reflect the person’s overall net worth.
The question that arises in practice concerns the exact scope of these assets: should all assets held by the surety be included, or only those that are genuinely available and can be mobilised if needed? This question is crucial for sureties, because the inclusion of locked assets can artificially inflate their apparent net worth without reflecting their actual ability to meet their commitments.
The question put to the Cour de cassation
In this case, Mr J. had declared that he held, at the time the suretyship was executed, a “retirement capitalisation fund” worth 35,000 euros. This was a retirement savings contract, more specifically a defined-contribution collective retirement contract taken out with Norwich Union (now Aviva), governed by Article 83 of the General Tax Code.
The particular feature of this type of investment is that it is by nature locked until the saver retires. In principle, the sums invested cannot be recovered early, except in very limited cases enumerated by law (expiry of unemployment benefit entitlement, judicial liquidation of a self-employed activity, severe disability).
The surety therefore argued, quite legitimately, that this investment, although existing, should not be taken into account in assessing his assets since he could not freely access it. If the suretyship were called upon, he would not concretely have been able to mobilise those funds to honour his commitment. This was a common-sense argument: how can a person be considered to genuinely have access to an asset that they cannot use?
The Court of Appeal of Orléans had unfortunately taken a position unfavourable to the sureties: it had included those 35,000 euros in Mr J.’s assets, considering that the deposited capital did constitute an asset item, regardless of its immediate availability.
The solution adopted by the Court
The principle adopted
The Cour de cassation dismissed the appeal and upheld the Court of Appeal’s position, to the detriment of the sureties. It stated: “the capital deposited in this fund had to be taken into account for the assessment of the manifest disproportionality of the commitment at issue, within the meaning of Article L. 341-4 of the Consumer Code, even if it was not immediately available”.
This solution is questionable because it favours a theoretical and accounting analysis of assets over a realistic approach to the sureties’ actual ability to meet their commitments. The Supreme Court considers that what matters is the surety’s formal net worth at the time they commit, without regard to the practical possibility of mobilising any given asset if needed.
This approach creates a concerning legal fiction: a person may hold assets on paper without being able to use them in practice. The fact that an investment is locked until retirement should logically be taken into consideration, as it does not constitute a resource that can be mobilised to honour a called suretyship. A surety cannot unlock their retirement savings to pay the debts of a third party.
The scope of the decision
This decision was published in the Bulletin of the Cour de cassation, giving it significant and binding normative authority for the future. It tightens the conditions for applying the protection of sureties and risks making it more difficult to invoke manifest disproportionality.
The Cour de cassation thus adopts an extensive interpretation of the concept of assets, to the detriment of the protection of sureties. It refuses to take into account the practical terms of asset availability and favours an abstract and theoretical view of the surety’s financial standing, disconnected from their actual ability to mobilise funds.
This approach is problematic: if all assets that are not immediately available are included, the assessment of the estate becomes artificial and no longer reflects the person’s actual situation. The comparison with real property, sometimes put forward to justify this solution, is not relevant: real property can be sold or mortgaged if needed, which is not the case for a retirement fund that is legally locked until retirement.
The Court also dismisses the argument based on Article L. 132-23 of the Insurance Code, which strictly governs the possibilities of early redemption of retirement savings contracts. For the Supreme Court, the legal impossibility of recovering the funds before retirement does not prevent their inclusion in the estate assessment, which constitutes an interpretation unfavourable to sureties’ interests.
Practical consequences
For sureties
This case law has concerning consequences for anyone considering standing as surety or challenging a commitment already entered into. It means that when their assets are assessed, sureties will no longer be able to exclude certain assets on the grounds that they are unavailable or locked, even if that unavailability is total and legally imposed.
In practical terms, the following must now be included in the estate: employee savings plans (PEE) even if locked, life insurance contracts not immediately redeemable, retirement savings plans (PER), fixed-term deposits, or certain financial investments subject to mandatory holding periods. This systematic inclusion penalises sureties who have shown foresight by building savings for their future.
This situation significantly reduces the chances of having manifest disproportionality recognised, since the apparent estate will be mechanically larger. A person who legitimately believed they could invoke the weakness of their available estate will be confronted with all their investments, even those that are locked and inaccessible. This case law development considerably weakens the protection that the legislature intended to grant to sureties.
For banks
For credit institutions, this decision constitutes an undeniable legal advantage. It allows them to assess the proportionality of a suretyship on the basis of a broader view of the surety’s estate, including assets that the surety cannot actually mobilise.
Banks can now ask sureties to declare all their assets, including the most inaccessible ones, and rely on those elements to consider that a commitment is proportionate, even if the surety does not have actual repayment capacity. This case law affords them increased protection against challenges.
This development strengthens the banks’ position vis-à-vis sureties and reduces the risk of a commitment being called into question. However, credit institutions should maintain an ethical and prudent approach: the fact that a retirement fund must legally be taken into account should not absolve them from honestly assessing the consistency between the commitment requested and the person’s actual capacity.
In conclusion, the ruling of 5 November 2025 marks a concerning setback in the protection of sureties. By favouring a theoretical approach to assets rather than an analysis of actual repayment capacity, the Cour de cassation adopts a position that weakens those who stand as surety and favours the interests of credit institutions. This decision underscores the absolute necessity for anyone considering standing as surety to first consult a lawyer specialising in banking law, who alone can precisely assess the risks incurred and warn against the potentially devastating consequences of such a commitment. In light of this unfavourable case law, caution and prior legal advice are more essential than ever.
