Disproportionate Guarantee and Annual Information: Two Requirements Restated by the French Supreme Court (Cass. com., 11 March 2026, No. 24-18.830)

French Supreme Court, Commercial Chamber, 11 March 2026, appeal No. 24-18.830

What Was the Background to the Case?

On 13 January 2016, a mutual bank granted a company a current account credit facility of €25,000, at an interest rate of 4.17%. On the same day, the company’s manager signed a joint and several guarantee limited to €32,500, a sum covering the principal as well as any interest, costs and ancillary amounts.

Nearly four years later, on 23 December 2019, the bank terminated the facility and gave the company formal notice to regularise its position within sixty days. Successive formal notices went unanswered. The bank therefore sued for payment both the company, as principal debtor, and the guarantor, claiming €35,584.09, plus contractual interest.

Before the Court of Appeal (cour d’appel), the guarantor put forward two classic defences: the manifest disproportion of his commitment, and the bank’s failure to comply with its annual information obligation. The appeal judges rejected both arguments and upheld the order against him. The guarantor then lodged an appeal on points of law, which led, on 11 March 2026, to a partial quashing of the judgment on both points.

How Is the Disproportion of a Guarantee Assessed?

The first ground of appeal concerns the assessment of disproportion. The rule is laid down in former Article L. 341-4 of the Consumer Code, applicable to guarantees entered into before 1 July 2016 (and now codified in Article L. 332-1 of the same code): a professional creditor may not rely on a guarantee given by an individual whose commitment was, when it was entered into, manifestly disproportionate to his assets and income, unless the guarantor’s estate, at the time he is called upon, enables him to meet his obligation.

Why Must the Accumulation of Surety Commitments Always Be Examined?

In this judgment, the French Supreme Court restates a principle that is now well established but that the lower courts and the banks still frequently neglect: “the disproportion of the commitment of a guarantor who is an individual must be assessed by taking into account the guarantor’s overall indebtedness, including that resulting from surety commitments”.

This rule has considerable practical significance. Many guarantors, whether managers of small and medium-sized businesses or partners in a property holding company (SCI), successively sign several guarantees for different credit lines, investment loans, overdraft facilities, lease guarantees, performance bonds and so on. Taken in isolation, each commitment may appear reasonable in light of their income. But it is the accumulation that creates the disproportion, by adding together commitments that, taken as a whole, far exceed the guarantor’s resources and assets.

The Court of Appeal of Bordeaux had nevertheless refused to carry out this review. Its reasoning was as follows: as the guarantor had not produced a tax assessment notice for the year 2015, his exact income at the date the guarantee was signed was not known; the court deduced from this that “there is [no] need to determine the amount of the previous guarantees to be taken into account in calculating his indebtedness” and that the guarantor had not proved that his commitment was manifestly disproportionate.

The Commercial Chamber quashed this reasoning for lack of legal basis (défaut de base légale). The Court of Appeal could not dispense with examining the accumulation of earlier guarantees on the sole pretext that the exact amount of income for 2015 was not substantiated. As the judgment states: “in so deciding, without examining, as it was invited to do, whether the accumulation of the surety commitments entered into by Mr [J] and mentioned on the information form did not render the disputed guarantee manifestly disproportionate to the guarantor’s assets and income, the Court of Appeal failed to give a legal basis to its decision”.

Who Bears the Burden of Proof?

The judgment’s implicit reminder deserves emphasis: it is indeed the guarantor who bears the burden of proving disproportion. He must prove, exhaustively, the composition and value of his assets and income at the date the guarantee was entered into. This rule, enshrined in the settled case law of the Commercial Chamber, may seem harsh, but it is tempered by two useful mechanisms.

First, the information form signed by the guarantor when the guarantee was entered into is, in practice, the evidentiary pivot of the analysis. It is authoritative as to the information it contains (declared income, assets, earlier commitments), unless the bank, having carried out additional checks, proves otherwise. The lower courts cannot disregard these entries without justification.

Second, case law allows the guarantor to supplement and clarify this information by any means, including tax assessment notices for the year concerned. The fact that a particular notice is missing from the file does not relieve the court of examining the other objective evidence (earlier commitments entered on the form, for example) that may in itself establish disproportion.

How Must the Bank Prove That the Annual Information Was Sent?

The second ground of appeal, equally instructive, concerns the annual information obligation owed by the bank to the guarantor.

What Exactly Does Article L. 313-22 of the Monetary and Financial Code Say?

The text applicable at the time (in its wording prior to Ordinance No. 2016-1691 of 9 December 2016) imposes on a credit institution that has obtained a guarantee from an individual in respect of financial support granted to a business a periodic information obligation: before 31 March each year, it must inform the guarantor of the amount of principal and of interest, commissions, costs and ancillary amounts outstanding at 31 December of the previous year, as well as the term of the commitment.

What Is the Sanction for Failure to Prove Compliance?

Where the bank fails to show that it did actually send this information each year, it forfeits its right to contractual interest, which can reduce the debt claimed accordingly. On a guarantee entered into in 2016 for a debt that is only claimed in 2021, the loss of accumulated interest can amount to several thousand euros.

In the case under discussion, the bank produced two types of evidence:

• the copies of the information letters said to have been sent to the guarantor each year from 2017 up to the date of the summons;
• bailiff’s reports (procès-verbaux de constat) drawn up annually from 2016 to 2020 by a bailiff (huissier de justice), recording a spot check of the sending of information letters to the bank’s guarantors.

The Court of Appeal had held this evidence to be sufficient. It considered that the combination of copies of letters and bailiff’s reports proved that the bank had performed its information obligation.

The Commercial Chamber quashed this analysis. Its answer, brief but clear, deserves to be quoted: “in so deciding, without examining, as it was required to do, whether the name of Mr [J] appeared in the bailiff’s reports or in mailing lists of the information letters sent to guarantors, the Court of Appeal failed to give a legal basis to its decision”.

In other words: the copy of a standard letter does not prove that it was sent to an identified recipient. A bailiff’s report that merely attests to a spot check, without a list of named recipients, proves no more that the letter was sent to this guarantor. To escape forfeiture of interest, the bank must be able to produce personalised evidence: a mailing list naming the recipients, a postal certificate, a bailiff’s report that states the guarantor’s name precisely in the list of recipients, or any other item establishing that the letter was sent individually.

What Are the Practical Consequences for Guarantors?

This judgment is doubly useful to guarantors currently being pursued by their bank. It opens two parallel lines of defence, which can be combined before the court to which the case is remitted (in this case, the Court of Appeal of Toulouse).

On disproportion, the message is clear: it is never pointless to produce the information form signed when the guarantee was originally entered into. All earlier commitments mentioned in it, even partially, must be examined by the lower courts in order to assess whether the disputed guarantee is manifestly disproportionate. The absence of perfect documents for the exact year of signature is no obstacle to this examination, provided that the accumulation of earlier commitments already appears from the file.

On annual information, the judgment is a reminder that one must systematically challenge the evidence of individually addressed mailing, even where the bank produces copies of standard letters and bailiff’s reports drawn up for the proceedings. The lower courts must require an item that links the guarantor personally to the mailing: a nominative list, a tracking register, an individualised report. Failing that, forfeiture of the right to interest follows.

In practical terms, combining the two grounds makes it possible to seek, at the same time:

• the total unenforceability of the guarantee against the guarantor, if disproportion by accumulation is established;
• forfeiture of the right to contractual and ancillary interest, where there is no evidence of individualised annual information;
• a drastic reduction of the debt claimed, brought down to the principal actually due, calculated after sums already received have been applied first to the capital.

How to Build an Effective Defence After This Judgment

For a guarantor who has been sued by his bank, the strategy to be drawn from this decision can be structured in several steps.

The first step is to obtain the information form signed when the guarantee was entered into. This is a document that the bank necessarily holds and is bound to produce as soon as it intends to rely on the guarantee. The form is doubly valuable: it reveals earlier commitments that would not otherwise appear in the file, and it may disclose erroneous or contradictory information that the bank cannot explain.

The second step is to reconstruct the accumulation of guarantees at the date of the disputed guarantee. All previously signed instruments must be identified, added up, and compared with the guarantor’s assets and income. It is not necessary to have mathematical proof of every item of income for the precise year: it is enough that the accumulation, set against the highest income that can reasonably be presumed, reveals manifest disproportion. Case law does not require a scientific demonstration but an overall assessment.

The third step is to require the bank to produce nominative evidence that the annual information letters were sent for each year that has elapsed. The debate must not be limited to copies of standard letters or generic bailiff’s reports: one must ask for the nominative mailing list or, failing that, have the court note the absence of such evidence and draw the legal consequence, namely forfeiture of interest.

Beyond these two lines, other defences remain available depending on the situation: nullity of the instrument for defective consent, absence of the mandatory handwritten wording, holding the bank liable for breach of its duty to warn, and challenging the calculation of the principal claim. Each case deserves careful analysis; in court, it is often the combination of several levers that produces the most favourable result.

Conclusion: A Judgment That Recalls the Rigour Required of Banks

The judgment handed down on 11 March 2026 by the Commercial Chamber of the French Supreme Court is not, strictly speaking, a leading decision: it forms part of case law already established on disproportion by accumulation and on the rigour required for proof of annual information. But it has the merit, in an ordinary case and with educational reasoning, of reminding the lower courts that these two checks are unavoidable.

For guarantors, the message is encouraging. The scope for defence is wider than it appears, and the evidentiary weakness of many bank files on annual information remains a particularly fertile ground. It is essential not to resign oneself to a summons: careful examination of the file often reveals failings that, on their own, can turn an improbable defence into a courtroom success.

The firm LE BOT Avocat regularly acts for guarantors sued by their bank. Rigorous legal analysis, combined with a high evidentiary standard demanded of credit institutions, often makes the difference before the lower courts.

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