Disproportionate Guarantee: Guarantor Fully Discharged, Bank Dismissed (CA Bordeaux, 22 June 2026, No. RG 24/03656)

CA Bordeaux, 4th Commercial Chamber, 22 June 2026, No. RG 24/03656

What happened in this case?

The facts are so commonplace that they will speak to a great many SME directors. Two partners, co-managers of a limited liability company (SARL), wished to finance the acquisition of the shares of a company. By a deed of 18 April 2018, the Caisse d’Épargne et de Prévoyance Aquitaine Poitou-Charentes (CEAPC) granted their SARL a professional loan of €373,000, repayable over 90 months. As is almost always the case with business credit, the bank required personal security: each of the two managers stood as personal and joint and several guarantor of the loan, up to €145,470 each, covering principal, interest, costs and ancillary sums.

Four years later, the dreaded scenario came to pass. By a judgment of 10 August 2022, the Bordeaux Commercial Court (tribunal de commerce) ordered the compulsory liquidation of the SARL. The bank filed its claim of €224,205.38 with the liquidator, notified both guarantors of the acceleration of the debt and formally demanded that each pay €67,261.61. Without success. By writs of 16 and 19 December 2022, the CEAPC summoned both guarantors before the Bordeaux Commercial Court for payment of €68,231.98 each.

By a judgment deemed adversarial (réputé contradictoire) of 24 May 2024, the Commercial Court ordered each of the guarantors to pay €67,331.98, plus interest at the statutory rate and capitalisation, as well as €2,000 under Article 700 and the costs. One of the two managers, who had not appeared at first instance, lodged an appeal on 1 August 2024.

Before the court, the appellant relied principally on Article L. 332-1 of the Consumer Code, in the version applicable to the case: his guarantee was manifestly disproportionate to his assets and income when it was entered into, and his situation did not allow him to meet it today either. In the alternative, he criticised the bank for a breach of its duty to warn and sought damages equivalent to the sum claimed, with set-off. In the further alternative, he requested payment terms over 24 months.

The Bordeaux Court of Appeal did not need to go beyond the principal ground: it held the guarantee to have been manifestly disproportionate from the moment it was concluded, found that the bank had not proved that the guarantor’s assets enabled him to pay on the day he was called upon, overturned the judgment and dismissed the CEAPC from all of its payment claims against the appellant. The bank was also ordered to pay the costs of the appeal and €3,000 under Article 700 of the Code of Civil Procedure (code de procédure civile).

What is a manifestly disproportionate guarantee?

The legislature perceived early on the danger of these commitments, often signed in a few minutes at the bottom of a loan offer, and whose consequences can ruin a family. That is why former Article L. 332-1 of the Consumer Code (resulting from the Dutreil Act of 1 August 2003, initially codified as Article L. 341-4) provides that a professional creditor may not rely on a guarantee entered into by an individual whose commitment was, at the time it was concluded, manifestly disproportionate to their assets and income, unless the guarantor’s assets, at the time they are called upon, enable them to meet their obligation.

Two features of this provision deserve emphasis, as they are the source of its strength. First, its scope is very wide: the court recalls that it benefits any individual guarantor, “whether or not they are a trader or a company director”. The manager who guarantees the debts of his own SARL is therefore protected in the same way as an ordinary private individual, something banks have long tried to have excluded, in vain. Second, its sanction is radical: as the judgment notes, the sanction for disproportion is not nullity of the contract, but the creditor’s inability to rely on the guarantee. In concrete terms, the commitment is deprived of effect in its entirety: the bank can claim nothing, not even a fraction proportionate to the guarantor’s means.

Which provisions apply to guarantees signed before 2022?

A chronological clarification is necessary, as it conditions the defence strategy of any guarantor. Ordinance No. 2021-1192 of 15 September 2021 reforming the law of security interests repealed Article L. 332-1 of the Consumer Code and transferred the rule to the Civil Code, at Article 2300. But the new provision, applicable to guarantees concluded from 1 January 2022, changed the sanction: a disproportionate guarantee is no longer deprived of effect, it is “reduced” to the amount up to which the guarantor could commit themselves, and the “return to better fortune” corrective has disappeared.

Guarantees signed before 1 January 2022, such as the one in this case, signed on 18 April 2018, remain governed by former Article L. 332-1 and its all-or-nothing sanction. For these commitments, the stakes are therefore at their highest: if disproportion is established and the bank fails to produce the proof incumbent on it, the guarantor is fully discharged, as in the judgment under review. Hundreds of thousands of guarantees currently in force still fall under this regime, and disputes on this basis are likely to continue for many years, given the duration of professional and property loans.

How is disproportion assessed at the time of signing?

The Bordeaux court methodically recalls the analytical framework, in two rigorously distinct stages. The first stage is at the date the commitment is concluded. Disproportion is assessed at that date, having regard to the amount of the commitment, the guarantor’s assets and income, and their overall indebtedness, which includes all expenses, debts and any other guarantees already given. The assessment is objective: the guaranteed amount is compared with the guarantor’s financial capacity, without regard to their personal qualities or business experience.

On the question of evidence, the rule is twofold. It is for the guarantor who relies on disproportion to prove it. But the judgment provides a valuable clarification: in the absence of a form recording the guarantor’s declarations about their assets and income, the guarantor is entitled to prove disproportion by any means.

The application to the facts is eloquent. No information form was in the file. The appellant had committed himself on 18 April 2018 for €145,470, whereas his 2018 tax assessment notice showed an annual income of €24,835 for the year 2017, and his last three payslips (January, February and March 2018) showed an average monthly salary of €1,901.50. He also maintained, without being contradicted by the bank, that he owned no real estate and had no savings.

The ratio speaks for itself: the commitment represented nearly six years of income for a guarantor with no assets whatsoever. The court deduces without great difficulty that the guarantee was manifestly disproportionate to the guarantor’s assets and income when it was concluded, a point which the bank itself hardly disputed. The whole battle therefore shifted to the second stage of the analysis.

Who must prove that the guarantor can pay on the day they are called upon?

This is the judgment’s most useful contribution in practice. Once the initial disproportion is established, the guarantee is not automatically neutralised: former Article L. 332-1 reserves the case where the guarantor’s assets, at the time they are called upon, enable them to meet their obligation. But, and this is decisive, the burden of that proof lies on the professional creditor, not on the guarantor. The Bordeaux court states this in a crystal-clear paragraph: it is for the professional creditor seeking to rely on a guarantee that was manifestly disproportionate when concluded to establish that, at the time it calls upon the guarantor, that is, on the day the guarantor is summoned, the guarantor’s assets enable them to meet their obligation.

The judgment also specifies the method for assessing this “return to better fortune”: the guarantor’s capacity is assessed not solely in light of the commitment whose performance is sought, but taking into account their overall indebtedness and all the asset and liability items making up their estate at the date of the summons.

In this case, the bank thought it had an arithmetical argument: the sum claimed, €67,331.98, was less than two years of the appellant’s cumulative gross income. The court sweeps this reasoning aside. On the day he was called upon, the guarantor still owned no real estate; his 2024 reference tax income was €22,483; his last six payslips (October 2025 to March 2026) showed an average net monthly income of €2,042.01; and he demonstrated current expenses (rent, water, electricity, insurance, telephone) of €778.78 per month. In other words, the sum claimed represented more than two years of his income, for a monthly disposable amount of around €1,260 once expenses were paid. The court concludes that the bank had not discharged the burden of proof incumbent on it, overturns the judgment and dismisses the CEAPC’s claims.

What is the practical significance of this judgment for guarantors?

This judgment overturning the first-instance decision is rich in concrete lessons for any individual sued as a guarantor, first and foremost directors and shareholders of companies placed in compulsory liquidation.

First lesson: never let a judgment ordering payment become final without a serious examination of the file. In this case, the guarantor had not appeared before the Commercial Court and had been ordered to pay by a judgment deemed adversarial. It was on appeal, with the file assembled and the grounds properly articulated, that the situation was entirely reversed: from an order to pay €67,331.98 (plus interest and capitalisation), the appellant moved to a full discharge, with €3,000 under Article 700 charged to the bank.

Second lesson: proof of initial disproportion is often more accessible than one might think. Tax assessment notices contemporaneous with the signing, payslips for the months preceding the commitment, absence of real estate and savings: these simple elements were enough. The absence of a financial information form (a frequent oversight by banks, particularly in loans to very small businesses) opens the way for the guarantor to prove their case by any means.

Third lesson, the most strategic: once initial disproportion is established, it is for the bank to prove that the guarantor can pay on the day of the summons, and this proof is demanding. A simple ratio between the sum claimed and gross income is not enough: the creditor must reconstruct the whole of the guarantor’s estate (assets and liabilities) and show that enforcement would leave the guarantor with enough to live on. Banks, which generally have no visibility on the guarantor’s up-to-date financial situation, very often fail at this stage. The guarantor, for their part, has every interest in documenting their expenses precisely: in this case, the supporting documents for rent, energy and insurance weighed in the court’s assessment.

A final point to note: the discharge based on disproportion rendered moot the alternative grounds based on the duty to warn and on payment terms. This is the logical order for a well-constructed guarantor defence: disproportion first, because its sanction is total; the duty to warn next, because it only compensates the loss of a chance not to commit oneself; and grace periods last, as an ultimate safety net.

For borrowers and guarantors faced with a formal demand or a summons from their bank, this judgment confirms that a technical defence, supported by precise financial documents, can lead to the complete defeat of the claims. Each case deserves an individualised examination: amount of the commitment, income and assets at signing, other guarantees in force, situation on the day of the summons, all parameters that determine the outcome of the dispute. A banking law lawyer will be able to audit the guarantee deed (handwritten notice, annual information, proportionality) and build the appropriate strategy before the appeal deadlines expire.

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