Price, Payment and Breach in a French Sale: Payment Terms France

The buyer's main obligations: pay the price and take delivery

A sale is a reciprocal contract. Against the seller's duty to deliver and to warrant the goods stand the buyer's two principal obligations: to pay the price and to take delivery of the goods (the retirement of the thing sold). Understanding how payment terms France work therefore means looking at both sides of the buyer's position, because a failure to collect the goods carries consequences as real as a failure to pay. Both obligations flow from the same contract, and each is backed by a distinct set of statutory remedies in favour of the seller.

The obligation to pay is the buyer's central undertaking. Its content is fixed by the contract — the amount, the currency, the due date and the place of payment — and, where the contract is silent, by the default rules of the Civil Code. In cross-border trade these questions are frequently the source of dispute, since a foreign buyer and a French seller may each assume that their own domestic practice applies. Setting out clear payment terms at the contracting stage removes most of that uncertainty.

The obligation to take delivery is easy to overlook. The buyer must collect or accept the goods once the seller has placed conforming goods at its disposal; if it does not, the seller is not left holding the goods indefinitely. As explored below, French law allows the seller to treat an unjustified failure to take delivery of movable goods as a ground for automatic termination. This article maps the whole of the price-and-payment landscape and links out to the specialist clusters on each point, including the seller's remedies for non-payment and B2B payment terms and late-payment penalties.

When and where the price falls due (Articles 1650 and 1651)

The starting point is party autonomy. Under Article 1650 of the Civil Code, the buyer must pay the price at the time and at the place fixed by the contract of sale. A well-drafted contract will state a clear due date — payment on delivery, payment against invoice at a stated maturity, or payment in instalments — and the currency and method of payment. Where the parties have agreed a maturity date carried on the invoice, that date is also the starting point of the limitation period for the seller's action to recover the price, so it matters for enforcement as well as for cash flow.

Where the contract says nothing about time or place, Article 1651 of the Civil Code supplies the default: the buyer must pay at the time and place of delivery. Payment and delivery are treated as concurrent events, so the price is not due before the goods are delivered, and delivery does not raise a presumption that the price has been paid. The delivery must be complete: if the seller has failed to deliver an item that is indissociable from the whole — a component without which the system sold cannot perform one of its main functions — the price is not yet exigible.

Two related default rules are worth noting. First, interest on the price is due in only three cases under the Civil Code: where the contract provides for it, where the goods delivered produce fruits or other income, and from the date the buyer is formally put on notice to pay. Second, the buyer may lawfully suspend payment where it is disturbed, or has good reason to fear disturbance, by a claim that threatens to evict it from the goods, until the seller ends the disturbance or provides security. These defaults can all be displaced by contract, which is why express payment terms are preferable to relying on the code.

Statutory payment deadlines and late-payment penalties in B2B sales (Article L441-10)

For business-to-business sales, freedom of contract on payment terms France is capped by public-policy rules in the Commercial Code. Article L441-10 of the Commercial Code fixes a default deadline where the parties are silent and a maximum deadline that the parties may agree. In broad terms, the price falls due within thirty days of receipt of the goods or performance of the service in the absence of agreement, and the parties may extend that to a statutory ceiling — commonly expressed as sixty days from the invoice date, or forty-five days end of month where that basis is agreed. These limits are mandatory: a longer term agreed in the contract is not enforceable to the extent it exceeds the ceiling.

Late payment triggers penalties by operation of law. Interest runs automatically on any sum unpaid after the due date, at a rate that the statute pegs to the European Central Bank rate increased by a fixed margin of ten percentage points, subject to a floor. In addition, a business creditor is entitled to a fixed indemnity for recovery costs on each late invoice, on top of the interest and without the need to prove loss. These penalties are automatic — the seller does not need to include them in a demand for them to be owed — although a compliant invoice must set out the applicable rate and the recovery indemnity.

Non-compliance is policed by the administration, not only by the counterparty. Exceeding the statutory payment ceilings, or failing to apply the mandatory penalty terms, exposes a business to administrative fines that can be substantial and are regularly published. For a foreign seller, this cuts both ways: the statutory penalties are a powerful lever to obtain payment from a French buyer, but a foreign seller invoicing a French buyer must itself issue compliant terms. The detail — rates, thresholds, sector derogations and invoice mentions — is covered in B2B payment terms and late-payment penalties.

The unpaid seller's securities: retention, retention of title and the seller's privilege (Article 2332)

French law arms the unpaid seller with several layers of protection, some contractual and some conferred by statute. The first is the right to withhold delivery. Provided it offers a complete delivery, a cash seller is not obliged to hand the goods over while the buyer has not paid the price, unless the seller has granted a payment term. This exception d'inexécution is a practical self-help remedy: the seller keeps the goods, and its leverage, until payment. Where successive deliveries are agreed, a default on one delivery can justify refusing the following ones.

The second layer is the retention-of-title clause. The seller may defer the transfer of ownership until the price is paid in full, so that the goods remain its property in the buyer's hands until then. This is the single most effective protection where the buyer's solvency is in doubt, because it allows the seller to reclaim the goods rather than rank as an ordinary creditor. The mechanics, drafting and effect in the buyer's insolvency are dealt with in retention of title clauses.

The third layer applies even without a retention clause. Under Article 2332 of the Civil Code, the unpaid seller of a movable enjoys a privilege — a preferential ranking — over the thing sold. That privilege lets the seller be paid ahead of the buyer's other creditors out of the price of the goods, including on a resale price, but it does not carry a right to follow the goods into a third party's hands. Since a reform of security law, the unpaid seller's former right to revendicate the goods on this basis has been removed, so the privilege now operates as a ranking right rather than a right of recovery. The full menu of protections is set out in the seller's remedies for non-payment.

Termination for non-payment and failure to take delivery (Articles 1654 to 1657)

Where the buyer does not pay, the seller may seek termination of the sale. Under Article 1654 of the Civil Code, the seller may ask the court to resolve the sale for non-payment of the price. This résolution follows the general rules on judicial termination, with some particularities: only the seller (or a person subrogated to its rights) may bring it, and the fact that the seller has already sued for the price does not amount to a waiver of the right to seek termination instead. The court may order termination whatever the unpaid portion of the price.

Termination is not automatic in the absence of a clause. During the termination proceedings the buyer can still perform — a valid payment made before the seller has acquired a settled right to the action defeats it. If the parties want termination to operate of right, they should include an express resolutory clause. Even then, and drawing on the rule for immovable sales that is applied by analogy to goods, the buyer may usually still pay after the deadline until it has been formally put on notice by a demand; the parties may, however, contract out of that notice requirement.

The buyer's failure to take delivery is treated separately and more severely. Article 1657 of the Civil Code provides that, in the sale of movable goods, the seller may rely on automatic termination — resolution of right — where the goods have not been collected after the agreed period has expired, without the need to put the buyer on notice. Three conditions apply: the seller must first have delivered the goods as agreed, the contract must fix a term for collection and make it a determining condition, and the failure to collect must be attributable to the buyer rather than to force majeure or the seller's own act. Once the collection deadline passes, the risk in the goods also passes to the buyer, and the seller need no longer keep them available. The wider law on ending a sale is covered in terminating a sales contract for breach.

Price revision, indexation and penalty clauses

Alongside the payment mechanics, two families of clause routinely shape what the buyer actually pays. The first is the price-revision or indexation clause, which allows the contract price to move over time by reference to an index. These clauses are useful in long-term supply arrangements and in inflationary conditions, but their validity is regulated: the chosen index must have a defined relationship with the activity or object of the contract, and indexation to certain general measures is prohibited. Drafting a clause that will hold up is a technical exercise, addressed in price revision and indexation clauses.

The second is the penalty clause — a clause pénale — which fixes in advance the sum payable on a defined breach, typically late payment or late collection. Penalty clauses are valid and enforceable in French law and give the creditor a pre-agreed measure of compensation without proving its loss. They are, however, subject to judicial control: a court may reduce a penalty that is manifestly excessive, or increase one that is derisory, and this power cannot be excluded by the parties. A penalty for late payment therefore needs to be calibrated to a plausible estimate of loss to survive review. The drafting and control of these clauses are covered in penalty clauses.

The two devices are complementary. An indexation clause manages the price in ordinary conditions; a penalty clause manages the consequences of default. In a robust set of payment terms France, both are combined with a clear due date, a compliant late-payment interest mention, and a retention-of-title clause, so that the seller has a coherent position from invoicing through to enforcement. Each of these building blocks is examined in the dedicated cluster on the seller's remedies for non-payment.

Force majeure and hardship on the payment side

A buyer in difficulty will sometimes argue that events beyond its control excuse or defer payment. French law treats these arguments with caution where the obligation is to pay a sum of money. Force majeure — an unforeseeable, irresistible and external event — can suspend or discharge a party from performance, but the courts have consistently been reluctant to accept that a purely financial inability to pay qualifies. A buyer that has simply run short of funds cannot ordinarily invoke force majeure to avoid its debt.

Hardship (imprévision) is a distinct doctrine. Where an unforeseeable change of circumstances makes performance excessively onerous for a party that had not accepted that risk, the Civil Code allows that party to ask the other to renegotiate, and, failing agreement, to apply to the court to revise or end the contract. In practice, invoking hardship to escape a fixed price is difficult, and many contracts either exclude the doctrine or replace it with a bespoke renegotiation clause. The interaction between these mechanisms and the price is examined alongside price revision and indexation clauses.

For a seller, the practical lesson is to keep control of these defences by contract. A well-drafted sale will define force majeure narrowly, exclude financial difficulty from its scope, and address hardship expressly rather than leave it to the statutory fallback. It will also preserve the seller's securities so that, even if performance is delayed, the seller can rely on retention of title and the statutory privilege. This keeps a buyer's hardship argument from becoming a route to non-payment.

Putting it together: securing payment in a French sale

The price-and-payment rules are best approached as a sequence, from drafting through to enforcement. The aim is to fix clear payment terms France that are compliant with the statutory B2B ceilings, to back them with securities, and to know in advance which remedy to deploy if the buyer defaults. The steps below give a practical order of work for a seller dealing into or within France.

Followed in order, these steps turn a set of scattered code rules into a coherent commercial position. The individual building blocks — the securities, the late-payment regime, the termination routes and the clauses — are each treated in depth in the linked clusters, and our team can align them to your contract and your sector.

Frequently asked questions about price, payment and breach in a French sale

When must the buyer pay the price in France?

At the time and place fixed by the contract, under Article 1650 of the Civil Code. If the contract is silent, Article 1651 provides that payment is due at the time and place of delivery, so payment and delivery are treated as concurrent. In a B2B sale the agreed term must respect the statutory maxima under Article L441-10 of the Commercial Code.

What are the seller's remedies for non-payment?

The seller can withhold delivery, sue for the price with interest, rely on a retention-of-title clause to reclaim the goods, invoke the seller's privilege under Article 2332 of the Civil Code, or seek termination of the sale under Article 1654. Suing for the price does not waive the right to seek termination instead. These are set out in detail in our cluster on the seller's remedies for non-payment.

What late-payment rules apply between businesses?

Article L441-10 of the Commercial Code sets a default deadline and a mandatory maximum for B2B payment terms. Late payment triggers automatic interest — pegged to the ECB rate plus ten points, subject to a floor — plus a fixed indemnity for recovery costs on each late invoice. Exceeding the statutory ceilings can also attract administrative fines.

Can the seller reclaim the goods for non-payment?

Yes, in two main ways. A valid retention-of-title clause keeps ownership with the seller until full payment, allowing recovery of the goods. Separately, the seller may seek termination of the sale under Article 1654 of the Civil Code, which unwinds the contract subject to restitutions. The statutory privilege under Article 2332 gives a preferential ranking but not a right to follow the goods.

What happens if the buyer does not take delivery?

Failure to take delivery of movable goods is treated severely. Under Article 1657 of the Civil Code the seller may rely on automatic termination once the agreed collection period has expired, without putting the buyer on notice, provided the seller delivered as agreed and the contract fixed a determining term for collection. Once that deadline passes, the risk in the goods passes to the buyer.

Can a buyer refuse to pay because of a claim on the goods?

In limited circumstances, yes. Under the Civil Code the buyer may suspend payment if it is disturbed, or has good reason to fear disturbance, by a claim that threatens to evict it from the goods, until the seller ends the disturbance or provides security. This is a temporary suspension, not a discharge, and it can be waived by contract.

Does financial difficulty excuse a buyer from paying?

Generally not. The courts are reluctant to accept that a purely financial inability to pay amounts to force majeure, so a buyer that has run short of funds cannot ordinarily avoid its debt on that basis. Hardship (imprévision) is a separate doctrine allowing renegotiation of an excessively onerous contract, but it is difficult to invoke to escape a fixed price and is often excluded by contract.

Key takeaways on price, payment and breach in a French sale

How our French lawyers help with price, payment and breach

Petroff Avocats advises both sellers and buyers on the price and payment side of French sales of goods. For sellers, we draft compliant B2B payment terms, retention-of-title and penalty clauses, and enforce them — from formal notice through to an action for the price or termination and recovery of the goods. For buyers, we review terms for statutory compliance, advise on grounds to suspend or resist payment, and manage disputes over defective or non-conforming deliveries. Whether you are selling into France or buying from a French supplier, we align your contract, your invoices and your enforcement strategy so that the payment rules work in your favour.

This article is for general information only. It does not constitute legal advice and does not create a lawyer-client relationship. The law and its application to your circumstances may differ from the general position described here. Contact our French lawyers for advice on your situation.