Bills of Exchange and Promissory Notes in France: The Creditor’s Playbook for Faster B2B Recovery

In France, two old-school payment instruments still show up in modern B2B debt collection—and when used correctly, they can give creditors real leverage: bills of exchange and promissory notes.

Most business owners treat them as paperwork that “the bank handles.” That’s a mistake. These instruments can:

• strengthen your position when the buyer tries to dispute payment,

• give a bank or factoring company confidence to finance your receivables,

• and, in some cases, unlock faster protective actions when non-payment hits.

But they can also backfire if the document is defective, deadlines are missed, or a personal guarantor signs in a way that was never intended.

Below is a creditor-focused, readable guide to how France’s legal framework works—with the key statutory references and court decisions—and the practical moves that matter when you’re trying to get paid.

1. Why these instruments still matter in France (and why creditors should care)

A bill of exchange or promissory note is not just “a payment promise.” Under French commercial law, it’s a negotiable instrument designed to circulate. That is exactly why it can be powerful: once it circulates to a third-party holder (often a bank), the debtor’s ability to raise ordinary contract defenses can shrink dramatically.

These instruments are used primarily in intercompany payments. They are also tied to financing practices such as discounting (where a bank advances cash against the instrument and later collects at maturity). In practice, this means the party enforcing payment at maturity is frequently the bank—not the supplier.

That structure changes the collection dynamic in two ways:

1. The holder can pursue multiple liable parties when payment is refused at maturity (French Commercial Code art. L. 511-38).

2. Debtors often cannot rely on “the goods were defective” or “the service wasn’t performed” to block payment against a good-faith third-party holder (French Commercial Code art. L. 511-12).

The law is strict about where these instruments belong. They are not allowed in consumer credit. Bills of exchange and promissory notes cannot be validly signed or guaranteed in consumer credit transactions (French Consumer Code art. L. 314-21), and the French Supreme Court confirmed the nullity of such an instrument (Cass. civ. 1re, 30 Sept. 1997, n° 95-20171).

For business creditors, however, they remain a serious tool—if you treat them like a legal instrument, not a formality.

2. Bills of exchange vs promissory notes: what’s the difference for debt recovery?

Bills of exchange: three-party structure, heavy impact of “acceptance”

A bill of exchange involves three roles:

• the creditor issues the instrument,

• the debtor is the party who must pay,

• the payee/holder is the person entitled to be paid (which can be the creditor, the creditor’s bank, or another party).

The game-changer here is acceptance. Acceptance is the debtor’s formal commitment on the instrument to pay the holder at maturity (French Commercial Code art. L. 511-19). When acceptance exists, the holder’s enforcement position becomes much stronger.

Acceptance is usually optional, but it becomes mandatory in a specific B2B supply scenario where both parties are merchants and the supplier performed and the buyer had time to check conformity (French Commercial Code art. L. 511-15, al. 9). Refusal in that context can trigger immediate payment consequences.

Acceptance also drives litigation risk: if the acceptance signature is forged or signed by someone without authority, the debtor may not be bound under negotiable-instrument rules (Cass. com. 2 Dec. 1997, n° 96-10354; Cass. com. 1 Apr. 2014, n° 13-13473).

Promissory notes: simpler structure, but a contractual condition affects the supplier—not the holder

A promissory note is a direct written undertaking by the debtor to pay a sum at a fixed date.

French law adds a creditor-protection rule: using a promissory note as the payment method is permitted only if it was expressly agreed and stated on the invoice (French Commercial Code art. L. 512-8). This rule exists for a real-world reason: it prevents buyers from sending a promissory note at the last minute, leaving the supplier unable to obtain financing through discounting.

But here’s the crucial collection point: a debtor cannot use “we didn’t agree to pay by promissory note” as a defense against a good-faith third-party holder. The French Supreme Court held that prior agreement is not a condition of the note’s validity in the hands of a good-faith holder (Cass. com. 12 Feb. 1991, n° 89-15568).

Translation into creditor reality: your buyer may try to argue “we never agreed to this instrument,” but if the note has circulated to a bank or another holder acting in good faith, that argument usually won’t save them.

3. The biggest creditor advantage: contract disputes don’t always block payment

One of the most creditor-friendly pillars of French negotiable instrument law is the rule that debtors generally cannot raise defenses based on their private contract disputes against a good-faith holder (French Commercial Code art. L. 511-12). It’s a clean commercial logic: negotiable instruments should circulate with confidence.

But there are two limits creditors must understand because they affect strategy:

1. If the supplier remains the holder (meaning the instrument never circulated), the debtor can usually raise ordinary contract defenses against the supplier. The “no defenses” rule is at its strongest when the instrument has circulated at least once.

2. Bad faith breaks the shield. If the holder acquired the instrument knowing it would harm the debtor—classic allegations include a bank discounting instruments while knowing the drawer’s situation was hopeless—the debtor may be able to raise defenses. Courts assess the holder’s good or bad faith at the time of acquisition. The French Supreme Court rejected the idea that “fast discounting” alone proves bad faith if the drawer’s situation was not irretrievably compromised at that time (Cass. com. 19 Feb. 2013, n° 12-12839).

For debt collection professionals, this matters because it tells you how to frame enforcement:

• If you’re the original supplier and there’s a dispute about performance, you may need to reinforce your file with contract evidence (delivery notes, acceptance records, correspondence).

• If the instrument has circulated and you’re acting as holder (or for the holder), the dispute narrative may become legally irrelevant unless bad faith can be shown.

4. The hidden risk most suppliers miss: the bank can come after you

A lot of suppliers assume: “If my customer doesn’t pay, the bank will chase them.” Often true—but incomplete.

If you endorsed the instrument to the bank (common in discounting), the bank may also have recourse against you as drawer/endorser if the debtor refuses to pay at maturity (French Commercial Code art. L. 511-38). Debtor insolvency is not required. Non-payment is enough.

A key decision makes this crystal clear. A court of appeal tried to limit a bank’s recourse against the supplier by saying it would only exist if the buyer failed to pay due to insolvency. The French Supreme Court overturned that: after maturity, the holder can pursue endorsers and the drawer solely because the bill was unpaid (Cass. com. 15 July 1992, n° 90-18430).

If you’re a supplier reading this: the instrument is not only “your right”—it’s also potentially your liability once you circulate it. That’s why drafting and risk control matter.

5. The personal guarantee that looks like a surety, but isn’t: “aval”

In French practice, payment of a bill or promissory note is often reinforced by a personal signature guaranteeing payment—commonly a director or manager. This guarantee is called aval, and creditors love it because it can provide a solvent target if the company doesn’t pay.

From a collection standpoint, aval can be decisive. But it comes with two “gotchas”:

First, aval is governed by negotiable instrument law, not ordinary surety law

An aval giver is generally liable “in the same way” as the person whose obligation is guaranteed (French Commercial Code art. L. 511-21). Courts treat aval as a negotiable-instrument undertaking with its own regime. That means many protective rules that apply to ordinary sureties do not apply.

The French Supreme Court has emphasized that aval is not subject to the standard surety-protection rules and cannot be attacked using surety-law arguments (Cass. com. 5 Apr. 2023, n° 21-17319; Cass. com. 2 May 2024, n° 22-19408). For example, annual information duties imposed on professional creditors toward sureties do not benefit aval givers (Cass. com. 16 June 2009, n° 08-14532). And discharge rules based on subrogation issues for sureties do not automatically apply to aval (Cass. com. 9 Oct. 2024, n° 22-14743).

For creditors, the practical meaning is simple: aval can be a cleaner, tougher guarantee than a typical suretyship—if it is properly executed.

Second, wording and signature placement can make or break personal liability

Courts pay close attention to whether a director signed personally or only in a corporate capacity. Some signatures will bind the individual; others won’t.

• A director’s signature under a clear “good for guarantee” style statement can bind personally (Cass. com. 13 Sept. 2011, n° 10-20504).

• Conversely, wording that clearly indicates signing “as manager” can prevent personal liability (Cass. com. 9 Feb. 2016, n° 14-10846; Cass. com. 17 Feb. 2021, n° 19-15246).

• Courts may also refuse to treat a manager as personally bound where the company stamp and signature appear in a way that points to corporate capacity rather than a separate personal commitment (Cass. com. 23 Oct. 2024, n° 22-22215).

If your recovery plan depends on pursuing a director personally, the signature mechanics are not a minor detail—they are the case.

6. Timing is everything: present on time, preserve your rights, and don’t lose leverage

Negotiable instrument law rewards speed and punishes delay.

For bills of exchange payable on a fixed date (or based on time after date/sight), the holder must present the bill for payment at maturity or within the short statutory window (French Commercial Code art. L. 511-26). If the holder misses key steps—especially the formal non-payment record when required—recourse rights against certain liable parties can be lost.

When payment is refused, the formal record (commonly made by a judicial enforcement officer) is governed by strict timing rules (French Commercial Code art. L. 511-39). Courts also take defects seriously: if the non-payment record is drawn up incorrectly (for example, because it was requested in an improper way), that irregularity can invalidate the step (Cass. com. 2 Mar. 2010, n° 09-10723).

There are exceptions and nuances—for example, a late formal record may not necessarily deprive the drawer of recourse against an accepting debtor (Cass. com. 11 Mar. 2003, n° 00-19548)—but creditors should not plan their recovery strategy around exceptions.

The practical takeaway is that process discipline is leverage. If you treat these instruments casually, you can lose exactly what makes them valuable.

7. Faster protective tools: conservatory measures can be easier with these instruments

For creditors, one of the most useful features of an accepted bill of exchange or a promissory note is that it can open the door to protective measures more easily than an ordinary invoice claim.

French enforcement law allows conservatory measures in certain conditions based on accepted bills or promissory notes (French Code of Civil Enforcement Procedures art. L. 511-2, and French Commercial Code art. L. 511-51). Courts have still required that the risk to collection be real; using conservatory measures without a credible threat can create liability exposure for the enforcement professional (Cass. civ. 1re, 12 May 2011, n° 10-15700).

For a creditor facing an evasive debtor, asset dissipation risk, or sudden insolvency signals, this can be a key strategic advantage—especially when the instrument is clean and the file is well-built.