Alteration and Waiver of the Statute of Limitations Under French Law: France

The statute of limitations is a specific time frame that creates ("prescription acquisitive") or extinguish ("prescription extinctive") an obligation or a right when it expires. For example, a party to a contract shall no longer be liable for the non-performance of its contractual obligations after five years if no legal action has been brought against it in relation to these obligations. The statute of limitations is not be confused with another limitation period called "délai de forclusion", which is the loss of the right to bring legal action. It only concerns the legal action itself, not the cause of action. This loss is a civil sanction for failure to accomplish a formality within the legally prescribed period. For example, if a party did not appeal against a ruling within the legally prescribed period, the ruling shall become definitive and the party shall be deprived of its right to appeal. This quick overview will not address this particular issue.

Possibility to waive the statute of limitations

The ability of parties to waive the statute of limitations exists but is limited and depends on the time at which the waiver is made. 1. Waiver in advance Can a party waive the statute of limitations in advance? Article 2250 of the FCC provides that only an expired statute of limitations can be waived. But does it mean that it is only possible to waive the benefit of a statute of limitations when it has been totally expired (i.e. when it is entirely elapsed)? Or is it possible to waive a statute of limitations that has started to run (i.e. the time that has been elapsed from the starting point of the statute of limitations, even if it is not totally expired)?

• Renouncement in advance stricto sensu

Article 2250 is clear: It is only possible to waive a statute of limitations that is already elapsed. Thus, any waiver in advance would be null. A contractual provision may not provide for the waiver of a statute of limitations in advance.

• Waiver to a statute of limitations that has started to run

It is also prohibited to waive a statute of limitations in progress for in its entirety (i.e. the part of the statute of limitations that has already elapsed and the remaining period). Nevertheless, it is still allowed to waive the part of the statute of limitations that has already elapsed. By doing so, a party would waive the benefit of the elapsed time but his/her/its future right would remain unaffected. The statute of limitations would start running again from this waiver. 2. Waiver to the statute of limitations a posteriori Once the statute of limitations has totally elapsed, the statute of limitations expires. Consequently, it is absolutely possible to waive the benefit thereof. For example, a party could appear before a court knowing that the statute of limitations has expired and that he/she/it is no longer bound by any obligation. Or a party could sign an amendment to a contract providing that he/she/it waives the benefit of the statute of limitations and that it is consequently still possible to sue him/her/it.

Possibility to alter the statute of limitations

The alteration should be viewed as an extension or a reduction of the statute of limitations. Since the 2008 reform, it is possible to alter the statute of limitations both ways. But it is also possible to contractually agree on grounds for suspension of the statute of limitations, in addition to the ones provide for by law. 1. Scope of the contractual freedom The first paragraph of article 2254 of the FCC expressly allows parties to alter the duration of the statute of limitations. It stipulates as follows: "The duration of the statute of limitations can be shortened or extended by agreement between the parties". However, some contracts are legally excluded from the scope of contractual freedom, and even when the alteration of the statute of limitations is authorized, this freedom is limited.

• Excluded contracts

Article 2254(3) of the FCC expressly forbids any contractual alteration of the statute of limitations in specific matters such as claims for the payment of wages, alimonies, rents, service charges and more generally everything that is payable by year or by shorter periodical term. Furthermore, Articles from other French codes forbid alteration for certain types of contracts and legal actions: Contracts between a professional and a consumer (Article L. 137-1 of the French Consumer Code), insurance contracts (Article L. 114-3 of the French Insurance Code), legal actions for damages for discrimination at work (Article L. 1134-5 of the French Labor Code). The legislator intended to protect parties that are deemed "weak" in the context of pre-formulated standard contracts (i.e. non-negotiated contracts).

• Asymmetrical provision

Can the parties agree on a provision that would provide for a different statute of limitations for each party? Nothing seems to forbid this possibility. Apart from contracts entered into with a party considered as weak (e.g. consumer contracts), contractual freedom should prevail.

• Contractual liability or non-contractual liability?

It is possible to alter statutes of limitation concerning contractual liability, but what about non-contractual liability? Unfortunately, Article 2254 of the FCC does not provide any answer to this issue. Case-law should provide an answer, but, at the moment, we are still waiting for a clarification on this point.

• Restrictions to contractual freedom

Article 2254(1) of the FCC is very clear: It confines the freedom of the parties between two boundaries: the statute of limitations cannot be reduced to less than one year or extended to more than ten years.

• Sanction

The law remains silent regarding the applicable sanction wherever a provision goes beyond the limits stated above. However, courts are likely to consider that those limits are imperative. Therefore, such provision would probably be held invalid. But what would it mean exactly? That the provision should be amended in such a way that the statute of limitations be reduced or extended only up to the aforementioned limits? Or should the provision be deemed unwritten (i.e. void) and the legal statute of limitations applied? No legal text grants the judge the power to reduce or extend the statute of limitations provided for under a contractual provision. Consequently, the provision would likely be deemed null and void and the legal statute of limitations applied (in this respect, a ruling of the Court of Appeal of Montpellier declared null and void a provision reducing the statute of limitations to three months: Court of Appeal of Montpellier, January 29th, 2013, n°12/1949). 2. Different ways to alter the statute of limitations Providing for a precise contractual statute of limitations is the simplest way to proceed, but there are other possibilities offered to parties.

• Adding grounds for suspension of the statute of limitations

Article 2254(1) of the FCC allows parties to add contractual ground for suspension or interruption of the statute of limitations, but not to exclude those provided by the law. It is a significant possibility that the legislator has granted the parties. Adding such grounds will automatically suspend or interrupt the running of time, without any further action by the parties (such as an amendment to the contract). Suspending the running of time allows slowing down the statute of limitations, but interrupting it means that the time that has run is not taken into account and the limitations period will start running anew on the last day of the interruption! By doing so, the parties can make the statute of limitations last much longer, to the extent provided under Article 2232 of the FCC.

• Modifying the starting point of the statute of limitations?

The law does not expressly address this possibility. If the parties had the power to change the starting point of the statute of limitations, they could, in practice, extend it far beyond ten years. It seems that nothing stands against this possibility. Subject to the position that French courts will adopt on this issue, a provision modifying the starting point of the statute of limitations may be valid. A hint in favour of this solution may be found in the FCC. Article 2254 of the FCC allows parties to add grounds for suspension of the statute of limitations, and, in the same Section (book III, title XX, chapter III, section 2), the FCC addresses both grounds for suspension of the running time and grounds for postponement of the starting point of the statute of limitations. However, Article 2232 of the FCC sets a maximum limit for statutes of limitations. The postponement of the starting point, the suspension or the interruption of the statute of limitations (it is not clarified if those actions may be contractually agreed upon between the parties) may not result in the statute of limitations being extended beyond twenty years from the day on which the holder of a right became aware or should have become aware of the facts allowing him/her to exercise such right.

Conclusion

Parties have many possibilities to alter or waive the statute of limitations, but, as the 2008 reform has not yet given rise to many court decisions on the issues at stake, the scope of the contractual freedom is not clear enough. Although the bounds laid down by Article 2254 of the FCC may seem clear, we are still waiting for case law to clarify and precise some points.

Additional resources

• "Le nouveau régime de la prescription et la procédure civile" (loi n° 2008-651 du 17 juin 2008), Colloque à la Cour de cassation du 11 mai 2009 ; Natalie FRICERO Professeure à l'Université de Nice Sophia-Antipolis, Directrice de l'Institut d'Etudes Judiciaires de la faculté de droit: https://www.courdecassation.fr/IMG/intervention%20de%20Mme%20Fricero.pdf

• « Loi n° 2008-561 du 17 juin 2008 portant réforme de la prescription en matière civile »: https://www.legifrance.gouv.f/affichTexte.do?cidTexte=JORFTEXT000019013696&dateTexte=&categorieLien=id

• « DGCCRF – Délais de prescription »: http://www.economie.gouv.fr/dgccrf/Publications/Vie-pratique/Fiches-pratiques/Delais-de-prescription

• « La réforme de la prescription », Cabinet WILHELM et Associés: http://www.wilhelmassocies.com/La-reforme-de-la-prescription_a387.html

• « Réforme de la prescription en matière civile : les conséquences en droit du travail »: http://www.wk-ce.fr/actualites/detail/4428/reforme-de-la-prescription-en-matiere-civile-les-consequences-en-droit-du-travail.html