Nullity of the guarantor’s security: the issuance of annual information is not a commencement of performance.

June 20th 2015

(Cass. Com., April 8, 2015, no. 13-14.447)

Upon being summoned to make payment by a credit institution, the joint guarantor of a loan granted to a failing company asserted the nullity of its commitment.

The bank upheld the invalidity of such an exception, which could very well be asserted only to counter the request for performance of a legal deed which has not yet been performed.

The bank therefore alleged that the issuance of annual information to the guarantor did constitute a commencement of performance of the deed of guarantee.

The Cour de cassation provides its response that the sole issuance of the annual obligation of information to the guarantor is merely a legal obligation sanctioned by the deprivation of the right to the accessories of the receivable and not a consideration of the guarantor’s obligation, as the latter does not constitute the commencement of performance of the deed of guarantee; therefore the plea for the nullity is perfectly admissible.

Julien Combier