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[France] NEW REGULATIONS APPLICABLE TO TERMS AND CONDITIONS

[France] NEW REGULATIONS APPLICABLE TO TERMS AND CONDITIONS

Law n°2012-387 of March 22nd 2012 on the simplification of the law and the reduction of administrative formalities has introduced modifications to the regulations applicable to the drafting of terms and conditions. Such law transposes European directive 2011/7/EU of February 16th 2011 on combating late payments in commercial transactions.

These new regulations have been codified in articles L.441-3 and L.441-6 of the French Commercial Code. They shall come into force on January 1st 2013.

Terms and conditions shall indicate the amount of the lump indemnity due to the creditor for collection fees, regardless of the importance of the damage actually suffered, should the payment intervene after the due date specified in the invoice. The absence of such mention shall be punished by a 15,000-euro fine.
The implementing decree of October 2nd 2012 has specified a 40-euro amount for such lump indemnity. However, should the collection fees exceed such amount, the creditor may provide justifications in order to obtain additional indemnification.

Invoices must also specify the amount of such lump indemnity and the applicable late penalty rate. The absence of any of these mentions may be punished by a fine in an amount of 75,000 euros, which may be raised up to 50% of the total sum that has been or should have been charged.

Regulation