HIDDEN DEFECTS – The French Supreme Court qualifies as a limitation period the two-year period within which an action for warranty of hidden defects shall be brought, and sets a time limit of 20 years from the date of the sale

In four long-awaited decisions dated July 21, 2023[1], the French Supreme Court (Cour de cassation) gave a unified response to two questions that had been the subject of debate between its chambers, concerning the qualification of the two-year time limit under Article 1648 of the French Civil Code for bringing an action under warranty for hidden defects, and the time limit within which such an action may be brought.

As a reminder, the first paragraph of Article 1648 of the French Civil Code states that:

“The action resulting from hidden defects shall be brought by the purchaser within two years of discovery of the defect (…)“.

As you will have noticed, this paragraph does not qualify the legal nature of the two-year period allowed to the purchaser to bring an action in warranty for hidden defects.

As a consequence, the silence of this paragraph led the first civil chamber and the commercial chamber of the French Supreme Court to qualify it as a prescription period that could be suspended, while the third civil chamber of the French Supreme Court considered that it was a foreclosure period that could not be suspended.

The position of the French Supreme Court was therefore eagerly awaited, and it is through four cases that it came to unify the existing case-law solutions.

• Qualification of the two-year time limit (case n°21-15.809)

In the first case submitted to the French Supreme Court, a producer of long-life food products for professional use, sourcing packaging pouches from a supplier, applied to the competent court for an expert’s legal report due to abnormal swelling leading to the deterioration of certain pouches. Once the expert legal report had been issued, the producer sued his supplier for damages. The supplier then argued that the two-year limitation period under Article 1648 of the French Civil Code could not be suspended by a legal expert report claim.

It was in this context that the French Supreme Court specified that Article 1648 of the French Civil Code has not specifically qualified the time limit granted by the first paragraph to the buyer to act in warranty against the seller and then noted that this time limit had sometimes been qualified as a foreclosure time limit and sometimes as a prescription time limit, so that the requirements of legal certainty make it necessary to adopt a single solution.

The search for this unified solution led the French Supreme Court to look for the legislator’s will.

On the one hand, the French Supreme Court points out that the reports accompanying ordinance n°2005-136 of February 17, 2005[2] , which replaced the short limitation period of Article 1648 of the French Civil Code with a two-year period running from the discovery of the defect, as well as its ratification bill, mention the existence of a limitation period.

On the other hand, it recalls that the goal pursued by the legislator is to enable any buyer, whether a consumer or not, to benefit from reparation in kind, a price reduction or its restitution when the thing is affected by a hidden defect, the buyer must be able to take action against the seller within a period which may be interrupted or suspended.  

Consequently, the French Supreme Court deduced from the above that the two-year limitation period from Article 1648 of the French Civil Code is a limitation period that can be suspended when the judge grants a request for an investigative measure such as a legal expert report.

• Twenty-year time limit (cases n°21-17.789, n°21-19.936, and n°20-10.763)

The three other cases submitted to the French Supreme Court were about the relationship between the two-year time limit for bringing an action under warranty for hidden defects and the five-year limitation period under Article L.110-4 of the French Commercial Code.  

In these three cases, the defendants argued that the plaintiffs’ action was time-barred, in that the two-year limitation period of Article 1648 of the French Civil Code was, in their view, locked into the five-year limitation period of Article L.110-4 of the French Commercial Code. The defendants therefore argued that the double time limit for bringing an action had been established by case-law up to that point, since, as a reminder:

• In civil sales, prior to the entry into force of the law of June 17, 2008 on prescription in civil matters[3] , case-law held that the two-year time limit for an action under warranty for hidden defects was enclosed within the ordinary law time limit of Article 2262 of the French Civil Code, which provides for an extinctive prescription period of thirty years.

With effect from the entry into force of the aforementioned law, the new Article 2224 of the French Civil Code has reduced the duration of the ordinary law prescription period to five years, giving it a sliding starting point: the day when the holder of a right knew or should have known the facts enabling him to exercise it.

• In the case of commercial or mixed sales, Article L.110-4 of the French Commercial Code initially provided for a ten-year limitation period, then the law of June 17, 2008 reduced this period to five years to bring it into line with Article 2224 of the French Civil Code, without however specifying the starting point. The case-law has therefore clarified this starting point, considering that it can only result from the general law of Article 2224 of the French Civil Code, and start from the day the right arises.  

The French Supreme Court therefore ruled that the sliding starting point of the extinctive prescription period under articles 2224 of the French Civil Code and L.110-4 of the French Commercial Code should be merged with the starting point of the two-year period for bringing an action under the warranty for hidden defects, i.e. the discovery of the defect, and concluded that the extinctive prescription periods under Articles 2224 of the French Civil Code and L.110-4, I, of the French Commercial Code shall no longer be analyzed as special time limits for bringing an action under the warranty for hidden defects.

In view of the above,  the French Supreme Court has specified that the action for warranty of hidden defects is subject to a time limit of twenty years from the date of sale.

Finally, the French Supreme Court has ruled on the calculation of the twenty-year time limit when the sale was concluded before June 19, 2008, the date on which the law of June 17, 2008 came into force, and has specified that, in such a situation, the transitional provisions set out in Article 26 of the aforementioned law, reproduced in Article 2222 of the French Civil Code, will apply. In other words:

• In civil sales, the twenty-year period applies from the date of entry into force of the law of June 17, 2008, i.e. June 19, 2008, without its total duration exceeding the thirty-year period provided for by the former Article 2262 of the French Civil Code and which would have begun to run prior to the entry into force of this law;

• In the case of commercial or mixed sales, the twenty-year period applies if the former ten-year limitation period under Article L.110-4 of the French Commercial Code had not expired by June 19, 2008.

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[1]      n°21-15.809, n°21-17.789, n°21-19.936, and n°20-10.763.

[2]      Ordinance n°2005-136 of February 17, 2005 relating to the guarantee of conformity of the goods to the contract owed by the seller to the consumer.

[3]      Law n°2008-561 of June 17, 2008 reforming the statute of limitation in civil matters.