Validity of the Guarantee: The Importance of the Handwritten Note

In a recent ruling on April 5, 2023, the Court of Cassation reiterated the importance of the verbatim reproduction of the handwritten mention appearing in Article L. 341-2 (former) of the Consumer Code for the validity of the act.

In this case, the issue was quite classic, as it involved a securitization fund suing a guarantor who claimed their guarantee was void due to errors in the handwritten statement required by Article L. 341-2 of the Consumer Code.

Indeed, the Court of Cassation's ruling shows that the handwritten note reproduced by the guarantor in the guarantee agreement indicated that they were committing to repay the lender the sums owed «from [their] income or [their] assets» and not from their income and assets.

The Paris Court of Appeal ruled that this error did not alter the meaning or scope of the guarantor's commitment in any way, so her guarantee was valid and ordered her to pay the sum of €41,750 plus interest. The Court of Cassation will overturn the appellate court's decision and rule that, on the contrary, this error modified the meaning and scope of the guarantor's commitment, rendering the guarantor's commitment null and void.

Consequently, ruling without referral, the Court of Cassation annulled the guarantee agreement and dismissed the securitization fund's claims in their entirety, since, due to the annulment of the guarantee, the guarantor no longer owed it any sum.

This ruling once again illustrates the importance of the handwritten note and the interest for the guarantor to study it carefully and to seek assistance in case of litigation.

However, it will be recalled that the new Article 2297 of the Civil Code, applicable to all guarantees concluded as of January 1, 2022, has significantly simplified the requirements concerning the mention to be made by the guarantor. Nevertheless, as this article does not apply to acts prior to January 1, 2022, this litigation regarding the handwritten mention is far from over.