Discussion and division benefit in France: a comprehensive guide by a lawyer
Discover the benefits of discussion and division: definition, application, differences, differences, concrete examples, model clauses, FAQs and legal advice for business leaders. An exhaustive, clear and SEO-optimized article for entrepreneurs and SME managers.
Introduction: Anticipating bond risks
Bonding is a frequent guarantee in business relationships, especially for managers of SMEs who are required to act as guarantors for their company. Understanding the mechanisms of the benefit of discussion and the benefit of division is essential to protect your personal assets and better negotiate your commitments.
Essential definitions
What is discussion benefit?
The benefit of discussion is the right for the surety to require the creditor to require the creditor to sue the principal debtor first, before demanding performance from the surety.
Concrete example: A manager takes a simple guarantor for a loan taken out by his company. If the company does not honor the debt, the creditor must first seize the company's assets, and only then, in case of inadequacy, seek the bond.
What is division profit?
The division benefit allows the guarantor to request that his portion of debt be divided with the other guarantees of the same commitment.
Concrete example: If three guarantees guarantee €90,000, each can only be sued up to €30,000 under this benefit.
Legal foundations in the Civil Code
The legal basis for the benefit of discussion
This benefit is provided for in article 2305 of the Civil Code. It requires the creditor to sue the main debtor first for the payment of the debt.
The legal basis for division benefit
It comes from article 2306 of the Civil Code. It requires the creditor to divide his proceedings between all solvent guarantees.
Benefit of discussion: modalities and effects
How do you invoke it?
The guarantor must invoke this benefit in court from the first prosecution. It must designate concrete assets of the main debtor to be seized.
Limits and exceptions
The benefit of discussion is inapplicable if the bond has expressly waived it, if it is a joint and several bond, or if it is a judicial bond.
Divisional profit: modalities and effects
Application modalities
If several guarantees exist, the creditor must share the amount of the debt. The calculation is based on the portion of each deposit.
Case law example
Three managers pledge bonds for €150,000. If each has signed for €50,000, the creditor will not be able to demand more than this sum from each of them, even if one of the three becomes insolvent later.
Differences between discussion benefit and division benefit
Simple bond or joint bond: what are the consequences?
Simple deposit
The simple bond benefits from both protections, unless renounced.
Solidarity deposit
The joint bond renounces both benefits upon signature. The creditor can then sue any joint and several guarantors for the entire debt, without any limit or prior obligation.
Examples of bond clauses
Example of a clause with benefit of discussion:
“This bond is established with the benefit of discussion in accordance with article 2305 of the Civil Code. The creditor must exercise all remedies against the main debtor before acting against the guarantor.”
Example of a waiver clause:
“The guarantor expressly declares to renounce the benefits of discussion and division, in accordance with article 2308 of the Civil Code. The creditor may require full payment of the sum due directly from the guarantor.”
Waiving the benefits of discussion and division: challenges and advice
The renunciation of these benefits is often reflected in actions. It should be clear and express. It is essential to have the act reviewed by a lawyer to assess the risks.
Practical applications and case law
- If a manager designates specific assets of the debtor company, the creditor will have to sue over them before turning against the bond.
- If several bonds exist, the payment must be divided, and the creditor cannot reconsider its division if one of the guarantees becomes insolvent after the fact.
FAQ — All practical answers
What is discussion benefit?
The right for the surety to require the creditor to sue the principal debtor first.
What is the difference between discussion and division benefits?
The benefit of discussion protects against acting too quickly against the bond; the benefit of division limits the amount to be claimed from each surety.
What is a joint bond without the benefit of division or discussion?
It is a guarantor that accepts that the creditor acts against it for the entire debt, without prior action or debt sharing.
What is the difference between a simple bond and a joint bond?
The simple bond benefits from both protections; the joint bond renounces them.
Item division profit: where to find it?
In article 2306 of the Civil Code.
Benefit of discussion Civil Code: where to find it?
In article 2305 of the Civil Code.
How do you forego these benefits?
By an express clause in the bond act.
Solidarity bond: benefits of discussion and division?
The joint bond always renounces it.
Conclusion: lawyer advice
Surety remains a delicate and potentially risky act for a manager. You should always anticipate the presence or renunciation of these benefits, and seek legal advice for each signature or negotiation.
Regulated matter: a lawyer's opinion is essential to secure your position and anticipate all the risks associated with a bond.
Article written by Guillaume Leclerc, lawyer in commercial contracts and commercial litigation in Paris.
