Starting point for the five-year limitation period applicable to the legal guarantee against hidden defects: the bombshell dropped by the Paris Commercial Court

Actions between traders are subject to the five-year limitation period of Article L.110-4 of the Commercial Code, according to which "obligations arising from trade between traders or between traders and non-traders are subject to a five-year limitation period if they are not subject to shorter special limitation periods" .

Despite the reservation regarding "shorter special prescription periods" , it is accepted that the legal guarantee against hidden defects is subject to a double prescription: the buyer's action must be brought within two years of the discovery of the hidden defect, according to Article 1648 of the Civil Code, and within the 5-year period of the aforementioned Article L.110-4.

Hence the following question: what is the starting point of this five-year limitation period?

Although seemingly simple, the question receives contradictory answers in legal doctrine and jurisprudence.

For those who believe that speed is paramount in business, the starting point should be set at the date on which the sales contract becomes perfect, at the risk of depriving the buyer of any guarantee when the hidden defect is discovered more than five years later.

For others, the starting point should be delayed until the date on which the warranty can actually be exercised, for example until the date of first registration when the sale relates to a vehicle.

The question of the starting point of the prescription finds a particular resonance in the presence of contracts in which delivery is "deferred", sometimes by several years, because the thing sold is a "complex" good.

In these circumstances, it sometimes happens that the buyer is not put in possession of the thing he acquired until years after the signing of the contract and that it takes several more years for the hidden defect to be revealed.

• If the starting point for the limitation period is the date of signature of the sales contract, the buyer risks finding themselves without any possibility of taking action on the grounds of the legal guarantee against hidden defects.
• If, on the contrary, the starting point is delayed until the date on which the purchaser has been able to actually test the operation of the thing, this same guarantee may be exercised.

This dilemma was recently submitted to the Paris Commercial Court in a case concerning the supply of wind turbines, whose blades were found to be defective more than five years after the signing of the supply contracts but less than five years after their acceptance and commissioning.

By judgment of March 5, 2021, the commercial judges held "as the starting date of the 5-year period provided for in Article L.110-4 of the Commercial Code, the date of receipt" on the grounds that in the presence of a "complex" machine such as a wind turbine "neither the date of signature of the contract, nor the date of delivery on site of the sub-assemblies before assembly on site can be retained" because, otherwise, this "would amount to depriving the buyer of a significant part of the period during which he can exercise a remedy against his supplier since, until the day of receipt, he cannot yet verify the proper functioning of the machine purchased" .

It is now the turn of the Paris Court of Appeal to take up the matter, before, perhaps, the Court of Cassation itself is seized in order to confirm or refute the interpretation that has just been made of article L.110-4 of the commercial code.