Legal actions between merchants are subject to the five-year time limit set forth by Article L.110-4 of the French code of commerce, pursuant to which « the obligations arising from their commerce between merchants or between merchants and non-merchants are time barred by five years if they are not subject to shorter special time limits”.
Despite the reservation relating to “shorter special prescriptions”, it is agreed that the legal guarantee against hidden defects is subject to a double time limit: the buyer’s action must be brought within two years of the discovery of the hidden defect, pursuant to article 1648 of the French civil code, and within the period of 5 years of the aforementioned article L.110-4.
Hence the following question: what is the starting point of this five-year time limit?
Seemingly simple, the question nevertheless receives contradictory answers in legal doctrine and in case law.
For those who consider that in matters of commerce speed must be favored, the starting point should be set at the date on which the sale 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 triggered, for example until the date of first entry into service when the sale is on a vehicle.
The question of the starting point of the limitation period finds a particular echo in the presence of contracts in which the delivery is “deferred”, sometimes of several years, because the thing sold is a “complex” good.
In these cases, it happens that the buyer is not put in possession of the thing he acquired until years after signing the contract and it takes several more for the hidden defect to be revealed.
If the starting point of the limitation period is the date of signature of the sales contract, the buyer risks being deprived of any possibility of acting 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 was able to actually experience the operation of the thing, this same guarantee may be exercised.
Such dilemma was recently submitted to the Commercial court of Paris in a case involving the supply of wind turbines, the blades of which were found to be defective more than five years after the signing of the supply contracts but less than five years after their reception and commissioning.
By judgment of March 5, 2021, the court « as the starting date of the 5-year period provided for by 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 the signature of the contract, nor the date of delivery on site of the sub-assemblies before assembly on site could be retained » because, otherwise, that « would amount to depriving the buyer of a significant part of the period during which he can bring an action against his supplier since, until the day of receipt, he cannot yet verify the correct functioning of the machine purchased ”.
It is now the turn of the Court of appeal of Paris to rule the case, before it is, perhaps, handed over to the French High Court in order to confirm or invalidate the interpretation of article L.110-4 of the French code of commerce which was just made.