What the five-year limitation period (article L.110-4) means for your purchasing
A billing discrepancy does not disappear when the financial year is closed. Between businesses, you have five years to claim it. You still have to be able to prove it.
What the text says
Article L.110-4 of the French Commercial Code sets a five-year limitation period for obligations arising from trade between traders, or between traders and non-traders, unless a shorter special period applies. A sum overbilled by a supplier falls within this framework: it can be claimed throughout the period. For a company buying under framework agreements, the invoices of the last five years therefore remain, in principle, open to review. Beyond that, the supplier can invoke the limitation period.
The period does not start at the signature of the contract but on the day the right holder knew, or should have known, the facts that allow them to act. For overbilling, the debate is between the invoice date and the date on which the discrepancy could have been noticed. The prudent approach is to retain the first, which is less favourable: every month that passes then removes one month of invoices from the recoverable scope.
What stops the clock, what shortens it
The French Civil Code provides three main mechanisms. If the supplier acknowledges the discrepancy in writing (article 2240), a new five-year period starts. A court claim (article 2241) interrupts the period, even when brought before a court without jurisdiction. Entering mediation or conciliation (article 2238) suspends it for the duration of the procedure.
A letter or an email of complaint does not, on its own, interrupt the limitation period. It documents the approach and opens the discussion, but it does not remove the need to watch the deadline of the oldest invoices.
The parties can also adjust the period by agreement (article 2254), without cutting it below one year or extending it beyond ten. More often, it is the general terms of sale that impose a very short complaint period, sometimes thirty days. Before any step, you need to read the framework agreement, its amendments and the applicable terms: the validity of such a clause is discussed case by case, in particular with regard to the balance of the contract.
Why every month counts
Most controls cover the current financial year. Yet a recurring discrepancy, a discount that is not applied or shipping charged despite a free-shipping threshold, repeats on every invoice, often for years. Going back five years therefore multiplies the scope reviewed. The mechanisms involved are detailed in the article on discounts, tiers and year-end rebates.
The recoverable period is rolling. With a constant 1% discrepancy on €50M of annual purchases, waiting twelve months means giving up about €500,000 of invoices that are recoverable today.
| If you act | Recoverable years | Estimated amount |
|---|---|---|
| Today | 5 | €2.5M |
| In a year | 5 (including 1 new) | €2.5M (€500k lost) |
| Each year of waiting | 1 old year less | €500k less |
The calculation assumes a stable discrepancy. Its main purpose is to show that the cost of waiting can be measured.
Gather the evidence, then act in order
A discrepancy can only be recovered if it is documented. You need the signed framework agreements with all their amendments, the tariff grids and their effective dates, the invoices and credit notes of the period, and the exchanges that changed the terms (letters, minutes of negotiation). Each discrepancy is then tied to a precise clause and to an invoice line: that link is what makes the claim hard for the supplier to dispute.
Negotiation is won at signature. Margin is played out line by line.
- Define the scope: which framework agreements, which suppliers, which period. Start with the suppliers that matter most in volume.
- Collect the documents in their original formats.
- Match each line to the contract in force on its date, since a single item may have changed price several times in five years.
- Quantify each discrepancy, prove it, then consolidate by supplier.
- Claim, starting with the oldest invoices, which expire first.
A few mistakes come up again and again: waiting until everything has been analysed before claiming on the oldest invoices, reviewing only the current financial year, claiming without evidence, or forgetting the credit notes already issued, which may have corrected part of the discrepancy.
Frequently asked questions
Is overbilling older than five years lost for good?
As a general rule, a claim to recover money paid in excess is time-barred after five years. Beyond that, the supplier can invoke the limitation period. Grounds for interruption or suspension exist, but they are assessed case by case: have your lawyer review them.
Do we need to act before the end of the financial year?
No, closing the accounts does not extinguish the claim. The period runs independently of the accounting. However, the longer you wait, the more of the oldest invoices fall outside the recoverable period.
Do credit notes and earlier corrections change the calculation?
Yes: a discrepancy already corrected by a credit note must not be claimed a second time. That is why the reconciliation has to cover both the invoices and the credit notes of the period.
Who is concerned: only traders?
Article L.110-4 covers obligations between traders, or between traders and non-traders. A purchase between two commercial companies therefore falls, in principle, under this five-year period. Your specific situation still needs to be checked with your lawyer.
Key points
- Between traders, overbilling can be claimed for five years.
- The period is rolling: every month of waiting removes invoices from the scope.
- A simple complaint does not, on its own, interrupt the limitation period.
- Without contracts, amendments and invoices matched line by line, there is no recovery.
References: French Commercial Code, article L.110-4. French Civil Code, articles 2224, 2238, 2240, 2241 and 2254.
This article is provided for information only and does not constitute legal advice.
