Dailly assignment (Art. L. 313-23 CMF): mobilising a business receivable and securing the assignee's ranking

Mobilising business receivables remains, for a credit institution, the fastest way of financing an operating cycle without waiting for a security interest to be created. It is also the one whose legal certainty deteriorates fastest when the assignor enters a zone of turbulence. An irregular assignment slip, a notification deferred for commercial reasons, a receivable whose triggering event falls after the opening judgment: three situations that turn an assignee that owns the receivables into an unsecured creditor. This guide covers the complete mechanics of the Dailly assignment, from the drafting of the assignment slip to the defences the assigned debtor may raise, and then deals with the two trade-offs that really determine the lender's ranking: whether or not to notify, and at what point to act before collective insolvency proceedings are opened against the assignor.

The scope of Article L. 313-23 of the Monetary and Financial Code: three cumulative conditions

The assignment of business receivables established by Law No. 81-1 of 2 January 1981, known as the Dailly Law, now codified in Articles L. 313-23 to L. 313-34 of the French Monetary and Financial Code (code monétaire et financier, CMF), is available only in a precise configuration. Three conditions apply cumulatively.

First, the status of the assignee. The beneficiary of the assignment slip (bordereau) must be a credit institution, a financing company or one of the alternative investment funds exhaustively designated by Article L. 313-23 of the CMF. An unlicensed lender, a parent company financing its subsidiary or a debt fund that does not fall within these categories cannot use this vehicle. For them, the route is now that of the assignment of a receivable by way of security under the general law, introduced in Articles 2373 et seq. of the French Civil Code by Ordinance No. 2021-1192 of 15 September 2021 reforming the law of security interests, or that of the pledge of a receivable under Article 2355 of the French Civil Code.

Next, the status of the assignor. The signatory of the slip must be a legal entity governed by private or public law, or an individual acting in the course of a professional activity. A private individual assigning a personal asset receivable falls outside the scheme.

Finally, the nature of the receivable. Article L. 313-23 of the CMF covers receivables held against a legal entity governed by public or private law, or against an individual acting in the course of a professional activity. The text expressly authorises the assignment of receivables that are not yet due, or even not yet arisen:

Receivables that are liquidated and due, even if payable at a future date, may be assigned or pledged. Receivables arising from an act that has already taken place or is yet to take place, but whose amount and due date are not yet determined, may also be assigned or pledged.

This opening to future receivables is the main attraction of the mechanism for a financier of an operating cycle. It is also its main blind spot in the event of collective insolvency proceedings, as developed below.

The Dailly assignment slip: formalities on pain of requalification

The assignment is effected by the mere delivery of the slip. There is no notarial deed, no entry in a register, and no service on the assigned debtor for the transfer to be enforceable against third parties. This simplicity has a counterpart: sanctioned formalities.

Article L. 313-23 of the CMF requires four particulars, the absence of which deprives the document of its status as an act of assignment or pledge of business receivables:

• the title act of assignment of business receivables or act of pledge of business receivables
• the statement that the act is subject to the provisions of Articles L. 313-23 to L. 313-34 of the French Monetary and Financial Code
• the name or corporate name of the credit institution, the alternative investment fund referred to in the text or the financing company that is the beneficiary
• the designation or individualisation of the receivables assigned, or of the elements making it possible to designate them, in particular by indicating the debtor, the place of payment, the amount of the receivables or their valuation and, where applicable, their due date

To these are added the assignor's signature and, a determining point, the date affixed by the assignee (Article L. 313-25 of the CMF). Article L. 313-23 of the CMF states that a document in which one of the particulars is missing does not count as an act of assignment or pledge of business receivables within the meaning of Articles L. 313-23 to L. 313-34. The text does not declare the act void: it deprives it of the Dailly regime, in particular of enforceability against third parties from the date affixed to the slip and of the transfer as of right of the security interests, guarantees and accessories provided for by Article L. 313-27. The act can then have effect only as an assignment of a receivable under the general law, if it meets the conditions (Articles 1321 et seq. of the French Civil Code), and is enforceable against the assigned debtor only after notification or acknowledgment (Article 1324 of the French Civil Code).

Two practical points deserve attention in drafting mobilisation framework agreements.

Individualisation of the receivables

The designation must make it possible to identify the receivable without recourse to elements external to the slip and its contractually attached annexes. A slip referring to a mere outstanding-balances file that is undated, unsigned and unilaterally modifiable by the assignor weakens the evidence of the scope assigned. Disputes always arise at the same moment: when a creditors' representative (mandataire judiciaire) or a competing factor challenges the base of the assignment. The framework agreement must therefore fix the format of the annex, its mode of transmission and its evidentiary archiving.

The dematerialised slip

Article L. 313-23 of the CMF provides that, where the receivables are transmitted by a computer process making it possible to identify them, the slip may be limited to stating, in addition to the first three particulars, the means by which they are transmitted, their number and their total amount. Dematerialisation does not lighten the formalities: it shifts them onto the traceability of the date, the integrity of the file and the attribution of the signature to the assignor. An institution that has industrialised its Dailly chain must be able to produce, for each slip, an enforceable timestamp. It is this point, and not the content of the particulars, that is disputed in litigation today.

Enforceability and ranking: the date of the slip governs everything

Article L. 313-27 of the CMF governs enforceability in terms that are exceptionally favourable to the assignee:

The assignment or pledge takes effect between the parties and becomes enforceable against third parties on the date affixed to the slip when it is delivered, whatever the date on which the receivables arise, fall due or become payable, without any other formality being required [...]. Delivery of the slip entails as of right the transfer of the security interests, guarantees and accessories attached to each receivable, including mortgage security, and its enforceability against third parties without any other formality being required.

Three operational consequences follow.

First, the date of the slip is the sole ranking criterion. In a conflict between a Dailly assignee and a subrogated factor, the solution adopted by commercial case law is that of the first in time: the date of the slip is compared with that of the subrogation receipt. In a conflict between two successive Dailly assignments of the same invoice, the case of fraudulent double mobilisation by the assignor, the first dated slip prevails, the second assignee having only a claim against the assignor, most often insolvent, and a possible criminal characterisation.

Second, the transfer of accessories operates as of right. A receivable backed by a guarantee, a retention of title clause or a payment guarantee is transferred with those accessories, without additional formality. This is an under-used point in portfolio audits: an assignee that is unaware of a guarantee attached to the assigned receivable de facto gives up a remedy.

Third, enforceability applies whatever the law governing the receivable and wherever the assigned debtor resides, which makes the mechanism usable for export receivables, subject to the conflict-of-laws rules on assignment of receivables.

Two competing claims nevertheless resist the date of the slip. The direct action of the subcontractor, established by Law No. 75-1334 of 31 December 1975 on subcontracting, is traditionally preferred to the Dailly assignment by the contract holder. And the reclamation by the seller under a retention of title clause, exercised under Articles L. 624-9 and L. 624-16 of the French Commercial Code, may absorb the resale price that the assignee thought it had acquired. In trade or construction financing, these two competing claims must be mapped before the outstanding amount is put in place, not discovered at the time of default. The operation of this clause and the conditions for reclamation are set out in our article on the retention of title clause in the face of the customer's collective insolvency proceedings.

To notify or not to notify: the lender's central trade-off

Article L. 313-28 of the CMF gives the assignee a unilateral and permanent right:

The credit institution or the financing company or the AIF referred to in Article L. 313-23 may, at any time, prohibit the debtor of the assigned or pledged receivable from paying the signatory of the slip.

From that notification, the form of which is set by regulation and which requires a written document containing mandatory particulars, the assigned debtor validly discharges its debt only to the assignee. Notification is therefore not a condition of enforceability of the assignment, which already results from the date of the slip. It is a condition of the effectiveness of payment.

Why the unnotified Dailly is the market norm

In the practice of mobilisation lines, the Dailly assignment is very largely unnotified, or more exactly notifiable. The assignor continues to collect its invoices into an account opened with the assignee, and the financing is self-amortising through collections.

The reasons for this practice are well known. Notification of a Dailly assignment sends the assignor's customer a signal of strain on its supplier's cash position. For a company whose order book depends on a few principals, the commercial effect may outweigh the gain in security. It also creates an administrative burden of monitoring payments, matching and disputes, which institutions prefer to leave to the assignor as long as the relationship is sound. Finally, it is sometimes contractually restricted by the underlying commercial contract, where the latter contains a non-assignment clause or an obligation to give prior notice, the scope of which remains a classic source of litigation and must be checked upstream.

What non-notification costs exactly

An unnotified Dailly makes the lender's security rest not on its title, but on the assignor's collection discipline. An unnotified assigned debtor that pays the assignor is validly discharged. The funds then enter the assignor's estate. If the assignor passes them on, the mechanism works. If it does not, the assignee has only a claim for restitution, and not an exclusive right over a sum of money.

That claim for restitution is of very different quality depending on whether the assignor is solvent or not. It becomes almost worthless if insolvency proceedings are opened between collection and onward payment. The argument for reclamation then runs up against the fungibility of money: in the absence of effective individualisation of the funds, for example in a dedicated, contractually locked special-purpose account, reclamation is delicate, and the three-month period from publication of the judgment opening the proceedings, set by Article L. 624-9 of the French Commercial Code, runs quickly.

The notification triggers to be written into the agreement

The trade-off does not consist in choosing once and for all between notification and discretion, but in defining, from the outset of the line, the events that cause a switch from one regime to the other. The mobilisation framework agreement benefits from listing objective and verifiable triggers: delay in onward payment beyond a threshold, deterioration of a financial ratio, declared payment incident, registration of a Treasury or URSSAF (social security collection agency) lien, a significant payment claim, a request for the opening of conciliation or ad hoc mandate proceedings brought to the lender's knowledge, termination of another line by a fellow institution.

The benefit of an objectified trigger clause is twofold. It secures the decision to notify against a complaint of abrupt termination or abusive support, by tying it to a contractually provided fact. And it avoids the opposite reflex, much more frequent, of delaying notification so as not to precipitate default, to the point where it is no longer of any use.

Acceptance by the assigned debtor: purging the defences

Notification imposes a payment circuit. It does not purge the defences. It is acceptance, governed by Article L. 313-29 of the CMF, that achieves this purge.

At the request of the beneficiary of the slip, the debtor may undertake to pay it directly: this undertaking is recorded, on pain of nullity, in a document entitled: "Act of acceptance of the assignment or pledge of a business receivable".

The undertaking is recorded, on pain of nullity, in this document. The effect is powerful: the accepting debtor can no longer raise against the assignee defences based on its personal dealings with the signatory of the slip, unless the institution, in acquiring or receiving the receivable, knowingly acted to the debtor's detriment. The parallel with acceptance of a bill of exchange is intended: the acceptor undertakes autonomously, and fraud is the only way out left to the debtor.

In practice, acceptance is obtained only on receivables of high unit value, typically a works contract, a recurring services receivable against a major account or a receivable against a public entity. Three reflexes are required. Check the authority of the signatory of the act of acceptance, failing which the purge is ineffective. Respect the exact title required by the text, since the sanction is nullity. And do not confuse acceptance with a mere acknowledgment of receipt of the notification, which has no purging effect.

For receivables arising from public contracts, the mechanism is specific: the contract holder obtains an assignability certificate (certificat de cessibilité), under the conditions provided for by the French Public Procurement Code, and notification is addressed to the public accountant responsible for payment (comptable public assignataire). Failure to notify the responsible accountant properly, rather than the purchaser, is the most frequent and most costly error in this category of files.

Defences available to a non-accepting assigned debtor

In the absence of acceptance, the assigned debtor retains against the assignee the defences it could have raised against the assignor. This must be built into the valuation of the base, not discovered at the time of recovery.

Defences arising from the contract itself are fully available: nullity, termination, exception of non-performance, defective workmanship and price reductions, late-delivery penalties, failure to deliver, non-conformity. A slip covering a disputed works progress invoice is worth no more than the receivable actually due.

Set-off follows a more nuanced regime. The courts distinguish according to the date on which the assigned debtor's claim against the assignor arose and according to the existence of a connection. Set-off of connected claims, arising from the same contractual whole, remains very largely enforceable against the assignee, including after notification. For non-connected claims arising after notification, enforceability is on the other hand open to challenge. An institution financing a supplier that has a reciprocal business relationship with its customer, a commonplace situation in the automotive, agri-food or retail sectors, must systematically examine the existence of reciprocal flows before quantifying its mobilisable outstanding amount.

Finally, Article L. 313-27, paragraph 2, of the CMF prohibits the assignor from modifying, without the assignee's consent, the extent of the rights attached to the receivables represented by the slip. This provision is one of the few levers for challenging a credit note, a debt release or a settlement agreement concluded between assignor and assigned debtor to the assignee's detriment.

The assignor's failure: what the assignee loses, and when

The second trade-off turns on timing. The opening of collective insolvency proceedings against the assignor does not call into question a previously dated assignment, but it neutralises several workings of the mechanism.

Future receivables and the triggering event

This is the most significant point of loss. The Dailly assignment of future receivables transfers ownership from the date of the slip. But where the receivables arise from a contract performed in successive instalments or a contract performed over time, commercial case law holds that the assignee can rely only on receivables whose triggering event, that is, the performance of the service, precedes the opening judgment. Receivables arising from services performed after the judgment, in particular in the context of continuation of the contract decided by the court-appointed administrator (administrateur judiciaire), escape the assignee and benefit the financing of the observation period.

The consequence is mechanical: in a financing backed by a multi-year contract, the real base of the assignment shrinks abruptly at the date of the opening judgment. A lender that sizes its outstanding amount on the order book and not on the statements already performed overestimates its cover.

Nullity in the suspect period

Articles L. 632-1 and L. 632-2 of the French Commercial Code expose acts carried out during the suspect period (période suspecte), which runs from the date of cessation of payments. Article L. 632-1, I, 6° strikes down as null as of right any contractual security interest created over the debtor's assets or rights for previously incurred debts, unless it replaces an earlier security of at least equivalent nature and base, and with the exception of the assignment of a receivable provided for in Article L. 313-23 of the French Monetary and Financial Code made in performance of a framework agreement concluded before the date of cessation of payments. Paragraph 4° of the same text also lists Dailly assignment slips among the normal means of payment of debts that have fallen due.

The distinction here is decisive between two uses of the Dailly. An assignment granted in immediate consideration for the making available of funds, in a discounting logic, rests on a concurrent consideration and withstands challenge better. An assignment granted by way of security for credit already extended, to rebuild the cover of a deteriorated line, comes close to a security for a prior debt and becomes open to challenge. Any movement to reinforce guarantees in the weeks preceding a cessation of payments must therefore be analysed from this angle, including where it appears prudent from a risk standpoint. On the more general fate of assignments of receivables granted in the suspect period or in court-supervised reorganisation, see our analysis of assignment of receivables and collective insolvency proceedings.

The assignor's joint and several guarantee and the proof of claim

Article L. 313-24, paragraph 2, of the French Monetary and Financial Code provides that, unless otherwise agreed, the signatory of the slip is jointly and severally liable for payment of the assigned receivables. This recourse against the assignor is a claim that must be filed in the proceedings under Article L. 622-24 of the French Commercial Code, within two months of publication of the opening judgment in the BODACC (French official gazette of civil and commercial announcements), extended to four months for creditors domiciled outside metropolitan France. Omitting this filing, on the ground that the institution regards itself as owner of the assigned receivables, is a recurring error: it deprives the assignee of any recourse for the portion not recovered from the assigned debtors.

The assignee's decision timetable

Three sequences structure the action of an institutional lender.

Before the line is put in place, the question is not the rate but the base. The points to check are the formal regularity of the slip and of the dematerialised chain, the existence of non-assignment clauses or pre-emption agreements in the underlying contracts, the existence of reciprocal flows between assignor and assigned debtors, the presence of declared subcontractors on the contracts financed, and the mode of performance of the contracts, one-off or successive, which determines the exposure to the risk of a later triggering event.

At the first signs of deterioration, the decision concerns notification. The relevant signal is not the balance sheet but the onward-payment behaviour, the appearance of registered liens and the deterioration of payment times. Notification must be prepared technically before it is decided politically: exact details of the assigned debtor or the responsible accountant, regulatory particulars, proof of receipt.

As an amicable or collective procedure approaches, decisions become irreversible. Once the opening judgment has been published, the assignee can only notify for receivables already arisen, stop new outstanding amounts, file its joint and several guarantee claim within the two-month period, monitor decisions on continuation of current contracts, and assess the advisability of reclaiming sums collected and not passed on, within the three-month period.

Conclusion

The Dailly assignment is not a security whose value is established when it is put in place, it is a position whose value deteriorates over time if nothing refreshes it. Two convictions emerge. Non-notification is a commercial choice, not a legal one: it must be paid for by a contractually armed monitoring system, failing which it amounts to exchanging an exclusive right for an unsecured claim. And acceptance within the meaning of Article L. 313-29 of the CMF, too often neglected because it is thought intrusive, remains the only tool that really secures the base by neutralising the assigned debtor's defences.

For a credit institution or a financing company, the recommendation is simple to state and demanding to implement: before any renewal of a line, have audited the formal regularity of your Dailly slips, the one-off or successive nature of the underlying contracts and the contractual notification triggers. It is on these three points, and not on the level of outstanding amounts, that the assignee's fate is decided on the day of the opening judgment.

Frequently asked questions

Is notification of a Dailly assignment compulsory for the assignment to be enforceable against third parties? No. Article L. 313-27 of the French Monetary and Financial Code provides that the assignment takes effect between the parties and becomes enforceable against third parties on the date affixed to the slip, without any other formality. The notification provided for in Article L. 313-28 of the CMF does not condition enforceability but the discharging effect of payment: until it has taken place, an assigned debtor that pays the assignor is validly discharged. Non-notification therefore does not affect the assignee's ranking against another assignee, but it exposes it to diversion of collections.

What is the difference between notification and acceptance of a Dailly assignment? Notification is a unilateral act of the assignee that prohibits the assigned debtor from paying the assignor. Acceptance is an undertaking by the assigned debtor, recorded on pain of nullity in a document entitled Act of acceptance of the assignment or pledge of a business receivable, in accordance with Article L. 313-29 of the CMF. Only acceptance purges the defences arising from the relationship between the assigned debtor and the assignor, unless the institution has knowingly acted to the debtor's detriment. A notification not followed by acceptance leaves intact the exception of non-performance and set-off of connected claims.

Can a Dailly assignment granted shortly before cessation of payments be annulled? Yes, depending on its cause and framework. Article L. 632-1, I, 6° of the French Commercial Code strikes down as null as of right contractual security interests created over the debtor's assets, during the suspect period, for previously incurred debts, but excepts the Dailly assignment made in performance of a framework agreement concluded before the date of cessation of payments. An assignment backed by a concurrent making available of funds rests on an immediate consideration and withstands challenge better than an assignment granted, outside an earlier framework agreement, to reinforce the cover of credit already extended. The discretionary nullities of Article L. 632-2 of the same Code add a risk where the counterparty knew of the cessation of payments.

Must the Dailly assignee file its claim in the assignor's proceedings? Yes, for its guarantee recourse. Article L. 313-24, paragraph 2, of the French Monetary and Financial Code makes the signatory of the slip, unless otherwise agreed, jointly and severally liable for payment of the assigned receivables. This claim must be filed under Article L. 622-24 of the French Commercial Code, within two months of publication of the opening judgment in the BODACC, extended to four months for creditors domiciled outside metropolitan France. Believing oneself exempt from filing on the ground that one owns the assigned receivables deprives the assignee of any recourse for the portion not recovered.

What becomes of a Dailly assignment of future receivables after collective insolvency proceedings are opened? Receivables whose triggering event, that is, the performance of the service, precedes the opening judgment remain vested in the assignee. By contrast, commercial case law does not allow the assignee to rely on receivables arising from services performed after the judgment, in particular in the context of continuation of the contract decided by the court-appointed administrator. The real base of a financing backed by a multi-year contract therefore contracts at the opening date, which must be built into the initial sizing of the outstanding amount.

In the event of double mobilisation of the same invoice between a Dailly assignee and a factor, who prevails? The solution adopted is that of the first in time: the date affixed to the Dailly slip, which fixes enforceability against third parties under Article L. 313-27 of the CMF, is compared with that of the subrogation receipt given to the factor. The second in time has only a claim against the assignor, most often insolvent, and a possible criminal characterisation of the facts. This risk justifies systematically questioning the assignor about its other mobilisation lines and, for receivables of high unit value, seeking acceptance by the assigned debtor.

Can an unlicensed lender use the Dailly slip? No. Article L. 313-23 of the CMF reserves this mechanism for assignments and pledges granted in favour of a credit institution, a financing company or one of the alternative investment funds it designates. A debt fund that does not fall within these categories, a corporate lender or a private investor must use the assignment of a receivable by way of security under Articles 2373 et seq. of the French Civil Code, resulting from Ordinance No. 2021-1192 of 15 September 2021, or the pledge of a receivable under Article 2355 of the French Civil Code, the conditions of enforceability and effects of which differ significantly from the Dailly regime.