French Civil Code

Interest may be stipulated in return for a capital sum that the lender refrains from demanding. In this case, the loan is known as “annuitisation”.

This annuity can be set up in two ways, as a perpetual or life annuity.

The annuity constituted in perpetuity is essentially redeemable. The parties may only agree that redemption shall not be made before a period which may not exceed ten years, or without giving notice to the creditor at the term in advance which they shall have determined.

The debtor of an annuity constituted in perpetuity may be forced to surrender: 1° If he ceases to fulfil his obligations for two years; 2° If he fails to provide the lender with the security promised by the contract.

The capital of the annuity constituted in perpetuity also becomes payable in the event of the bankruptcy or insolvency of the debtor.

The rules concerning life annuities are set out in the section entitled “Random contracts”.