Business Contracts

Although a contrat de dépôt (bailment agreement) does not involve the transfer of a right in rem with effects similar to those of a sale, it is nevertheless similar in purpose. In effect, a contract for sale implies the delivery of a thing to the buyer, whereas a bailment agreement implies the handing over of a thing to the custodian.
Under the terms of Article 1915 of the Civil Code, a dépôt is a …

Bailment agreement (contrat de dépôt)

Although a contrat de dépôt (bailment agreement) does not involve the transfer of a right in rem with effects similar to those of a sale, it is nevertheless similar in purpose. In effect, a contract for sale implies the delivery of a thing to the buyer, whereas a bailment agreement implies the handing over of a thing to the custodian.

Under the terms of Article 1915 of the Civil Code, a dépôt is an act by which a person receives something from another, with the obligation to keep it and return it in kind. An agreement cannot therefore be classified as a “deposit” if the “depositary” has not committed himself to ensuring the custody, preservation and return of the thing .

However, according to the Court of Cassation, the essential element of a bailment agreement lies in the obligation to return the thing: an agreement which does not provide for the return of the goods delivered is therefore classified as a contract of sale . The court deduces that when a contract provides for a simple option to sell the equipment delivered, it cannot be classified as a bailment agreement, since it necessarily implies an obligation to return the goods . A car dealership agreement, for example, which stipulates that the equipment is purchased by the dealer while providing for the possibility of a deposit, on the understanding that vehicles placed on deposit remain the property of the manufacturer as long as the price of any vehicle sold has not been paid back to him by the dealer, constitutes a sale with reservation of title or a promise to sell, since the option given to the dealer to sell the equipment, without being an agent, rules out classification as a deposit .

One specific contract illustrates the fine line that can be drawn between a bailment and a sale: the dépôt-vente (consignment sale) contract . The courts consider that an agreement labelled "dépôt-vente must be recharacterized as a contract of sale, since it cannot constitute a true “deposit” in the absence of an obligation to return the goods delivered, and since the operator of the business in question acts on his own account, completely independently, freely sets the selling price of the goods and assumes the commercial risk of unsold goods, so that the transfer of ownership takes place as soon as the agreement is formed, in accordance with the provisions of Article 1582 of the Civil Code .

Cass. com. 22 January 2020, LawLex202200001288JBJ.

Cass. com. 17 February 1981, LawLex202200001731JBJ, for an agreement desribed as “contrat de dépôt-consignation” (deposit/consignment agreement) by the parties.

Cass. crim. 9 February 1983, LawLex202200008172JBJ.

The courts also sometimes consider that a dépôt-vente is a deposit with a mandate to sell, or even a mandate agreement.

CA Paris, 18 March 1997, LawLex202200008174JBJ, pointing out that the supplier had continued to supply the retailer even though the first merchandise had not yet been sold or paid for, without worrying about their fate or demanding the return of unsold goods, and that no formal notice to return had been sent.

Business Contracts

47. Bailment agreement (contrat de dépôt)

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47. Bailment agreement (contrat de dépôt)

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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au contenu exclusif Livv – juristes d’entreprise