Commercial Leases/Business Goodwill

The transfer of the business assets and that of the lease should not be confused, even if one does not go without the other. Thus, it may be tempting to conceal a lease transfer under a business asset transfer or vice versa, to avoid either the provisions of Article L. 141-14 of the Commercial Code, which allow the creditors of the business owner to oppose the payment of the price, or the prohibition of transferring the lease alone. These transfers are nevertheless distinct in their object. The transfer of the business assets indeed includes all the essential elements of the business. If the lease constitutes an essential element, the transfer cannot be qualified as a business asset transfer if it is not accompanied by a transfer of clientele . Therefore, in the absence of clientele attached to the business and activity in the premises , the transfer contract constitutes a simple transfer of the lease right. Conversely, when the transfer involves an autonomous branch of activity to which its own clientele is attached, the transfer constitutes a business asset transfer . Moreover, the transfer of a business operated in premises essential to its operation, and leased, necessarily entails the transfer of this lease . However, the mere fact that a transferee insists on the importance of the location is not enough to deduce that they only wanted to acquire a lease right . These transfers also differ in their implementation insofar as the publicity formalities required for any sale of business assets do not apply to the transfer of the lease right .

The leasing-management of the business does not constitute a transfer of the lease right, except in the case of a disguised transfer of the lease , or when the leasing-management agreement is fictitious .

Cass. 1re civ., 11 December 2001, LawLex202300013020JBJ. 

Cass. com., 27 February 1996, LawLex202300012791JBJ; 12 December 1989, LawLex202200007043JBJ. See also Reims, 12 July 2011, LawLex202300013578JBJ, which holds that it is essential for a clientele to be among the transferred elements when a lease contract clause conditions the assignment of the lease right on the actual transfer of the business and not just some of its elements.

Cass. com., 14 April 1992, LawLex202200007511JBJ.

Cass. com., 26 October 1993, LawLex202200008146JBJ.

CA Toulouse, 5 March 2024, LawLex202400002114JBJ.

Cass. com., 6 December 1982, LawLex202200007042JBJ.

CA Rouen, 8 September 2011, LawLex202300012956JBJ; CA Paris, 14 December 2011, LawLex202300012957JBJ, which rejects the hypothesis of a disguised lease assignment contract on the grounds that the existence of close ties between the tenant-manager and the principal tenant does not demonstrate the fictitious nature of the lease management.

CA Paris, 3 November 1989, No 88/06564: insofar as the management lease agreement is fictitious and actually appears as an act transforming a business operated by an individual into a business assigned to a company, such an operation is analyzed as a true transfer of the leasehold right, with the assignor being the initial owner, an individual, and the assignee being the company managed by the spouse of the latter.

292. Transfers of Business Assets/Lease-Management