Commercial Leases/Business Goodwill

The parties may agree to include a joint guarantee clause in the deed of assignment of the leasehold right, whereby the assigning tenant undertakes to remain guarantor and jointly liable with the assignee, towards the landlord, for the payment of rent and the performance of the lease conditions. The insertion of this clause may sometimes be imposed by the landlord in the commercial lease subject t …

Principle

The parties may agree to include a joint guarantee clause in the deed of assignment of the leasehold right, whereby the assigning tenant undertakes to remain guarantor and jointly liable with the assignee, towards the landlord, for the payment of rent and the performance of the lease conditions. The insertion of this clause may sometimes be imposed by the landlord in the commercial lease subject to the assignment. It is also possible to include a so-called “reverse” clause whereby the assignee acts as joint guarantor for the assignor for rent due before the assignment. In the absence of a joint liability clause between assignor and assignee, when the lease assignment is regular, the assignor is discharged from the obligations under the lease. In particular, the landlord can no longer require them to pay rent due after the assignment .

If, in the past, the Court of Cassation equated the assignor's commitment to remain a joint guarantor of their assignee as a joint surety , this is no longer the case today. Indeed, according to case law, this obligation characterizes a joint guarantee commitment  and not a suretyship , with the assignor assuming the status of joint debtor with the assignee . It follows that the joint guarantor cannot rely on the absence of certain mandatory written mentions in the deed applicable to the suretyship commitment (Art. 1376 and 2297 Civil Code), nor oppose to the lessor all exceptions, personal or inherent to the debt, that belong to the assignee (Art. 2298 Civil Code). The assignor is also inadmissible to invoke the provisions of Article 2314 of the Civil Code allowing them to be discharged from their obligation in case of loss of the benefit of securities or actions enjoyed by the lessor .

The parties may also agree on specific guarantees. Thus, when, on the one hand, a clause in the contract for the transfer of the business, including the leasehold right, stipulates that the transferor will bear any retroactive rent increase until the day of entry into possession, and, on the other hand, the transferee and the lessor have agreed on a new rent under the terms of a settlement ending the dispute over its price, the transferor is bound by the stipulations of this settlement, which he has undertaken to execute for the rent prior to the transfer .

Cass. 3e civ., 12 July 1988, LawLex202200008142JBJ; 15 January 1992, LawLex202300014395JBJ.

Cass. 3e civ., 20 July 1993, LawLex202300014299JBJ.

Cass. 3e civ., 26 November 1997, LawLex202200009064JBJ.

Cass. 3e civ., 28 October 2003, LawLex202300014301JBJ.

Cass. 3e civ., 15 November 2000, LawLex202300014300JBJ.

Cass. 3e civ., 15 November 2000, LawLex202300014300JBJ, previously cited; 28 October 2003, LawLex202300014301JBJ, previously cited.

Cass. 1re civ., 6 May 1997, LawLex202300014396JBJ, RJDA 11/97, No 1332.

Commercial Leases/Business Goodwill

317. Principle

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317. Principle

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Les décisions de justice citées dans ce paragraphe :

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