Commercial Leases/Business Goodwill

Under the terms of Article 1728, 1° of the Civil Code, the lessee is bound by an obligation to use the leased premises reasonably and according to the purpose given to them by the commercial lease, or according to the presumed purpose based on the circumstances, in the absence of an agreement. If the purpose is characterized not by the use the tenant may have made of the premises , but by the cont …

Intended use of the premises

Under the terms of Article 1728, 1° of the Civil Code, the lessee is bound by an obligation to use the leased premises reasonably and according to the purpose given to them by the commercial lease, or according to the presumed purpose based on the circumstances, in the absence of an agreement. If the purpose is characterized not by the use the tenant may have made of the premises , but by the contractual allocation given to them by the parties , which must comply with public policy (Art. 6 Civil Code) and the co-ownership regulations , the lessee who does not use the leased premises reasonably or employs them for a purpose other than that for which they were intended, or which may result in damage to the lessor, is exposed, depending on the circumstances, to the termination of the lease (Art. 1729 Civil Code)  or to the application of a possible termination clause, to the restoration of the premises, as well as to the payment of damages for the harm suffered. Furthermore, the lessee who changes the contractually agreed purpose of the lease may be given notice with refusal of renewal without eviction compensation . If it is expressly provided in the lease that the lessor authorizes “the lessee to freely use the leased premises within the framework of conducting their business,” these stipulations do not authorize the lessee to disregard the purpose of the premises . Thus, a lessee fails in their obligations when they transform a commercial-use premises into an artisanal and artistic workshop  or when they extend the purpose of the premises, even if limited to a related or complementary activity, carried out without the prior authorization of the lessor or, failing that, the court .

The Court of Cassation allows the lessee to engage in ancillary activities without contravening the contractual purpose provided for in the lease. Thus, a lessee may, for premises exclusively used as a bar-restaurant, resort to musical entertainment and other activities such as art exhibitions, where the gratuity and absence of recorded revenue in accounting demonstrate that these are ancillary activities . Conversely, when the common intention of the parties was to provide the lessee with facilities for the use of sports clients seeking a place primarily to engage in physical activity and to have a quick meal, the lessee fails to meet its contractual obligations if, despite formal notices sent to him, he continues to engage in restaurant activities and organize musical evenings advertised in the local press, which, far from being reserved for only members of the sports center or their relatives, were intended for a public of consumers with no connection to them .

The trial court judges must independently assess, if not the agreement, at least the common intention  of the parties regarding the intended use they wished to assign to the leased premises, hence the necessity of including in the lease a purpose clause stipulated in clear and precise terms. Thus, such a clause prevails over the clause relating to the description of the leased premises, when it stipulates that the premises subject to the lease may be used by the lessee for all commercial activities and the mention “the premises subject to this lease” does not distinguish between rooms for commercial use and rooms for private use , or when the lease assigns to all the premises on the ground floor and the first floor the exclusive purpose of bar, café, restaurant business, even if the premises on the first floor are described in the lease as an apartment comprising an entrance, kitchen, two bedrooms . The judges could infer from the silence of the lease, which mentions neither the purpose of the premises nor the authorized business, and formulates no restriction or prohibition of any commercial activity, that the common intention of the parties was to impose no limitation on the lessee's professional freedom . When in the absence of a written lease agreement, the parties' agreement on the exclusive purpose of “bar, brasserie, restaurant” mentioned on the lessee's Kbis extract is not established, the lease must be deemed granted for all businesses to which the leased premises were suited .

However, the lessee may only occupy the premises described in the lease. Therefore, they fail in their obligation to use the leased property as a prudent administrator and according to the purpose given by the lease when they occupy almost the entire roof terrace, while the description of the leased premises in the lease establishes that no roof terrace is included in the rental , or when they occupy, without authorization, a common area not included in the leased premises, while the lease required them to comply with the condominium regulations .

When the lease provides that the rented premises are subject to multiple purposes, two situations must be distinguished: either it is specified whether the lessee is required to conduct all the activities indicated in the purpose clause, or nothing is stipulated, in which case the lessee is not obliged to operate all the activities listed in the lease. Thus, when the lease states that the lessee may not conduct other businesses in the rented premises than that of “café hotel restaurant” and may not temporarily cease its operation under any pretext, the lessee cannot eliminate the hotel and café activities without the landlord's authorization . Conversely, when such a clause merely specifies that the rented premises must “serve exclusively for the operation of the bar-hotel-restaurant business,” without requiring the lessee to maintain each of these activities, the abandonment of only the hotel branch does not suffice to constitute a breach on their part .

If the parties can decide, by mutual agreement, to conventionally modify the purpose of the lease, through an amendment for example, this modification of the purpose can also result from the landlord's tacit agreement, which must be unequivocal , but in no case from mere tolerance by the latter . Thus, the landlord's mere knowledge of the addition of an activity, which was not authorized but only considered in a draft lease following unsuccessful negotiations, and his lack of opposition only constitute mere tolerance . The fact that he tolerated, for many years, the change in the purpose of the leased premises, does not constitute tacit authorization either, and justifies the termination of the lease . The same applies to the landlord's silence  and mere passive attitude , which do not, by themselves, imply acceptance of the change of purpose, and do not presume any waiver on his part of his right to act for the termination of the lease, even if he did not initiate action as soon as he became aware of the situation . The solution established by the Court of Cassation finally found legal recognition in Article 1120 of the Civil Code, resulting from Ordinance No 2016-131 of 10 February 2016 , according to which, “silence does not constitute acceptance, unless otherwise provided by law, usage, business relations, or particular circumstances.” Conversely, the landlord's tacit acceptance of the change in the purpose of the leased premises is characterized when he has made purchases in the tenant's store for years of products not provided for in the lease , or when, in violation of the purpose clause, the tenant operated a dry-cleaning business on the premises, but the landlord, residing in the same building, entrusted him on various occasions with clothes for cleaning .

Finally, the landlord may also authorize the tenant to carry out activities in the leased premises that differ from those provided for in the lease, provided that certain conditions are met, such as, for example, their compatibility with the purpose, characteristics, and location of the building .

Cass. 3e civ., 13 February 1970, LawLex202200010637JBJ, which adds that mere knowledge of an irregular situation cannot confer a right, in the absence of any unambiguous positive act constituting authorization.

Cass. 3e civ., 6 December 1995, LawLex202100004552JBJ.

Cass. 3e civ., 25 January 2006, LawLex202100004578JBJ, op. cit.

Cass. 3e civ., 4 March 2008, LawLex202100001377JBJ, which approves the court of appeal having sovereignly deduced the use, by the lessee, of all the premises for its commercial activity.

Cass. 3e civ., 9 March 2010, LawLex202300000278JBJ, which approves the court of appeal for having held that the use of the premises located on the first floor as a restaurant does not constitute a change in the use of the premises.

Cass. 3e civ., 4 June 1971, LawLex202300000279JBJ.

CA Paris, 27 June 2024, LawLex202400005042JBJ.

Cass. 3e civ., 19 May 2015, LawLex202100004595JBJ.

Cass. 3e civ., 5 February 1997, LawLex202100004557JBJ.

CA Paris, 24 November 1994, No 92/22454. – Confirmed by Cass. 3e civ., 4 February 1997, LawLex202200000672JBJ.

Cass. 3e civ., 3 March 1993, LawLex202300000510JBJ.

CA Colmar, 12 June 2024, LawLex202400004638JBJ.

Law No 65-557 of 10 July 1965 establishing the status of co-ownership of built properties, Art. 8, I, para. 1, and 9, para. 1.

Cass. 3e civ., 26 November 1991, LawLex202200001106JBJ.

Cass. 3e civ., 12 May 2016, LawLex202300000511JBJ.

Cass. com., 10 April 1962, LawLex202200010860JBJ: in this case, the order requiring the lessee to comply with the use of the premises, under penalty of triggering the termination clause of the lease, had no effect.

Cass. 3e civ., 4 May 2006, LawLex202300000512JBJ: in this case, the lessee was operating a new crêperie business in the leased premises without the lessor objecting, even though the lease only authorized the operation of a café-bar; Cass. 3e civ., 10 April 2025, LawLex2025000003077JBJ.

Cass. 3e civ., 4 February 1997, LawLex202200000672JBJ, op. cit.; CA Colmar, 12 June 2024, LawLex202400004638JBJ, op. cit.

Cass. com., 26 February 1962, LawLex202200010863JBJ.

Order No 2016-131 of 10 February 2016 on the reform of contract law, the general regime, and the proof of obligations, Art. 2.

Cass. com., 12 January 1967, LawLex202200010861JBJ.

Cass. 3e civ., 3 December 1974, LawLex202300000513JBJ.

Cass. 3e civ., 27 November 2007, LawLex202300000514JBJ, according to which the lessee cannot carry out the intended activity, which would have required significant interior and exterior renovations, and which is not compatible with the purpose of the building designed for sales and exhibition activities of equipment.

CA Versailles, 16 June 2022, LawLex202200003548JBJ.

Cass. 3e civ., 5 July 1995, LawLex202300000515JBJ.

CA Versailles, 24 November 2022, LawLex202200010910JBJ.

CA Lyon, 13 January 2015, LawLex202200010430JBJ.

Cass. 3e civ., 24 October 1990, LawLex202100003955JBJ.

Cass. 3e civ., 13 January 1999, LawLex202100004637JBJ.

Cass. 3e civ., 25 January 2006, LawLex202100004578JBJ.

Commercial Leases/Business Goodwill

114. Intended use of the premises

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114. Intended use of the premises

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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