Commercial Leases/Business Goodwill

Pursuant to Article L. 145-9, para. 2, of the Commercial Code, “in the absence of notice or a request for renewal, the lease made in writing is tacitly extended beyond the term set by the contract” . The tacit extension does not result in the formation of a new contract . It is the initial lease that continues purely and simply, for an indefinite duration , and which only ends by a request for renewal or by the issuance, at any time, of a notice  “given at least six months in advance and for the last day of the calendar quarter” .

The rights and obligations of the parties remain identical to those provided in the initial lease since it is the same lease that continues. Thus, if the lessee still benefits from the possibility of assigning their leasehold right, the clause by which the assigning lessee remains jointly liable with the assignee must apply until the expiration of the renewed lease , with the guarantor's coverage obligation ending only on that date. Similarly, the Court of Cassation considers that the provisions, inapplicable to ongoing leases, of a new law that came into force during the period of tacit renewal, cannot govern a prior lease that has not been terminated .

In the event of a renewal request, it is essential to specify that Article L. 145-34, para. 3, of the Commercial Code provides that the capping rules “are no longer applicable when, by the effect of a tacit extension, the duration of the lease exceeds twelve years” .

CA Grenoble, 9 September 2021, LawLex202200003009JBJ.

Cass. 3e civ., 18 March 1998, LawLex202100003798JBJ.

Cass. 3e civ., 27 January 1999, LawLex202100003799JBJ. – See also Cass. 3e civ., 7 December 2004, LawLex202100003802JBJ.

Cass. 3e civ., 12 March 2002, LawLex202100003800JBJ. – Also see Cass. civ. 3e, 23 March 2004, LawLex202100003801JBJ.

Cass. 3e civ., 7 February 2007, LawLex202200004708JBJ.

Cass. 3e civ., 19 February 1975, LawLex202200004617JBJ.

Cass. 3e civ., 18 March 1998, LawLex202200003896JBJ.

93. Tacitly extended lease