Commercial Leases/Business Goodwill

Under Articles 1709 and 1728, 2° of the Civil Code, the lessor is obliged to allow the lessee to enjoy a building in exchange for a certain price that the latter is required to pay under the agreed terms. The amount of rent constitutes one of the essential elements of the contract when concluding a commercial lease . It is freely set by the parties, by mutual agreement, both in terms of the calcul …

Agreement of the parties

Under Articles 1709 and 1728, 2° of the Civil Code, the lessor is obliged to allow the lessee to enjoy a building in exchange for a certain price that the latter is required to pay under the agreed terms. The amount of rent constitutes one of the essential elements of the contract when concluding a commercial lease . It is freely set by the parties, by mutual agreement, both in terms of the calculation method used and the payment terms . Thus, the parties may set the initial rent amount based on the gross floor area of the leased premises, as long as no provision prohibits it .

If, in the absence of an amicable agreement, the rent cannot be judicially determined , the Court of Cassation, however, considers that the parties may validly provide in the lease for recourse to a third party to set the initial rent in case of disagreement. Indeed, the Court of Cassation considers that such a clause, which gives the experts' estimation a contractual nature, just as if it had been directly agreed upon by the parties, derives its validity from the provisions of Article 1592 of the Civil Code which, although specific to sales, applies by analogy to leasing . When the parties have not specifically designated the third party who was to determine the applicable rent amount, the trial court cannot in any way substitute for the parties in disagreement on the designation to which the lease was subject .

Article 1716 of the Civil Code specifies that “when there is a dispute over the price of an oral lease whose execution has begun, and there is no receipt, the owner will be believed on their oath, unless the tenant prefers to request an appraisal by experts.” To set the price of the oral lease, the trial courts cannot hold that Article 1716 of the Civil Code, not being of public order, allows them to set the price according to the circumstances, based on other elements, and mainly by referring to the expressions of intent of the parties .

Finally, it is not prohibited for the parties to mutually agree to determine in advance, through an express stipulation, the conditions for setting the price of the renewed lease .

Cass. 3e civ., 26 January 1972, LawLex202300003694JBJ.

Cass. 3e civ., 2 October 1984, LawLex202100004801JBJ, according to which a method of determining rent is the stipulation of a price calculated based on a certain percentage of the tenant's turnover.

Cass. 3e civ., 23 February 1983, LawLex202300003696JBJ.

Cass. 3e civ., 26 January 1972, LawLex202300003694JBJ, préc.

Cass. com., 8 May 1961, LawLex202300003698JBJ.

Cass. 3e civ., 27 April 1976, LawLex202100004769JBJ.

Cass. 3e civ., 15 March 2000, LawLex202100004674JBJ.

Cass. 3e civ., 10 March 2004, LawLex202100004756JBJ.

Commercial Leases/Business Goodwill

128. Agreement of the parties

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Les notions juridiques connexes

128. Agreement of the parties

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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