Commercial Leases/Business Goodwill

Before the reform introduced by the ordinance of 10 February 2016 , in the absence of a date set by the judge, the termination took effect on the day of the judicial decision pronouncing it and not from the initiation of proceedings . Article 1229 of the Civil Code now provides that termination takes effect, in the absence of a termination clause, on the date set by the judge, or, failing that, on the day of the summons to court. In all cases, judges must take into account the tenant's fulfillment of their obligations during the proceedings, up to the day of the decision .

The lessee at whose fault the commercial lease was terminated, as they become an occupant without right or title, is liable, from the date of termination, for the payment of an occupancy indemnity, intended to compensate for the enjoyment of the premises and to repair the damage suffered by the lessor due to this occupation .

Damages may also be charged to the defaulting party , or, if the termination is pronounced due to the mutual faults of both parties, to each according to their faults . Furthermore, a landlord who requests the termination of the lease due to the exclusive faults of the tenant, who has committed no breach of the contractual stipulations, causes harm that must be compensated by the award of damages .

Pursuant to Article 1229, para. 1, of the Civil Code, termination ends the contract. It generally operates only for the future and not for the time during which the agreement was duly performed, considering the nature of the commercial lease, which constitutes a synallagmatic contract with successive performance. If the parties must be restored to the state prior to the lease, when the exchanged performances found their utility as the contract was reciprocally executed, there is no need for restitution for the period prior to the last performance that did not receive its counterpart . However, if non-performance or imperfect performance occurred from the outset, judicial termination results in the retroactive nullification of the lease , and the exchanged performances, which could only find their utility through the complete execution of the terminated contract, must be fully restituted by the parties (Art. 1229, para. 3, Civil Code).

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

Cass. 3e civ., 24 April 1974, LawLex202300011031JBJ; 29 April 1985, LawLex202200004644JBJ; 4 May 1994, LawLex202300011032JBJ; 13 May 1998, LawLex202200004176JBJ; 19 December 2000, LawLex202200004178JBJ; 25 June 2008, LawLex202200004180JBJ.

Cass. 3e civ., 26 June 1991, LawLex202300011033JBJ; CA Paris, 22 January 2014, LawLex202200003866JBJ.

Cass. 3e civ., 26 May 1961, LawLex202300011034JBJ; 26 November 1974, LawLex202300010941JBJ; CA Paris, 17 January 2018, LawLex202200004042JBJ.

Cass. 3e civ., 3 April 2001, LawLex202300010945JBJ; 11 December 2007, LawLex202300010944JBJ.

Cass. com., 3 January 1978, LawLex202300010943JBJ.

CA Paris, 12 September 2007, LawLex202200004164JBJ.

CA Versailles, 12 June 2018, LawLex202200004076JBJ.

Cass. 3e civ., 30 April 2003, LawLex202200004181JBJ.

262. Effects