Commercial Leases/Business Goodwill

The termination of the commercial lease may result from the application of a clause inserted in the lease, which provides for the automatic termination of the contract in the event of a breach by one of the parties of its contractual obligations. Automatic termination was first established by Article 25 of the Decree of 30 September 1953 , before being codified in 2000  in the current Article L. 1 …

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The termination of the commercial lease may result from the application of a clause inserted in the lease, which provides for the automatic termination of the contract in the event of a breach by one of the parties of its contractual obligations. Automatic termination was first established by Article 25 of the Decree of 30 September 1953 , before being codified in 2000  in the current Article L. 145-41 of the Commercial Code . Since the law of 31 December 1989 , the termination clause may cover all breaches of the lease , whereas previously it could only mention the sole failure to pay rent.

If the termination clause allows, in principle, for the sanctioning of breaches by both parties to their contractual obligations, it is in most cases stipulated solely for the benefit of the landlord. In this case, if the landlord, who has served the tenant with a demand to pay invoking the termination clause for failure to pay rent arrears, requests the continuation of the lease and waives the termination clause, the tenant cannot assert its acquisition . In the event of an assignment of the lease, the landlord may rely on the breaches of successive assignees, provided they continued after the assignment . The breaches of the assignor become those of the assignee if, after being put on notice to cease the faults and breaches of the lease clauses, the latter does not put an end to them, and there is thus a continuation of the breaches after the assignment of the lease .

Furthermore, the Court of Cassation considers that the commercial property of the lessee, protected by Article 1 of the First Additional Protocol to the Convention for the Protection of Human Rights and Fundamental Freedoms and enshrined in Articles L. 145-8 to L. 145-30 of the Commercial Code, refers to the right to renew the commercial lease and cannot be invoked when the automatic acquisition of the termination clause agreed upon by the parties is at issue .

The termination clause must, in all cases, unequivocally express the common intention of the parties to automatically terminate their agreement . Subject to strict interpretation, it must be included in the lease contract and specifically sanction the breach of an obligation expressly provided for in the lease , for which the implementation of the termination clause is planned .

Decree No 53-960 of 30 September 1953 regulating the relations between landlords and tenants concerning the renewal of leases for buildings or premises used for commercial, industrial, or artisanal purposes, OJ of 1 October 1953.

Ord. No 2000-912 of 18 September 2000 on the legislative part of the Commercial Code.

Cass. 3e civ., 8 January 1985, LawLex202300010630JBJ; 29 April 1985, LawLex202300010635JBJ; 11 June 1986, LawLex202200010434JBJ; 18 May 1988, LawLex202300001355JBJ; 24 May 2000, LawLex202300011250JBJ; 19 May 2004, LawLex202300010636JBJ; 15 September 2010, LawLex202300010631JBJ; 17 September 2013, LawLex202200004426JBJ; 13 January 2015, LawLex202200004020JBJ; CA Poitiers, 25 June 2024, LawLex202400004834JBJ, which specifies that in addition to the violation of an obligation expressly provided for in the lease, the implementation of the termination clause inserted in a lease contract requires prior formal notice.

Cass. 3e civ., 8 June 2023, LawLex202400001727JBJ.

The provisions of Article L. 145-41 of the Commercial Code being of public order, any clause or stipulation having the effect of hindering its application is deemed unwritten pursuant to Article L. 145-15 of the Commercial Code.

Law No 89-1008 of 31 December 1989 on the development of commercial and craft enterprises and the improvement of their economic, legal, and social environment, Art. 7, OJ of 2 January 1990.

Cass. 3e civ., 15 January 1992, LawLex202300010632JBJ, for the removal of a sign; 30 May 1996, LawLex202300010633JBJ, for an irregular transfer.

Cass. 3e civ., 27 April 2017, LawLex202200008269JBJ.

Cass. 3e civ., 13 November 1979, LawLex202300010676JBJ.

Cass. 3e civ., 8 October 2015, LawLex202200008463JBJ.

Cass. 3e civ., 11 March 2021, LawLex202200004170JBJ.

Cass. 3e civ., 7 December 1988, LawLex202300005283JBJ.

Commercial Leases/Business Goodwill

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248. Could you please provide the French text you would like translated?

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