All of French Company Law: ordinary law of companies and specific regime for different types of companies

Company Law (en cours)

Common in the transfer of shares in SNC, the non-liability clause aims to protect the transferor of shares by excluding or limiting the contractual liability guarantees that the transferee might invoke. There are mainly two types: absolute non-liability clauses and partial non-liability clauses.

In the first instances, the transferor declares not to grant any kind of warranty, explicit or implicit, due to the fact that the transferee already has a sufficient degree of information at the time of the transfer. Such a clause is justified when the transferee, by virtue of their prerogatives, was already well acquainted with the company in question, especially when they are its manager.

The latter are closely linked to the existence, in the transfer contract, of a liability guarantee clause. The partial non-guarantee clause aims to limit the liability guarantee clause in its scope by expressly excluding certain elements of the guarantee it provides.

Arising from the parties' use of contractual freedom, they are sometimes viewed with suspicion by the courts, which, with the aim of protecting the transferee, hinder their operation based on the requirement of good faith. The Court of Cassation thus held that the non-liability guarantee stipulated during a transfer could not apply when the transferor lacked good faith by failing to inform the transferee of the probable consequences of a workplace accident that occurred before the transfer on the company's assets and liabilities .

Furthermore, in construction law, a non-liability clause for debts and liabilities entered into by a partner of a real estate civil company for construction and sale is deemed unwritten with respect to third parties, as it is contrary to the judicial interpretation of the mandatory public policy provisions of Article L. 211-2 of the Construction and Housing Code, under which partners are liable for the company's debts with all their assets in proportion to their ownership interests .

Cass. 1re civ., 15 March 2005, LawLex202300001703JBJ, considering that the transferor of a company's shares is bound, even if the parties have expressly stipulated that any social or fiscal liabilities arising after the transfer but originating before this date cannot challenge the agreed price, by a pre-contractual duty to inform the transferee of the probable consequences of a work accident occurring before the transfer on the active and passive situation of the transferred company.

CA Poitiers, 9 May 2001, LawLex202300008701JBJ.

Specificities.

DUBOUT, Non-warranty clauses in the transfer of shares (droits sociaux) in

300. Specificities.