French Consumer Law is a comprehensive and comparative overview of French and EU law in this field, covering: advertising, unfair commercial practices, conditions for the validity of contracts, unfair terms, product conformity, latent defects, product safety.

French Consumer Law

Closing-down sales are defined by Article L. 310-1 of the Commercial Code as “sales accompanied or preceded by advertising and announced as being aimed at, through price reductions, the accelerated disposal of all or part of the goods in a commercial establishment following a decision, whatever the cause, of cessation, seasonal suspension or change of activity, or substantial alteration of the operating conditions”. 

To fall under the rules of closing-down sales, four cumulative conditions must be met. The first three are identical to those applicable to sales, the last is specific to closing-down sales.

Originally, sales and closing-down sales were governed by the Law of 30 December 1906 on sales on temporary premises and Decree No 62-1463 of November 26, 1962, reformed by Law No 96-603 of 5 July 1996, whose provisions were incorporated into the Commercial Code by Ordinance No 2004-274 of 25 March 2004. Closing-down sales have always been dealt with in the same texts as sales because of their purpose: to dispose of goods in a short period of time. However, a distinction should be made between these two promotional practices. Even if they both aim to rapidly dispose of the trader's stocks, sales and closing-down sales have different objectives. The closing-down sale allows the trader to sell at a reduced price all or part of its stock of goods before wholly or partially selling its business or entirely transforming it. There can be no closing-down sale without the total or temporary closure of the place of sale or without a substantial change of activity of the same place. Unlike sales, the closing-down sale has no seasonal nature. The closing-down sale is strictly governed to prevent it from being used by the trader to attract a greater number of customers to the detriment of a fair exercise of competition. The aim of the regulations is therefore both to protect competition and the interests of consumers.

In addition to pursuing a different objective, closing-down sales and sales are subject to separate systems of rules. Closing-down sales must be the subject of a prior declaration to the mayor of the municipality  and only relate to goods in stock appearing in the inventory presented at the time of the prior declaration. Sales are only possible during two seasonal periods on dates fixed by decree and relate to goods in stock for at least one month.

 Since the entry into force of Ordinance No 2014-295 of 6 March 2014 on closing-down sales provided for by Article L. 310-1 of the Commercial Code. Until then, since the intervention of Order 2004-274 of 25 March 2004 simplifying the law and formalities for businesses, the prior declaration was to be made to the administrative authority in the place of the liquidation. Previously, closing-down sales were subject to the prior authorization of the prefect of the place of the liquidation.

331. Definition