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

The closing-down sale cannot take place for any reason. Article L. 310-1 of the Commercial Code provides an exhaustive list of the cases in which a commercial establishment can organize a closing-down sale:
-  cessation of activity;
-  seasonal suspension of the activity;
-  change of activity;
-  substantial change in operating conditions
When the sale is not advertised as a consequence of one of …

Exhaustive list

The closing-down sale cannot take place for any reason. Article L. 310-1 of the Commercial Code provides an exhaustive list of the cases in which a commercial establishment can organize a closing-down sale:

-  substantial change in operating conditions

When the sale is not advertised as a consequence of one of these causes, the classification of closing-down sale cannot be accepted .

The text concerns both the total cessation of the activity of the company operating the commercial establishment, and a change of owner, provided that this change is not the consequence of the transfer of the business to a legal entity managed or administered by the transferor. Thus, the closing-down sale due to the cessation of the activity of the company operating a business is not unlawful even if the manager operates a store in his own name immediately after the liquidation of the legal entity, when he has not been subject to any prohibition of activity as a natural person and the new business does not have the same purpose as the previous one . The cessation of activity may arise both from bankruptcy proceedings which result in the disappearance of the company and the voluntary choice of the undertaking to definitively  or temporarily  suspend its activity.

The reason on which the closing-down sale is based is the subject of close scrutiny by the trial judges. Thus, despite the mention “sales” on some labels, the announcement “before closure” in the press and the display in the window of a store of a message informing customers “we will be here [...] in a fully renovated store [...]” establish, according to the judges, the existence of a closing-down sale .

The change must correspond to the termination of a significant activity within the establishment. Thus, for a store that has several activities, the change may consist in stopping the marketing of part of the goods linked to one of these activities, provided that this stoppage has a significant effect on the general functioning of the store.

4)  Substantial change in operating conditions

The need to liquidate stocks may be based on the need to change the operating system. This change must be substantial. The performance of works may be considered as a change of the operating conditions. Indeed, it has been held that displaying promotions prior to works constitutes a closing-down sale . However, to characterize a substantial change, the works must have a profound effect on the commercial surface. This is the case for the expansion of a store which increases the sales area by one third  or the renovation of the premises which requires a more or less long closure. Simple renovation works, such as a change of carpet and existing partitions, repainting and a modification of the electrical installation, do not fundamentally change the structure of the store and therefore cannot justify a closing-down sale .

Changing the store name may also indicate a change in operating conditions. However, although the Rennes Court of Appeal considered that such a change could justify the liquidation of the goods, when it is due to a change of the principal supplier and the marketing of a new well-known brand , the Court of Appeal in Angers rejected the same action when the change of store name is insufficient in practice, with the same names appearing on the new sign with the exception of the reference to the former supplier .

Finally, the transfer of activity from a store located in Paris to premises in the suburbs may characterize a substantial change in operating conditions, as well as the permanent cessation of the activity of the first store . However, the mere transfer to a nearby address does not make it possible to classify the operation as a closing-down sale . The financial difficulties experienced by a trader also cannot justify a closing-down sale, when they are partly due to the commercial policy of the establishment .

 Cass. com., 23 October 2012, LawLex201200002239JBJ.

 CA Agen, 14 June 1999, LawLex200400001956JBJ.

 CA Paris, 16 October 2002, LawLex200300004579JBJ.

 CA Nancy, 11 January 1994, LawLex200400000150JBJ.

 Cons. Ét., 22 March 1999, LawLex200300001811JBJ.

 CA Paris, 10 December 2001, LawLex200400001092JBJ; 16 October 2002, LawLex200300004579JBJ.

 CA Paris, 28 October 1998, LawLex200300001738JBJ.

 CA Caen, 30 June 1999, LawLex200400001957JBJ.

  CA Paris, 28 October 1998, LawLex200300001738JBJ, cited above

  Cass. crim., 20 November 2012, LawLex201300000017JBJ.

  CA Angers, 21 March 1996, LawLex200300001747JBJ.

  CA Rennes, 1 April 1993, LawLex201200002203JBJ: jeweler belonging to a group, wishing to subscribe to a new group requiring it to liquidate its old stock before taking over a new stock. A change in the operating conditions may therefore result from a new contract.

 CA Angers, 21 March 1996, LawLex200300001747JBJ.

French Consumer Law

332. Exhaustive list

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Les notions juridiques connexes

332. Exhaustive list

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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