Bankruptcy Law

Under Article L. 622-13, III of the Commercial Code, applicable to the receivership procedure on the basis of Article L. 631-14, contracts in the course of performance may be terminated ipso jure for failure by the receiver to respond to a formal notice to exercise the option to continue, and for non-payment by the other party. Termination is recorded by the bankruptcy judge at the request of any  …

Ipso jure termination of non-continued contracts

Under Article L. 622-13, III of the Commercial Code, applicable to the receivership procedure on the basis of Article L. 631-14, contracts in the course of performance may be terminated ipso jure for failure by the receiver to respond to a formal notice to exercise the option to continue, and for non-payment by the other party. Termination is recorded by the bankruptcy judge at the request of any interested party.

A current contract may be terminated ipso jure after the other party has served formal notice on the receiver to decide whether or not to continue the contract, but has failed to respond for more than a month. Case law assimilates the receiver's failure to respond within the one-month time-limit to the latter's express refusal , within the same time-limit, to continue the contract .

Termination of an existing contract ipso jure invalidates concomitant and interdependent contracts, such as a finance lease, which relates to the same equipment as the maintenance contract terminated ipso jure, without the need to prove that it cannot be used .

2) Default of payment by the contracting party

The ongoing contract is also automatically terminated in the event of non-payment . In accordance with Article L. 631-14(4) of the Commercial Code, when the performance of a continuing contract involves the payment of a sum of money, the payment must be made in cash, unless the receiver obtains the acceptance of payment terms from the debtor's co-contractor. In the absence of payment terms, the receiver who fails to pay the co-contractor in cash is liable to terminate the contract ipso jure, unless the co-contractor agrees to continue the contractual relationship. However, a co-contractor who wishes to continue the lease with the assignee may not seek termination of the contract against the debtor on the grounds of rental arrears . In such circumstances, the public prosecutor, the receiver, the legal representative or a controller may apply to the court to terminate the observation period.

In accordance with Article R. 622-13(2) of the Commercial Code, applicable to the receivership procedure on the basis of Article R. 631-20, “[t]he bankruptcy judge notes, at the request of any interested party, the automatic termination of contracts in the cases provided for in III of Article L. 622-13”. This request renders the automatic termination effective . The text specifies that the bankruptcy judge also establishes the date of termination, without formally granting him any discretionary power in this respect . The bankruptcy judge is not required to record the termination of the contract where this is the result of the receiver expressly stating his position in a letter sent to the other party .

Cass. com., 17 February 2015, LawLex202200000492JBJ (LJ) considering that the automatic termination of a current leasing contract, which takes place on the day the other party is informed of the decision of the legal representative not to continue the contract, presupposes an express expression of intent on the part of the latter.

Cass. com., 18 March 2003, LawLex202100001151JBJ (RJ) ; 20 October 2021, LawLex202100005998JBJ (LJ). See also Cons. d'Et. 25 January 2006, LawLex202100003130JBJ (LJ).

Cass. com., 20 October 2021, cited above.

Cass. com., 17 February 2015, cited above.

Cass. com., 20 September 2017, LawLex202100003303JBJ (RJ).

CA Orléans, 20 August 2020, LawLex202100005160JBJ (RJ).

Bankruptcy Law

375. Ipso jure termination of non-continued contracts

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375. Ipso jure termination of non-continued contracts

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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