NEWS

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20-08-2018

 

The resolution of the sales contract now causes the furniture leasing contract to lapse

 

In a judgment of April 13, 2018, the Court of Cassation reversed its case law on the fate of the financial lease contract concluded between a financial lessee and a financial lessor in the event of cancellation of the underlying sales contract between the lessor and the supplier. 

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The Court of Cassation indeed decides that the cancellation of the contract of sale entails  the lapse of the leasing contract having financed the operation, and no longer its termination, so that the clauses provided for in the event of termination are inapplicable (Cass. ch. mixte, April 13, 2018, appeal no.  16-21.345).

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In this case, a company had ordered a truck equipped with a platform and a crane, the purchase of which was financed by a leasing contract. After noting during a police check that the load available on the truck was less than that agreed, the lessee sued the seller for nullity of the sale and the lessor for nullity of the leasing as well as in restitution of the rents paid. Unsuccessful at first instance, the lessee appealed. The Paris Court of Appeal pronounced the resolution of the sale for non-compliance, while considering that this resulted in the lapse of the financial lease. 

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After recalling that the concomitant or successive contracts which are part of a financial leasing transaction are interdependent (consistent solution since Cass. ch. mixte, May 17, 2013 n° 11-22.768 and n° _cc781905-5cde-3194-bb3b- 136bad5cf58d_11-22.927) and that the annihilation of any one of them leads to the lapse of the others (Cass. com., July 12, 2017 n° 15-27.703), the Court of cassation confirms the judgment of appeal in all its provisions.

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It also emphasizes that the lapse of a leasing contract, which sanctions the disappearance of one of its essential elements, in this case the sales contract in consideration of which the leasing contract was entered into, constitutes the suitable measure.

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The Court of Cassation also considers that the parties cannot avail themselves of the contractual clauses of guarantee and waiver of recourse so that the lessor cannot claim any compensation for termination. 

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In this respect, the lapse occurs " on the effective date of the resolution " which most often corresponds to the date of conclusion of the sales contract. Although the retroactivity attached to the lapsing of the leasing is not directly affirmed by the Court of Cassation, it nevertheless seems to have such an effect, except in cases where the contract is carried out by tranches and where the lapse may be noted on a date subsequent to that of the conclusion of the contract of sale.

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The fate of lessees is thus greatly improved since the Court of Cassation invalidates the contractual stipulations concerning termination. That said, it can be assumed that the parties will be able to adjust the effects of the termination of the leasing contract by specific clauses.

 

Roland Rinaldo, lawyer, Cabinet ARTLEX Nantes

Jean Orieux, trainee lawyer, Cabinet ARTLEX Nantes

 

Court of Cassation, Mixed Chamber, judgment of April 13, 2018, appeal no. 16-21.345, rescission of the sales contract, termination or lapse of the leasing contract, financial leasing