Reciprocal concessions and validity of a transactional protocol (Tout-la-Franchise, July 2015)
In accordance with Article 2044 of the Civil Code, a settlement protocol, in accordance with Article 2044 of the Civil Code, is a contract by which the parties terminate a dispute arising, or prevent a dispute from arising, by making reciprocal concessions.
Under the terms of a settlement protocol concluded between the parties to a franchise agreement, the franchisor, in return for the franchisee’s commitment to pay it settlement compensation, accepts the early termination of the franchise agreement.
Having failed to pay the Franchisor the entire transactional indemnity within the agreed deadlines, the Franchisee is summoned by the Franchisor to pay the sums remaining due in this respect.
The franchisee invokes the existence of a serious dispute, which would render the summary judge incompetent. The franchisee highlights the non-performance by the franchisor of its obligations under the franchise agreement, then the non-justification by the franchisor of the existence and quantum of its claim, and finally the nullity of the settlement protocol due to the absence of reciprocal concessions.
First, the Court considers that, with regard to the Franchisor’s non-performance of the Franchise Agreement, this ground is ineffective insofar as the dispute submitted to it relates to the execution of the Settlement Agreement, signed after the termination of the Franchise Agreement.
Then, concerning the quantum and the existence of the claim, the Court recalls the franchisee’s commitment to pay the settlement indemnity defined in the settlement protocol.
Finally, concerning the validity of the settlement protocol, the Court held that the protocol containing the franchisor’s agreement, in return for the franchisee’s commitment to pay settlement compensation, to terminate the franchise agreement early, effectively includes reciprocal concessions, as required by case law as a condition of validity of such acts, so that it does not appear that the settlement protocol incurs nullity on this count.
The Court therefore finds that there are no serious disputes likely to render the judge hearing the application for interim measures incompetent. It confirms the order of first instance which had ordered the franchisee to pay the amount remaining due in respect of the agreed settlement indemnity.
Paris
Court of Appeal, 7 May 2015, RG N°13/24587
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