Good faith and commandment to pay

Tenants can avoid the termination of their commercial lease, by inviting the court seised to verify that the lessor is acting in good faith. Otherwise, as evidenced by this decision of the Paris Court of Appeal, the lease cannot be terminated.

Termination of the commercial lease: termination clause or judicial termination

The termination clause is a contractual mechanism, provided between the parties, to facilitate the termination of the lease for a fault that would be committed by the lessee.

Unlike judicial termination, the judge who is called upon to rule on an application to acquire a termination clause will have no power to assess the seriousness of the offence committed (Cass. 3e civ., 3 Apr. 2012 No.11-15.378)

This means that if the offence is validated by the judge, the lease is supposed to be terminated.

This is therefore a particularly dangerous clause for the tenant.

This is why the status of commercial leases frames this prerogative of the lessor.

The supervision by the status of commercial leases of the implementation of the termination clause

On the one hand, Article L. 145-41 of the Commercial Code, which is of public order, specifies that any termination clause does not take effect until one month after an unsuccessful order.

On the other hand, the lessee may request deadlines. These will often be payment terms and the summary judge will set up a payment schedule.

Therefore, like any contractual prerogative, the termination clause must be implemented in good faith and the judge must prevent unfair use, in accordance with Article 1104 of the Civil Code.

An order to pay issued in bad faith is void

It is now settled case law on the acquisition of a resolutory clause of a commercial lease, that a command is deprived of effect when it is issued in bad faith (Cass. 3ème civ., May 13, 1997, No. 95-17172; Cass. 3ème civ., October 27, 2010, No. 09-69820; Cass. 3ème civ., December 1, 2016, No. 15-25884; Cass. 3ème civ., May 23, 2015, No. 14-12606; Cass. 3ème civ., September 10, 2020, No. 19-17141).

The High Court reiterated this principle again in a recent decision dated 25 April 2024, ruling as follows:

“In determining thus, without investigating, as it was asked, whether the resolutory clause had been implemented in good faith by the lessor, the Court of Appeal did not give a legal basis to its decision” (Cass. 3ème civ., April 25, 2024, No. 23-10384).

The latest decisions of the Paris Court of Appeal continue this jurisprudential construction (For illustration: CA Paris, October 6, 2022, No. 22/01407).

It should also be borne in mind that the judge has an obligation to investigate, at the request of the tenant, whether the lessor claims the benefit of TERMINATION CLAUSE in good or bad faith (Cass. 3ème civ., June 5, 1991, No. 8921166; Cass. 3ème civ., September 8, 2016, No. 13-28063).

The case law thus sanctions the lessor whose attitude, assessed at the date of issue of the order, reveals that his real will is foreign to the reasons referred to in the order.

As an illustration, it was judged that the lessor was acting in bad faith when:

• the lessor knew that the lessee was absent at the time the order was issued;
• the lessor invoked as a reason for uncapping the work carried out by the lessee, in respect of which he then had an order issued;
• the lessor shows a malicious intention to oust the lessee from a store that he intended to take over “without a untied purse”.

In its judgment of 3 October 2024, the Paris Court of Appeal considered that the lessor was acting in bad faith since the premises had become unusable because he had failed to comply with his obligation to deliver.

Since the lessor was therefore responsible for the situation, he could not attempt to terminate the lease through the use of a payment order.

A similar decision had also been rendered by the High Court, when the lessor had issued PAYMENT ORDER whereas the premises were unusable in the absence of compliance work for which he was responsible (Cass. 3ème civ., 11 February 2004, AJDI 2004, p. 197).

Commercial tenants can thus oppose the orders to pay issued to them at the request of their landlords, invoking in particular their bad faith.

Paris Court of Appeal, 3 October 2024 No.24/011459

Nicolas Pchibich