Franchise Contract Transmission in Merger-Acquisition

Extract

[...] Confirm that contracts concluded intuitu personae do not automatically transfer in the event of a merger-acquisition. The consent of the co-contracting party is required, which can pose practical difficulties in restructuring operations . The judgment consecrates the intransmissibility of the franchise contract in the event of a merger, without the need for an express clause of intransmissibility. The Court of Cassation no longer relies on contractual stipulations, but on the intrinsic nature of the franchise contract, which is concluded in consideration of the person of the franchisor. [...]

[...] civ., IV, n° 111, BJS note B. Saintourens; RTD com p obs. P. Le Cannu et B. Dondero - Effects of the merger on contracts concluded intuitu personae The franchisor, Médis company, entered into a franchise agreement with the franchisee, Ms. on April for the operation of a business under the SPAR brand. An amendment signed on March included a jurisdiction clause designating the courts of the franchisor's headquarters. On November Médis company was absorbed by Distribution Casino France (Casino company) as part of a merger-acquisition. [...]

[...] - An original element of the ruling is that it admits that a a third party to the contract can invoke the intuitu personæ to contest a transmission, which could open the way to more complex disputes. Reinforces the non-transferability of contracts intuitu personae, while leaving uncertainties and raising criticisms about its practical impact and compatibility with European law. Course Notes A franchise contract is a contract intuitu personae ? The franchisee commits taking into account the peace of the franchisor The effect of the merger is that it cannot be transmitted to a third party without the consent of the franchisee or the franchisor. [...]

[...] The franchisee then appealed to the Court of Cassation. - The Casino company argued that the merger-acquisition leads to the universal transmission of assets, including contracts, which makes it a beneficiary of the franchise contract. - The franchisee argued that the franchise contract was concluded in consideration of the person of the franchisor (intuitu personae), which prevented its transfer without their consent. Does a merger-acquisition automatically lead to the transmission of a franchise contract, even if it was concluded intuitu personae, without the consent of the franchisee? [...]