Credit Lease Contract Caducity

Extract

[...] For what concerns the credit-leasing contract, the Court of Cassation decided until now that the adapted measure was the termination in case of resolution of the sales contract. Or, the Court of Cassation seems to confuse the two contracts since it decides to apply caducity to the credit-leasing contract, like financial leasing. However, what justifies caducity in the framework of financial leasing is the interdependence of contracts, an interdependence that is non-existent between the credit-leasing contract and the sales contract. [...]

[...] To conclude, it is essential to make a comparison with the reform of 1 October 2016 on civil contract law. In fact, this reform introduces at article 1186 of the civil code the definition of lapse. The first paragraph of this provides that: validly formed contract becomes void if one of its essential elements disappears'. Here, it is possible to compare this alinea with the Court's decision since it itself refers to 'the disappearance of one of the essential elements » of the credit lease contract. [...]

[...] However, the company, following a police check and a certificate of constatation drawn up by a bailiff, was able to establish that the vehicle did not meet the characteristics provided for in the contract. It then decided to contest the validity of the credit-bail contract and the sale contract. The credit tenant, plaintiff, sues the seller and the credit-bailor, defendants, for the resolution of the sale and the credit-bail and for the restitution of the price of the rents paid for the non-conforming delivery, on the basis of articles 1184 and 1610 of the civil code, before the competent jurisdiction. [...]

[...] In fact, the applicant seeks to recall the distinction between a leasing contract and a financial leasing contract. On the one hand, the leasing contract is characterized as a single and same operation, a single and unique contract that « aboutit to the credit-preneur's property access », a single contract that is the accessory of a main contract, the sales contract. While, on the other hand, financial leasing is characterized by « the interdependence between the concurrent or successive contracts inscribing in an operation including a financial leasing ». [...]

[...] Thus, the decision is criticizable on certain of its aspects, but it is essential to note that it follows a fairly rigorous legal analysis. [...]