Facts and points decided:
It is common practice in contracts of sale for vendor and purchaser to agree specific warranties to which the vendor is to be held. The French Civil Code, in Articles 1625 et seq., provides certain standard warranties which are implied into such contracts. Article 1628 in particular provides that, even if it is stipulated that the vendor shall be bound by no warranty, he remains nevertheless bound by those resulting from his personal actions; any contrary agreement is void. This case concerns the tension arising between the limited warranties set out in a contract for the sale of a bar and the statutory implied warranties of the Code Civil.
Held: the limited warranties set out in the contract did not displace the statutory warranty of Article 1628; hence the expiry of the former left the latter intact. The COURT, at the public hearing of 3 March 1992. As regards the first argument:
In view of articles 1625, 1626 and 1628 of the Civil Code;
Whereas 1) the vendor of a business must refrain from all action likely to entice away the customers of the business it has sold; 2) in cases where the parties have stipulated that the vendor cannot set up a particular business for a certain length of time, once that allotted time expires, the vendor is not released from its statutory warranty relating to its personal actions, which is a matter of public policy;
Whereas, 1) according to the judgement currently under Appeal, on 21 December 1977, Janiprix sold to Café de léquipe a bar located within the precincts of a shopping centre; 2) according to the terms of the sale contract, Janiprix undertook not to set up or run, either directly or indirectly, a business of the same nature for a period of five years and within one-kilometre as the crow flies; 3) the company itself ran a supermarket in the shopping centre; 4) in 1987 it moved that supermarket to another shopping centre close to the previous one and set up a bar; 5) the Café de léquipe, claiming that the vendor had failed to honour its obligation not to entice away the customers of the business it had sold, sued it for damages:
Whereas in order to reject that claim, the judgement holds that since Janiprix closed the shopping centre where it was established and set up another one (i) over 1 km away and (ii) more than 10 years after selling the business to the Café de léquipe, the warranties on which the latter is relying have expired; whereas it further holds that if the Café de léquipe was able to benefit from its location in the vicinity of a working shopping centre at the time of the purchase of the business, no agreement was drawn up between the parties to guarantee the continuation of that state of affairs, which was thus unpredictable, and Janiprix remained free to cease its own operations and to set them up in another place at its own will;
Whereas by relying on these grounds alone, without carrying out the concrete enquiries necessary in respect of the statutory warranty, which the pleadings of the company Café de léquipe invited it to do, the Court of Appeals judgement lacks legal basis:
ON THESE GROUNDS, and without it being necessary to give a ruling on the second argument:
QUASHES AND ANNULS, in all its clauses, the judgement rendered between the parties on 21st September 1989 by the Douai Court of Appeal; thus reverts both the matter and the parties involved to their respective positions prior to the aforementioned judgement, and, that justice may be done, sends them back to the Amiens Court of Appeal.
This page last updated Thursday, 15-Dec-2005 09:05:51 CST. Copyright 2007. All rights reserved.