French business law

                                               FRENCH BUSINESS LAW SEMESTER 1

(Access to the moodle platform:

Link: https://agorassas.u-paris2.fr/cours/view.php?is=31430

key 22L1S1DR23

Some of the books are online on the cujas BIU website)

Introduction

historical backgrounds of the specificities of FRL:

aim: explanation of French law and French legal terms

What is frl all about?

It was first build by and for merchants/commerçants. It was commercial law.

The other independent professionals were not concerned by this (artisans, bankers, farmers). They were concerned by civil law which applied only to them. There was a real distinction

1807: The Commercial Code was drafted, three yrs after the CC. it was heavily criticized bcs it was badly written and uncomplete. For instance, it did not contain a lot of rules abt commercial co, even tho they played a very important role in the eco activities. They showed that lawmakers, at the beginning of the 19th, thought that merchants were the only indep pro who deserved to have specific rules (none for artisans of armers)

Following the drafting of this code, lawmakers continued to focus on commercial activities

For instance, in 1867, a status was adopted which concerned only commercial co. (shares co)

And 1925 (SARL/société à responsabilité limitée) another status was adopted for them (limited liability co)

20th century: the lawmakers created specific assets but only for merchants. For instance, in 1909, specific rules for going concern (fonds de commerce).

It was also the case for commercial leases (bail commercial/ baux commercaux) with 2 status (1926 and 1953)

All of them are set in the commercial code.

Last example: when there’s a dispute btw merchants, they go to the civil jurisdiction bc there are special courts which resolve it. (the commercial courts = les tribunaux de commerce)

Légifrance to have access to the commercial code

Things have changed to a certain extent. Indeed, there are fewer and fewer diff btw the rules which apply to merchants and the one that apply to other inde pro

1st reason: some rules have been extended/gradually applied to other pros or, for some of them, to everybody

For instance, the “prescription” rules (the laps of time after which you can no longer assert one of your rights)

Before 08, there was a specific prescription in commercial law: 5 yrs after the event.

In civil law, it was btw 10 and 30 yrs (quite longer)

With that reform, the civil prescription is also of 5 yrs.

Insolvency law applies to pros who cannot pay their debts anymore. They may be submitted to spe proceedings. It concerns all inde pros. (farmers or artisans or liberal pros)

2nd reason: some rules have been, from the beginning, created for all inde pros, all cos.

-        It’s the case of competition law (le droit de la concurrence)

-        Second example: law of 02/14/2022 the stages of entrepreneur individual (small revo in frl) it’s called EI. every entrepreneur has automatically two patrimonies pro and perso. Applies to natural persons, not legal persons (personnes physiques et morales)

This status applies to all entrepreneurs, whatever kind of activity they practice.

Topic 1 : Identification of the different independent professionals in business law, and presentation of the specific assets they may own

Titre I: Identification of the different independent professionals

Chapitre I : Merchants (les “commerçants”)

Section 1: Who are the “merchants”?

• Art.L.121-1 Commercial Code (légifrance)
• Merchants= those who carry out commercial acts as their usual profession.

To be a merchant, u have 2 carry out ur activity as an independent. U must act for urself, not be mandated by sbdy else. You can have employees workin for u.

Says expressely that it must be ur usual profession, a way for u 2 earn ur living ( intend 2 make profit). U must carry out commercial acts= a commercial activity

How to know if what ure doing is a commercial activity? Refer 2 the

• Art.L.110-1 Commercial Code (légifrance)

Definition of trader (a distribution activity)

• Bill of exchange (lettre de change)
• Movable (meuble); Immovable (Immeuble) assets ( asset leasers)

Kiloutou example

Supply activity/ protection activities

Section 2: Specific rules applying to merchants

Most of the time the specific rules only apply to merchants. Exceptions are very rare

• Rules of proof :  the existence/context of an agreement needs to be proved in a written document.

Exceptions :

• An agreement of a value of less than 1500€ can be proved by any means, not only by a written document signed by both parties (freedom of proof) such as a testimony

Art.L.110-3 commercial code : if the other party is a merchant and if their act is a commercial act u can use any kind of proof regardless of the amend of the transaction

• Joint and several engagement is presumed (présomption de solidarité) presumption of joint and several liability. Two parties engaged in the same contract: debters

Two persons that are jointly liable : their creditor can ask one of them 2 pay the entire amount of the debt.

Art.13-10 civ Code

Contra legem costum : joint and liability is presumed

• Commercial courts ( art.L721-3 commercial code) tribunaux de commerce

Disputes btwn merchants + related to commercial companies

A bill of exchange (lettre de change)

Juges in co courts are not pros :  artisants, indep pros which means that merchants are going to be judged by their peers. They only receive a small indemnity (unpaid)

That’s why there are some critics.

Since 01/01/2022: the co code also have jurisdiction over disputes btwn craftmen

Chapitre II: The other professionals

Section 1: Farmers

Section 2: Craftsmen (artisans)

Section 3: Liberal professions

Titre II: The specific assets that the merchants may own

Chapitre I: The going concern (le fonds de commerce)

Section 1: Notion of going concern

Section 2: The composition of the going concern

§ 1. Tangible properties

§ 2. Intangible properties

A. The commercial name (nom commercial)

B. The external sign (l’enseigne)

C. The clientele (customer base): la clientèle

D. The right to a lease, the commercial property (le droit au bail; la propriété commercial

E. Licenses and authorisations

F. Industrial property rights

1. Patents for inventions

2. Trademarks

3. Designs and models

Section 3: The operations on the going concern

§ 1. The lease of the going concern (la location-gérance)

A. Conditions of the lease

B. Effects of the going concern lease

1. Between the parties

2. With regard to third parties

C. Termination of the going concern lease

§ 2. The sale of the going concern

A. Conditions of the sale

B. Effects of the sale

Chapitre II : The commercial lease

Section 1 : Conditions of application of the status

§ 1. Conditions concerning the parties

§ 2. Conditions concerning the going concern and the premises