FINANCING AGREEMENT
Long term lease entered into by an authorised finance company: the Cour de cassation excludes the qualification as a financial service
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Cour de cassation, Commercial Chamber, 10 June 2026, No. 24-22.673, Published in the Bulletin
In November 2016, a professional entered into, off‑premises, a long‑term lease agreement with a leasing company for a photocopier supplied by a third‑party provider, in consideration of 21 quarterly rents. On the same day, she concluded with that provider a warranty and maintenance agreement for the photocopier, which she received a few days later.
In July 2017, she notified both companies of her exercise of the right of withdrawal on the basis of Articles L. 221‑18 et seq. of the Consumer Code.
The finance company challenged the exercise of this right, arguing that the contract at issue was a “financial service” excluded from the protective rules of the Consumer Code, on the ground that it was an ACPR‑authorised finance company entitled to carry out leasing operations.
The Aix‑en‑Provence Court of Appeal held that the withdrawal was valid. The finance company lodged an appeal in cassation, arguing that simple leasing constitutes an ancillary operation to leasing transactions and must therefore be characterised as a financial service within the meaning of the Monetary and Financial Code.
Does a long‑term lease concluded by an authorised finance company constitute a “financial service” excluded from the right of withdrawal provided for by the Consumer Code?
The Commercial Chamber of the Cour de cassation dismissed the appeal on the basis of Articles L. 221‑2 and L. 221‑3 of the Consumer Code.
The Court first recalls the scope of the right of withdrawal between professionals: the protective provisions on off‑premises contracts also apply to contracts concluded between professionals where the subject‑matter of the contract does not fall within the principal field of activity of the solicited professional and where the latter employs no more than five employees. Only contracts relating to financial services are excluded from this extension.
The Court then specifies the scope of this exclusion. Although Article L. 311‑2 of the Monetary and Financial Code allows finance companies to carry out ancillary operations such as simple leasing, this does not mean that such operations must be characterised as financial services for that reason alone.
Primacy of the operation over the operator
The Court affirms the primacy of the nature of the operation over the status of its provider. Relying on Directive 2011/83/EU (transposed by the Law of 17 March 2014), it recalls that financial services refer exclusively to services relating to banking, credit, investment and payment. Simple leasing of equipment does not fall within this definition, regardless of the status or ACPR authorisation of the institution offering it.
Practical lessons
This decision clarifies the interaction between consumer law and monetary and financial law where a long‑term lease is concluded by an authorised finance company.
A clear principle emerges: the nature of the operation prevails over the status of its author. A finance company may carry out operations ancillary to its principal activity (such as simple leasing) without that connection being sufficient to reclassify the operation as a “financial service” exempt from withdrawal.
For professionals employing no more than five employees, the decision secures the benefit of the right of withdrawal when they sign off‑premises long‑term lease agreements (e.g. photocopier, IT equipment, cash register), even with an authorised finance company.
In practice, finance lessors can no longer rely on their sole regulated status to exclude the Consumer Code. Unless they can demonstrate that the operation relates to a genuinely banking, credit, investment or payment service, they must comply with off‑premises rules, including providing the withdrawal form.
SALES REPRESENTATIVE
Termination of a commercial agency contract for gross misconduct: the temporary continuation of the relationship does not amount to the principal’s tolerance.
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Cour de cassation, Commercial Chamber, 3 June 2026, No. 24‑14.748, Published in the Bulletin
In September 2019, a commercial agent entered into a contract with a real estate agency. The contract expressly stipulated, in bold characters, that the agent could grant discounts to customers only with the principal’s prior express consent.
On 23 June 2020, the agent, on his own initiative, granted a substantial discount on the amount of his commission. The same day, the agency’s manager asked him by SMS to renegotiate the fees upwards, then, three days later, held a team meeting to remind everyone of the prohibition on unauthorised discounts.
On 14 September 2020, almost three months after this breach, the agency notified the agent of the immediate termination of his contract for gross misconduct and refused to pay any termination indemnity. The agent brought proceedings against the principal seeking payment of the indemnity.
The Bordeaux Court of Appeal dismissed his claim. The agent lodged an appeal in cassation, arguing that the continuation of the contractual relationship for almost three months precluded a finding of gross misconduct, since the principal had not immediately drawn the consequences of the breach.
Does the time elapsed between the commission of gross misconduct by a commercial agent and notification of termination by the principal amount to tolerance, thereby preventing the latter from relying on that misconduct to deny the termination indemnity?
In a judgment published in the Bulletin on 3 June 2026, the Commercial Chamber of the Cour de cassation dismissed the appeal on the basis of Articles L. 134‑12 and L. 134‑13 of the Commercial Code.
As to the characterisation of gross misconduct, the Court reiterates that gross misconduct, which undermines the common purpose of the mandate in the parties’ joint interest and makes continuation of the contractual relationship impossible, deprives the agent of the termination indemnity. The unauthorised reduction of fees breached an essential contractual clause (highlighted in bold) going to the very heart of the financial relationship. The finding of gross misconduct was therefore fully justified.
With regard to the absence of tolerance despite the time elapsed, this is the central point of the decision. The nearly three‑month delay cannot be interpreted as tolerance on the part of the principal where the latter expressed its disagreement continuously (SMS the same day, corrective team meeting three days later, subsequent reminders). The fact that the contract was not terminated immediately did not deprive the principal of the right to rely on the seriousness of the breach.
In practical terms, this confirms that, although gross misconduct is classically defined as a breach preventing continuation of the contract, the urgency of termination must be assessed in light of the principal’s overall reaction. The passage of time does not automatically neutralise gross misconduct.
What is detrimental to the principal is inertia or passive silence (which may amount to tacit acceptance or tolerance). Conversely, where the principal multiplies objections and warnings as soon as the facts arise, the lapse of time before notification of termination does not operate against it.
For principals, the decision underlines the importance of immediately documenting each breach in writing (emails, SMS, minutes of meetings, warnings). This record‑keeping makes it possible, even where termination is delayed by a few weeks, to prove the absence of tolerance and legitimately avoid paying the end‑of‑contract indemnity.
COMMERCIAL LEASE
Nullity of the lease and reciprocal restitutions: the right to an occupation indemnity does not depend on the lessor’s ownership.
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Cour de cassation, Third Civil Chamber, 21 May 2026, No. 24‑16.483
In 2012, a lessor granted a commercial lease over premises intended for the operation of a restaurant. The tenant subsequently carried on that business through a company. Several years later, the lessor served that company with a formal demand to pay rent arrears.
In response, the tenant and the company brought proceedings against the lessor seeking annulment of the commercial lease (on the ground that the property formed part of the public domain), restitution of the rents paid and compensation for the loss of their business.
The Basse‑Terre Court of Appeal: (i) declared the lease null and void; (ii) ordered the lessor to reimburse part of the rents received; (iii) rejected the limitation defence raised by the lessor; and (iv) dismissed the lessor’s counterclaim for an occupation indemnity, on the ground that he had not proved ownership of the leased property.
The lessor lodged an appeal in cassation. The Cour de cassation was thus asked three questions:
(1) Is a commercial lease over public‑domain property null and void?
(2) What is the starting point of the five‑year limitation period for an action for nullity based on the unlawfulness of the contract’s object?
(3) Can a lessor whose lease is annulled claim an occupation indemnity in consideration for the enjoyment granted to the tenant, even if he fails to prove ownership of the public‑domain property?
In a judgment of 21 May 2026 (published in the Bulletin), the Third Civil Chamber partially quashed the appeal judgment in so far as it dismissed the occupation indemnity (on the basis of former Articles 1131 and 1304 of the Civil Code).
As to the nullity of the lease, the Court confirms that the parties cannot subject public‑domain property to the commercial lease regime; such a lease is affected by absolute nullity for unlawful object.
As to the starting point of limitation, the Court recalls that Article 2224 of the Civil Code applies to actions for nullity based on an unlawful object. The five‑year limitation period does not automatically run from the date of signature of the contract, but from the day on which the party seeking nullity knew or ought to have known of the unlawfulness of the object. The action was therefore not time‑barred.
On the occupation indemnity (censure), the Court reiterates that retroactive annulment of a contract requires the parties to be restored to their previous situation, which includes restitution in value of the services rendered. Since the lessor had in fact granted enjoyment of the premises, he was entitled to an occupation indemnity. The lack of proof of his ownership of the property was an irrelevant ground.
In practice, as regards proof of limitation, where a contract is void for unlawful cause or object, the five‑year period is a sliding one. It is for the party relying on limitation to prove the date on which its opponent became aware of the defect.
The major contribution of the decision lies in the distinction between material restitution and real right: the obligation to make restitution following nullity is based on the reality of the services provided (enjoyment of premises) and not on ownership.
From a litigation‑strategy perspective, the decision is a warning to tenants: bringing an action for nullity of a lease in order to escape rent arrears does not entitle them to occupy the premises free of charge. The occupation indemnity offsets the restitution of rents. The financial risk must therefore be carefully assessed before bringing such an action.
