Understanding us

Legal Glossary

Abandonment of family
Offence committed in particular when :
– the father (or mother) shirks his material or moral duties towards his children for more than two consecutive months,
– a person ordered to pay maintenance does not voluntarily fulfil this obligation for more than two months.

Authentic instrument
A document drawn up by a competent public officer (notary, bailiff, registrar), drawn up in accordance with the formalities required by law and capable of being enforced.

Procedural document
A set of formalities to be carried out by the parties (the plaintiff or the defendant), their representatives or the court officers (lawyer, solicitor, bailiff).
It allows legal action to be taken, to ensure that the proceedings are conducted, to suspend or terminate them, or to enforce a judgment.
Example: summons, service of a judgment.

Private deed
A commitment drawn up and signed by individuals without the assistance of a public official.
Example: contract.

Legal action
Proceedings brought before a court to obtain respect or recognition of a right or legitimate interest. It also means :
– the right of a person to make a claim before a judge, to be heard and judged on it,
– the right of the opponent to argue the merits of the claim.

Sanction consisting of the payment of a sum of money.

An agreement or arrangement reached by conciliation of the parties, thus avoiding a trial.

Annulment – cancel
A legal act that has been declared null and void and has no effect. Example: the annulment of a contract for lack of consent by one of the parties.

An appeal against a court decision made in the first instance. The person who lodges the appeal is called the “appellant”, the person against whom the appeal is lodged is called the “respondent”.

When judgements are made by three judges, one is the president and the other two are called assessors.

A decision given by a higher court: Court of Appeal, Administrative Court of Appeal, Court of Assizes, Court of Cassation or Council of State. A judgement is synonymous with a judgment.

Immediate possession of a property or a sum of money.

Parental authority
A set of rights and duties attributed to the father and mother over their legitimate or natural child until he or she reaches the age of majority or is emancipated, in order to protect his or her safety, health and morality.

A private document signed by two people before drawing up a contract.

A document added to a contract and signed by those who concluded it.

A lawyer is subject to the discipline of a bar association and advises clients on legal, judicial and tax matters. He may also represent or assist them in court.
The lawyer is registered with a bar established at each Tribunal de Grande Instance.

Refers to a variety of leases: residential, commercial or rural. It is also used for the leasing of animals likely to be profitable for agriculture (“livestock lease”).
It also refers to the rental contract defining the relationship between an owner (the “lessor”) and his tenant (the “lessee”).

Any thing which is at one’s disposal and which is the subject of a real right. Example: property and its dismemberments (easements, usufruct).

Common property
Property of which the spouses are joint owners and which is divided in principle by half in the event of divorce, after dissolution of the community of spouses.

Tangible property
Property that has a material existence. Example: furniture, money, etc.

Real property
Property that cannot be moved (land, house, etc.) or objects that are an integral part of a building, known as immovable property by destination (fireplace, individual central heating, etc.).

1) Refers to a case that is brought before a judge.
2) An element leading to a consequence.

A person who undertakes to take the place of a debtor in the event that the latter does not pay his debt.

A panel of a court of law.

A particular provision in a legal document, which generally contains several clauses. Example: in a deed of sale, a clause specifying the delivery date or the method of payment.

Civil Code
A collection of laws and decrees relating to civil law.

Code de la Consommation
Collection of laws and decrees on consumer law.

Industrial Property Code
Collection of laws and decrees relating to industrial property.

Social Security Code
Collection of laws and decrees on social security law.

Code of Civil Procedure
Collection of laws and decrees in the field of civil procedure.

Labour Code
Collection of laws and decrees in the field of labour law.

Penal Code
Collection of laws and decrees in the field of criminal law.

A bailiff’s act ordering a person to perform the obligations arising from an authentic act.

Court-appointed lawyer
A lawyer appointed by the President of the Bar Association or, failing that, by the President of the court in a criminal case.

Competence – competent
Legal capacity for a public authority or a court to perform an act, or to investigate and judge a case.

Concubinage – cohabiting
Characterises two people who live together, without being married, and who have no legal relationship with each other.


1) Civil

A decision requiring a person to pay a sum of money (e.g. damages), to perform an act or to respect a right as judged.

2) Criminal

A court decision that finds a person guilty of committing an offence and imposes a sentence.

In criminal matters, a person guilty of committing an offence.

Convict: see Conviction

A letter by which a tenant indicates to the landlord (or vice versa) his or her intention not to continue the lease.

Contribution to the maintenance and education of children
After a divorce, a pension paid by one of the two parents to his or her ex-spouse, with whom the children’s main residence has been fixed.

Council of State
Supreme court of the administrative order. As such, it rules in particular at second instance on cases judged by the administrative courts and the administrative courts of appeal.
In addition, the Government consults it when drafting bills and certain decrees. Its opinion may also be requested in response to questions submitted by the Government.

Labour Court
Court competent to judge individual disputes arising from an employment or apprenticeship contract. It is composed of equal numbers of employers and employees.
The procedure includes a mandatory conciliation phase.

Amicable report
A document that two motorists must normally sign in the event of a traffic accident, even if they disagree on the circumstances of the event.

Constat par huissier
A document drawn up by a bailiff, which records in writing any element that needs to be ascertained in a certified manner.

Constitute (se): see Constitution

In the context of a procedure, an act by which certain decisions are officially announced.
Example: constitution de partie civile (a victim announces to the court and to the person responsible for the damage that he or she will seek compensation), or constitution d’avocat (a party indicates the lawyer he or she has chosen to assist him or her in a trial).

A document on plain paper, signed by at least two people, and having the force of law between the signatories.

Employment contract
A document on free paper, which defines the relationship between an employer and an employee.

An offence punishable by a fine of up to €1,500 (€3,000 in the event of a repeat offence) and additional penalties: suspension of driving licence, etc.

A document on plain paper, signed between two people.

A person who has been found to have committed an offence.

A court of higher jurisdiction. Example: Court of Appeal, Court of Assizes, Court of Cassation, etc.

Court of Appeal
A court of the second instance which considers a case previously submitted to a court.

Court of Cassation
Sitting in Paris, the highest court of the judicial system. Its role is not to judge a case, but to ensure the exact application of the law.

A sum of money owed to a creditor.

A person, natural or legal, to whom a sum of money is owed.

Guilty: see Guilty

A person, natural or legal, who owes a sum of money to another.

A person who owes a sum of money to another.

Judges are said to give a decision when, at the end of a trial, they rule on a case and give binding solutions.
The judgement is issued by the Courts of First Instance or High Court. The ruling is given by a Court of Cassation, Appeal or Assize, or the Council of State.

The receipt of a sum of money in the form of an annuity or capital.

Offence judged by the correctional courts and punishable by a maximum prison sentence of 10 years, a fine or additional penalties. Imprisonment may be replaced by alternative penalties (e.g. a day’s fine, community service).

Security deposit
A sum paid to a landlord when renting a house. In general, it is equivalent to two months’ rent.

Temporary detention
Temporary imprisonment.

Refers to the dissolution of a marriage.
While maintaining divorce for fault, the law of 11 July 1975 institutes divorce by mutual consent (on joint request or accepted request) or for rupture of the common life.

Consequences of an accident.

A sum of money, paid in the form of an annuity or a capital sum, intended to compensate for the prejudice suffered by a person, natural or legal.


1) All the rules governing social life.

2) Also refers to the prerogatives attributed to an individual.

Common law
A set of legal rules that apply generally to any situation that is not subject to special or particular rules.

Right of access and accommodation
In the case of divorce or separation of unmarried parents, the ability – set by law – of one parent to see and receive his or her child when the child is not ordinarily resident with the parent.

A sentence imposed by a court to serve a prison term.

A technician qualified to provide information to enable the judge, who has appointed him or her, to make a decision.

A measure ordered by the judge or the court, which consists in entrusting qualified technicians with a mission of information, to enable him to make his decision. When the case does not present any particular difficulties, it can be a consultation or even a simple observation.

Expulsion – Expulsion

1) Order given by the Minister of the Interior to a foreigner to leave French territory.

2) Enforcement, by a bailiff, of a court decision or notarial deed ordering an occupier to vacate premises.
The bailiff may request the assistance of the police. In some cases, the occupier may ask the judge for a period of grace.

Pledge (synonym of mortgage)
Refers to a guarantee granted on a building and published in the Bureau des hypothèques.
When the obligation guaranteed by a pledge is not respected, the beneficiary of this guarantee can obtain in court the sale of the building and be paid out of its price in preference to other creditors.

For the purposes of the investigation, a judicial police officer may hold a person at his disposal for a maximum of 24 hours. The public prosecutor may authorise the extension of police custody up to a further 24 hours.
The application of police custody is strictly regulated by law and its execution is supervised by the magistrates of the public prosecutor’s office. The person in custody has certain rights, such as the right to consult a lawyer under certain conditions. For certain offences (terrorism, drug trafficking), police custody can last a total of four days.

Keeper of the Seals
Minister of Justice

An act of clemency by the President of the Republic which grants convicted persons, individually or collectively, a total or partial remission of their sentence, or commutes it to a lighter sentence.

A department made up of civil servants who assist judges in their work. It is headed by a chief clerk, who is the custodian of the court’s records and is also responsible for the operation of the administrative services.

Remuneration of a lawyer or other professionals practising in private practice.

A ministerial officer with multiple tasks.

-To bring to the attention of the adversary the procedural documents and court decisions:
the “blue paper”,

-Ensuring the execution of legal decisions (seizures, evictions),

-ascertaining certain facts or situations (statements of facts).

Mortgage (synonym of pledge)
Refers to a guarantee granted on a building and published in the Bureau des hypothèques. When the obligation guaranteed by the mortgage is not respected, the beneficiary of this guarantee can obtain in court the sale of the building and be paid out of its price in preference to other creditors.

A civil servant whose situation is governed by the statute of the judiciary.
Magistrate of the Bench (as opposed to the Magistrate of the Public Prosecutor’s Office).

Family Court Judge
Sits at the Tribunal de Grande Instance. He has a wide range of competences: he decides on divorce and legal separation proceedings and their consequences, the determination and enforcement of maintenance obligations, the attribution and exercise of parental authority.

Enforcement Judge
Sitting at the Tribunal de Grande Instance, he rules on all difficulties concerning the enforcement of a judgment given by another court.

Lay judge
A citizen appointed or elected, as the case may be, to participate alongside professional judges in the work of justice. Example:
– juror of the Assize Court,
– assessor of the Juvenile Court,
– consular judge of the Commercial Court,
– assessor of the Commercial Leases Court,
– assessor of the Social Security Court.

Decision given by a court of first instance. In the broad sense, it refers to any decision rendered by a court.

All published court decisions which interpret and clarify the meaning of legal texts and, where appropriate, supplement laws and regulations.

Jurisprudence (making)
The authoritative solution given by a judge to a legal problem.

A prejudice suffered by a person as a result of a contract between parties. The penalty for this injury may be :
– financial compensation,
– the annulment of the contract which caused the injury.

Dismissal of an employee by his employer.

Formality by which a public authority attests the authenticity of an act.


Defects in a delivered item that make it unfit for its intended use. They may be due to a design error, to the quality of the materials used to make it, or to the incorrect use of these materials.

A decision by an employer to prohibit an employee from coming to work without pay. It is often a precursor to a dismissal procedure.

A child or adolescent who has not reached the legal age of majority, set at 18 years.

Ministerial officer responsible for receiving or drawing up deeds and contracts, thus conferring on them the authenticity that makes them incontestable.

Formality by which a person is officially informed of the content of an act to which he or she has not been a party, or of a court decision. This can be done by registered letter or by bailiff. In general, the possibilities of appeal start from the date of notification.

New economic regulations
Name given to the object of the Law n°2001-420 of 15 May 2001 which provides for a number of important measures affecting legal relations of an economic nature and which modifies, mainly, the Monetary and Financial Code, the Commercial Code, the Consumer Code and the Labour Code. This law regulates, in particular, the notion of company director.

Information concerning agreements concluded by a company with one of its directors, transfers or acquisitions of shares listed on the financial markets, investment certificates, the fight against money laundering, the means and powers of the Competition Council, the means to fight against certain anti-competitive commercial practices, the creation of the functions of Chief Executive Officer, the accumulation of mandates, the status of Statutory Auditors, the liberation of the capital of SARLs and companies with variable capital, the attributions of the Works Council, and the procedure of injunction to do.
See the text which can be consulted on the “Légifrance” website.

Novation” is the effect of substituting a legal relationship that has been extinguished by the conclusion of a new contractual relationship. It occurs either as a result of a change in the debt between the same contracting parties, or as a result of a change in the creditor or the effect of a change in the debtor. This word is also used to designate the substitution of new contractual conditions for those previously agreed by the parties.

By way of example, we refer to case law. Thus, the Versailles Court of Appeal ruled (1st Ch., 2nd sect., 19 April 2005 – BICC n°640 of 15 May 2006), that the establishment of a conventional recovery plan by an over-indebtedness commission is not intended to make the debtor contract a new debt that would replace the old one, its exclusive purpose is to adjust the repayment in such a way as to make it compatible with the resources of the over-indebted debtor. The fact that such a plan modifies or removes the contractual interests, even if it is a loan, is therefore not likely to entail novation, which presupposes, in addition to the will to novate, the extinction of the old debt by substitution of a new one.

The character of an act which does not meet the conditions laid down by the law, which leads to its retroactive disappearance. Example: contract concluded without the consent of one of the partners.

A civil or criminal remedy which allows persons who have been the subject of a default judgment to have their case retried, in their presence, by the same court.


Decision taken by a single judge:

– investigating judge (order of release, order of dismissal),
– Matrimonial judge (order of non-conciliation),
– interim relief judge.

Public Prosecutor’s Office
This is the name given to all the judges who, in criminal cases before a tribunal de Grande Instance (Public Prosecutor’s Office), plead on behalf of the State, as opposed to the judges, who make the court decisions.

Civil party
Legal term for “victim”.


Sanction ordered by a judge in a judgment.

A periodic financial payment, fixed by the court (if applicable), which a person in need receives from another person in a position to help. This right is based on kinship, alliance and can be extended following a divorce. It also exists for the benefit of a child whose filiation is not established (this is known as a “subsidy”).

Legal person
A grouping which is recognised as having a legal existence and which, as such, has rights and obligations (company, association, trade union). It is distinguished from natural persons, i.e. individuals.

A means of bringing an offence to justice, of which a person claims to be a victim. Complaints can be lodged with the police or gendarmerie, or with the public prosecutor.

Damage suffered by a person in his property, body, feelings or honour.

Personal injury
Damage to a person’s health or integrity – physical or mental.

Injury to the enjoyment of life
Damage resulting from the deprivation of certain pleasures (usually as a result of a personal injury). Example: inability to continue to practice an artistic activity or a sport.

Material damage
Damage to property. Example: damage resulting from the destruction of a motor vehicle.

Non-material damage
Damage of a psychological nature, following – for example – the disappearance of a loved one…

Civil definition: loss of a right when it has not been exercised for a certain time.
Criminal definition: no proceedings can be taken against the perpetrator after :

– 10 years for a crime,

– 3 years for an offence,

– 1 year for a contravention.

This period is established from the day the offence was committed, otherwise from the last act of prosecution.

Compensatory allowance
A sum paid in the form of an annuity or capital sum by a person to his or her former spouse following a divorce.

Any person (in prison or at liberty) who is the subject of a criminal prosecution other than a criminal one (i.e. for a misdemeanour or a contravention).

A set of formalities to be completed in order to act before a court before, during and until the end of the trial.

The moment when a case is judged by a court.

Power of attorney
Two possible definitions:
A deed by which one person gives another full power to manage his or her property.
A written document in which one person gives authority to another to act in his place in a particular circumstance.

Public Prosecutor
Magistrate who is the head of the public prosecutor’s office at a Court of Appeal or the Court of Cassation.

Public Prosecutor
A magistrate who is the head of the public prosecutor’s office (also called the “Ministère Public”) at a Tribunal de Grande Instance.

Share of expenses.

Action allowing a new examination of a judicial decision. In France, there are two types of appeal: ordinary and extraordinary

– Ordinary remedies :

appeal: to reform or annul a decision of a court of first instance;
opposition: open to a litigant against whom a decision has been rendered by default (allowing him to have the case returned by the court that has already ruled);

– Extraordinary remedies:

third party opposition: exercised by an interested third party who was neither a party nor represented at the trial;
the appeal for review: allows a criminal or civil trial to be retried in the light of new facts;
Appeal to the Court of Cassation: annuls or confirms a decision given at last instance by verifying the correct application of the law.

Waiver of an acquired right.

Cancellation of a contract by its signatories or a judge.

Two definitions are given:

When a person goes back on a decision he or she has made. A judge cannot retract (change) a decision once it has become final;

Refusal to benefit from an acquired right.

Cancellation of an act.

A procedure carried out by a bailiff on a debtor’s property at the request of the creditor. It guarantees the payment of a debt.

A procedure carried out by a bailiff, at the request of a person who is owed money, to seize a sum of money from a bank account.

A procedure carried out by a bailiff, at the request of a person owed money, to seize a sum of money from a bank account. It allows a creditor, with only his writ of execution, to have a sum of money immediately allocated to his debtor, up to the amount owed to him; he does not then enter into competition with the other creditors.

Disciplinary sanction
A measure decided by an employer against an employee.

Refers to magistrates who decide on disputes submitted to them (judge or magistrate of the court), as opposed to magistrates of the public prosecutor’s office, who demand the application of the law.

Subsidy: see alimony

A person who, under oath, exposes to the law facts of which he has knowledge. This person is obliged to go to the summonses that are addressed to him, to answer without ambiguity, nor voluntary omission to the questions which are put to him by the judge.

He or she must indicate whether the facts or comments he or she relates occurred in his or her presence. If not, they must specify the conditions and circumstances of their information. In the event of false testimony, the witness may be prosecuted for perjury. The witness may receive compensation on request.

A written agreement by persons who, by mutual consent, decide to abandon all or part of their claims in order to put an end to the dispute between them.

A court composed of one or more judges, whose task is to judge.

Administrative Court
A court separate from the judicial courts, responsible for resolving disputes involving an act or decision of the administration.

Social Security Tribunal
Court specialising in disputes concerning Social Security bodies (illness, pensions, etc.).

Commercial Court
Court composed of judges elected by merchants, which decides disputes between merchants.

Tribunal des Conflits
High court whose mission is to resolve conflicts of jurisdiction between the courts of the judicial order and the administrative courts.

Tribunal Correctionnel
A court of the Tribunal de Grande Instance responsible for judging offences and, where appropriate, for ruling on claims for compensation from civil parties (i.e. people who consider themselves to be victims).

Tribunal de Grande Instance
There are two sets of panels within the Tribunal de Grande Instance:

The civil panels: courts responsible for judging civil cases involving sums of more than €10,000. These courts are the only ones to judge cases related to civil status, family and property;

Criminal courts: when it tries a crime, the Tribunal de Grande Instance is called “Tribunal Correctionnel”.

Tribunal d’Instance
A single-judge court, which is designed to settle simple disputes, usually involving sums of between €4,000 and €10,000.

Maritime Commercial Court
A special court which judges certain offences and contraventions provided for and punished by the Merchant Navy Penal Code.

Tribunal Paritaire des Baux Ruraux
Specialised court responsible for judging disputes relating to farmers and more specifically rural leases.

Police Court
When the Tribunal d’Instance rules on criminal matters, it is called “Tribunal de Police”. It is composed of a single magistrate, who judges contraventions.

Juvenile Court
Court responsible for judging offences committed by minors. It is composed of the Juvenile Judge (who presides) and two lay assessors, and sits outside the presence of the public.

This is the right of ownership that a person exercises over a property belonging to him or her. It is divided into two distinct legal situations:

On the one hand, bare ownership, which is the right to dispose of one’s property as one pleases, and possibly to modify or destroy it,

on the other hand, the “usufruct” which is the right to use the property or to receive the income from it, for example, in the case of real estate, to receive rent, and if the usufruct relates to bonds, to receive interest, and in the case of shares in a commercial company, to receive dividends.

These two elements may have different owners and on some occasions they may be combined in one hand. For example, when the usufruct ends, or in the opposite direction, when the usufructuary acquires the rights of the bare owner.

The Civil Code regulates the relationship between the usufructuary and the bare owner and also regulates their relationship with third parties. In condominium law, this situation raises the problem of the representativeness of the lots on which a usufruct right is based (see Article 23 of the law of 10 July 1965 on the status of condominiums and Articles 6 and 64 of Decree No. 67-223 of 17 March 1967 for the application of this law).

When the usufruct relates to consumable items, it is called “quasi-usufruct”. In this case, the usufructuary may use the thing for his or her own purposes, provided that he or she returns things of the same kind and in the same number or quantity at the end of the usufruct period.

In the area of inheritance, with regard to the rights of a surviving spouse against whom no divorce or legal separation has been granted, the recent provisions of the Civil Code have modified the previous situation or clarified principles that were not previously included. Thus the Code provides that any usufruct belonging to the spouse on the property of the predeceased, whether resulting from the law, a will or a gift of future property, gives rise to an option to convert it into a life annuity, at the request of one of the bare owner heirs or of the successor spouse himself. The conversion option cannot be waived. The co-heirs may not be deprived of it by the will of the predeceased.

In the absence of an agreement between the parties, the request for conversion is submitted to the judge. It may be submitted until the final partition. If it is granted, the judge determines the amount of the annuity, the securities to be provided by the debtor co-heirs and the type of indexation that will maintain the initial equivalence of the annuity to the usufruct.

The adjective “vacant” is a word of Latin origin meaning “empty”, used to describe premises that have no occupant or, more precisely, to describe property that has no owner: in this case, the property is also said to be ownerless. The latter expressions can be found in articles 539 and 713 of the Civil Code concerning the Public Domain, and 811 and following of the Civil Code concerning estates said to be vacant because they have not been claimed or to which the heirs have all renounced. See the section on “escheatment” on this subject.

“Vacant estates and escheated estates” is the new title V of Book III of Title I of the Civil Code resulting from Law n° 2006-728 of 23 June 2006 on the reform of successions and gifts (art. 809 and following). At the request of any person who was administering all or part of the deceased’s assets on his behalf, any other interested person or the Public Prosecutor’s Office, the judge entrusts the curatorship of the vacant estate to the Estates Department. The trustee carries out all acts of conservation and administration and proceeds with or arranges for the sale of the property until the liabilities are settled. The net proceeds from the realisation of the remaining assets are deposited. The heirs, if they present themselves within the time limit for claiming the estate, are entitled to exercise their right to this product. When the State claims the estate of a person who dies without an heir or an abandoned estate, it must apply to the court for possession. The escheatment of the estate ends if an heir accepts the estate.

The word “vacancy” is also used in labour law or administrative law to mean that a job is not filled (“vacancy”) and also to refer to the period during which the employee is legally allowed to leave his job temporarily.

The word “vacation” refers to the unit of working time on which the remuneration of certain public officers or professionals is calculated. They are then said to be paid “by the shift”. It is also the salary paid to certain people hired by a public administration to carry out a specific task, generally for a limited period of time, and who are known as “vacataires”.

Used in the plural, the term was formerly used in the language of the Court to refer to the period of annual leave during which the Courts stopped holding hearings. This was known as “vacations” or “judicial holidays”. During this period, hearings were held only for urgent cases by a small number of judges appointed for this purpose by the President of the court. These judges constituted the “Chambre des vacations” designed to hold “vacations hearings”. This system has now disappeared, and judges, like court staff, take their leave in rotation.

The term “security” covers, on the one hand, shares representing contributions made by investors in partnerships, shares in loans issued either by the State or local authorities or by commercial companies, and on the other hand, the rights attached to the ownership of shares in these companies. This terminology is used irrespective of whether the securities are materialised or not. Under the guardianship regime, whether it is the guardianship of minors or the guardianship of protected adults, the management of securities is subject to special rules.

Decree 2005-112 of 10 February 2005 makes various amendments to Decree 67-236 of 23 March 1967 on commercial companies, in particular on securities. For companies whose equity securities are admitted to trading on a regulated market and insofar as the securities to be issued immediately or in the future are comparable to them, the issue price is at least equal to the weighted average of the prices of the last three trading sessions prior to its determination, possibly reduced by a maximum discount of 5%.

The decree also amends the provisions relating to the content and publication of the notice informing shareholders of the issue of new shares and the terms and conditions thereof. The decree also specifies a certain number of time limits, including the priority subscription period, as well as the maximum duration of the suspension of the possibility of obtaining equity securities by exercising rights attached to securities giving access to the capital. It specifies the content and publication of the notice by which the board of directors or the management board suspends the possibility of obtaining equity securities. The text provides for the appointment of contribution auditors in the event of the issue of preference shares to named shareholders and defines the content of their report. It modifies the deadline for publication of the report of the contribution auditors in the case of contributions in kind or the stipulation of particular advantages.

The text also makes various formal amendments to paragraph 1 of Section V of Chapter IV of Title I of the 1967 Decree. The decree then organises the right of opposition of creditors in case of conversion of preference shares into shares resulting in a reduction of capital not motivated by losses. It determines the procedures for convening special meetings of holders of shares of a given class. The text specifies the content and publication procedures for the reports of the board of directors or the management board and the auditor on the issue, redemption and conversion of preference shares, as well as the special report on the company’s compliance with the special rights attached to preference shares.

Finally, the 2005 decree inserts into the 1967 decree a section devoted to the issuance of securities giving access to the capital. The text specifies the measures that the company must take to protect the interests of the holders of these rights when it decides to issue, in any form, new capital securities with preferential subscription rights reserved for its shareholders, to distribute reserves, in cash or in kind, and share premiums or to modify the distribution of its profits by creating preference shares. It also sets out the methods for calculating the cash payment to holders of securities giving access to the capital when the exercise of their rights results in a fractional share.

See the text of this decree in JCP, G, 2005, n° 8, act. 104 and in the JO of 12 February 2005, p. 2404 and on the Legifrance website.


A “sale” is an agreement by which a person known as the “seller” transfers to another person known as the “buyer” his property rights over a thing or a value belonging to him. The form of the contract does not affect its classification, and it may be either in writing or simply a verbal agreement. The assignment may relate to tangible property or rights. The “assignment of a claim” or “transfer of a claim”, the assignment of bare ownership or usufruct of an asset or a set of assets and rights, such as the assignment of a business, a customer base or a patent, constitute sales. Certain types of sale are subject to special regulations.

A contribution to a company or an exchange is a sale.

Certain types of sales are subject to specific regulations, such as

– the sale of business assets (L. 17 March 1909, D. 28 August 1909).

– unpacking sales (L. 30 December 1906 and D. n°62-1463 of 26 November 1962).

– maritime sales (L. n°69-8 of 3 January 1969).

– the offer of sale known as “teleshopping” (L. n°88-21 of 6 January 1988).

– door-to-door sales (L. n° 72-1137 of 22nd December 1972).

– direct sales to consumers (L. n°73-1193 of 27 December 1973 and D. n°74-429 of 15 May 1974).

– sales at a loss and sales with premiums (L. n°63-628 of 2 July 1963 and Order n°86-1243 of 1 December 1986).

– sale on credit (D. n°55-585 of 20 May 1955 and D. n°56-775 of 4 August 1956).

Certain clauses included in sales are also subject to regulation, such as

– exclusivity clauses (L. 14 October 1943).

– clauses relating to prices, competition, refusal to sell and discriminatory practices (Ord. n° 45-1483 of 30 June 1945, Ord. n°86-1243 of 1 December 1986 and D. n°86-1309 of 29 December 1986).

– unfair terms (L. n°78-23 of 10 January 1978).

As for public sales, there are two types. A distinction is made between

on the one hand, public sales carried out amicably or voluntarily when, for example, the co-divisors agree to have an asset that cannot be divided in kind sold by auction before a notary,

on the other hand, forced sales in the event that a debtor does not voluntarily comply with a court decision requiring him to pay sums liquidated by a judgment that has become enforceable. See Decree No. 2006-936 of 27 July 2006 on procedures for the seizure of property and the distribution of the price of real estate.

As regards public sales of movable property, after a summons and various advertising measures, auctions are held either in an auction room or on a public market by an auctioneer or, in certain cases, by a sworn broker. Disputes concerning the distribution of the price are brought before the enforcement judge and creditors who have not initiated the proceedings may object to its delivery to the seller. The funds resulting from the forced sale are then distributed to the creditors. Pending a general overhaul of enforcement procedures, the provisions of Articles L251-3 et seq. of the former Code of Civil Procedure still apply to the seizure of property.

Concerning international sales, the Court of Cassation ruled (1st CIV. – 25 October 2005, BICC n°633 of 1 February 2006) that the Vienna Convention of 11 April 1980, instituting a uniform law on the international sale of goods, constitutes the French substantive law; as such, it is binding on the French judge, who must apply it subject to its exclusion, even tacit, according to article 6 of the latter convention, when the parties have placed themselves under the authority of a given law. All the parties having invoked and discussed without reservation the guarantee of the thing sold according to article 1641 of the Civil Code, have, in knowledge of the international nature of the sales in question, voluntarily placed the solution of their dispute under the regime of the French internal law of sale, the Court of Appeal not being obliged to seek to determine whether the Vienna Convention should apply.

Defects in consent

There can only be a valid commitment if, at the time of the commitment, the party contracting is free of all constraints. The validity of any obligation presupposes first of all that the consent has been given by a person capable of expressing a lucid will.

Error, fraud or violence are defects of consent. If the consent of the author of the commitment is found to be vitiated, the legal act, whether unilateral or synallagmatic, is liable to be annulled.

To nullify a contract is a serious matter because it calls into question the security of transactions. It is therefore up to the party claiming the invalidity of the act to establish that without the intervention of error, fraudulent manoeuvres or acts of violence, he would not have contracted. For a proper analysis of the case, the judges shall take into account the personality of the person who puts forward such a plea and the factual circumstances which may render the argument thus put forward plausible. In particular, they must consider whether the intensity of the event constituted an insurmountable obstacle to the exercise of the free will of the person claiming to have been deprived of it. The breach of the pre-contractual obligation to provide information may constitute a defect in consent as ruled by the Cour de cassation (Com. 10 February 1998, Bull. 1998, IV, n° 71, p. 55) and the Court of Appeal of Montpellier (2nd Ch, See also on the limitation period applicable in case of nullity of a will due to insanity of mind the decision of the First Civil Chamber of 11 January 2005 (1st CIV. – 11 January 2005, BICC n°15 April 2005).

Financial definition: A right that one acquires and which allows one to buy or sell a share at a given price during a given period.

Commercial definition: promissory note subscribed by a trader and secured by goods

Grégory DAMY, lawyer in Nice