Thursday, September 3, 2020

Chapter 2. Elements of a business

 Chapter 2. Elements of a business

 

Section 1. Consistency of a Business

 

Art. 127. – Goodwill and incorporeal elements.

1.    A business consists mainly of a goodwill.

2.    A business may consist of other incorporeal elements such as:

a.    the trade-name;

b.    the special designation under which the trade is carried on;

c.    the right to lease the premises in which the trade is carried on;

d.    patents or copyrights;

e.    such special rights as attach to the business itself and not to the trader.

 

Art. 128. - Corporeal elements.

 

A business may consist of corporal elements such as equipment or goods.

 

Art. 129. - Assets and liabilities.

 

1.    A business shall normally not include the assets and debts of the trader, with the exception of the right to the lease of the premises.

2.    Nothing in this Article shall affect the special rules provided in Art. 2587 of the Civil Code and in Art. 159 and 673 of this Code.

 

Section 2. Goodwill and Unfair Commercial Competition

 

Art. 130. - Definition of goodwill.

 

The goodwill results from the creation and operation of a business and is of a value which may vary according to the probable or possible relations between a trader and third parties who may require from him goods or services.

 

Art. 131. - Preservation of goodwill.

 

A trader may preserve his goodwill by instituting proceedings for unfair competition or by setting up the legal or contractual prohibitions provided in Art. 30, 40, 47, 55, 144,158, 159,204 and 205 of this Code.

 

Art. 132. - Unfair commercial competition.

 

A trader may claim damages under Art. 2057 of the Civil Code from any person who commits an act of competition which amounts to a fault.

 

Art. 133. - Cases of unfair competition.

 

1.    Any not of competition contrary to honest commercial practice shall constitute a fault.

2.    The following shall be deemed to be acts of unfair competition:

a.    any acts likely to mislead customers regarding the undertaking, products or commercial activities of a competitor;

b.    any false statements made in the course of business with a view to discrediting the undertaking, products or commercial activities of a competitor.

 

Art. 134. - Effect of unfair competition.

 

1.    The court may, in cases of unfair competition:

a.    Order  that damages be paid  by the unfair competitor; and

b.    Make such: orders as are necess8l!y to put an end to the unfair competition.

2.    The court may in particular:

a.    Order the publication, at the costs of the unfair competitor, of notices designed to remove the effect of the misleading acts or statements of the unfair competitor, in accordance with Art. 2120 of the Civil Code;

b.    Order the unfair competitor to cease his unlawful acts in accordance with Art. 2122 of the Civil Code.

 

Section 3. Trade-Names

 

Art. 135. - Definition.

1.    A trade-name is the name under which a person operates his business and which clearly designates the business.

2.    The relevant provisions of Book II of this Code shall apply to firm-names used by business organisations.

 

Art. 136. - Family Name of trader or assumed name.

 

The trade-name' may be the trader's family name, with or without his  surname, or an assumed name, but all business papers shall be signed by the trader in his own name.

 

Art. 137. - Trader's Name.

 

1.    Every trader may carry on his trade under his family name, with or without his patronymic:

Provided that Art. 45 of the Civil Code shall apply where such name or patronymic is likely to create confusion in a manner prejudicial to the interests of another trader.

2.    Where proceedings for unfair competition are instituted by reason of confusion created by the use of the trader's name, the court may order that damages be paid by the trader who created confusion and may, in addition, order such trader to include his surname or patronymic in his trade-name so as to obviate confusion.

 

Art. 138. – Assumed name

 

1.    Every trader may carry on his trade under an assumed name provided such name is not likely to create confusion in a manner prejudicial to the interests of another trader.

2.    Where proceedings for unfair competition are instituted by reason of confusion created by the use of an assumed name, the court may order that damages be paid by the trader who created confusion and may, in addition, prohibit such trader from using the assumed name.

 

Art. 139. - Assignment of trade-name.

 

1.    The trade-name may not be assigned except together with the business to which it refers.

2.    The trade-name may not be used by the new trader unless it is followed by the name of such trader and by the words "successor" or "lessee". The new trader may only use his own name in signing commercial papers.

 

Section 4. Distinguishing Marks

 

Art. 140. - Definition.

1.    A distinguishing mark is the name, designation, sign or emblem affixed on the premises where the trade is carried on which clearly designates the business.  

2.     The use of a distinguishing mark is not compulsory.

 

Art. 141.  - Choice of distinguishing mark.

 

1.    A trader may choose any distinguishing mark.

2.    Damages may be claimed on the ground of unfair competition where the distinguishing mark is likely to create confusion in a manner prejudicial to another trader having used an identical or similar distinguishing mark.

 

Section 5. Right to the lease of the premises

 

Art. 142 – Civil Code applicable.

 

Without prejudice to the provisions of this Section, the provisions of the

Civil Code shall app1y to the right to the lease of the premises in which the trade is carried on.

 

Art. 143. - Nature of the trade carried on.

 

Where the contract of lease specifies the nature of the trade to be carried on by the lessee, the contract may be cancelled where the lessee carries on a different trade.

 

Art. 144. - Prohibition of trade by the lessor.

 

1.    After the contract of lease has been entered into, the lessor may not carry on in the same building a trade similar to the trade carried on by the lessee.

2.    Where the lessor disregards the prohibition provided in sub-art. (1 , he shall be liable for damages and his business may be closed.

 

Art. 145. - Prohibition from assigning or sub-letting.

 

1.    Notwithstanding the provisions of Art. 2959 of the Civil Code, any provision in the contract of lease which prevents the lessee from assigning the contract of lease or from sub-letting the premises to the person who buys his business, or which makes such assignment or sub-lease dependent on the lessor's consent, shall be of no effect.

2.    Any provision which prevents or restricts a trustee in bankruptcy from exercising his rights under Art. 1062 of this Code shall be of no effect.

 

Art. 146. - Termination of contract of lease.

 

1.    Where a business is mortgaged, the lessor shall inform the creditors when he terminates the lease or he intends amicably to terminate the lease or to enforce a provision for termination made in the contract.

The lease shall terminate not earlier than one month following such notice to the creditors.

2.    Where notice is not given, the termination of the contract of lease shall not affect creditors having secured rights on the business.

 

Art. 147. - Lessee declared bankrupt.

 

1.    Any clause in the contract of lease providing that the contract shall terminate as of right where the lessee is declared bankrupt shall be of no effect.

2.    Where the lessee declared bankrupt, the trustee may exercise his rights under Art. 1040 and 1062 of this Code and the lessor may exercise his rights under Art. 1060 and 1061 of this Code.

 

Section 6. Patents and Literary or Artistic Copyright

 

Art. 148. - Patents.

1.    A business may consist of patents relating to registered inventions, trade-marks, designs and models.

2.    Patents shall be subject to the provisions of special laws.

 

Art. 149. - Literary and artistic copyright.

 

1.    A business may consist of literary or artistic copyright.

2.    The provisions of Art. 1647-1674 of the Civil Code shall apply to literary or artistic copyright.

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