Thursday, September 3, 2020

Chapter 5. Hire of a Business

 Chapter 5. Hire of a Business

Art. 194. – Civil Code applicable.

1.    A business may be let out for hire.

2.    Without prejudice to Art. 195-205 of this Code, the provisions of Art. 2896-2974 of the Civil Code shall apply where a business is let out for hire.

Art. 195. – Publication of the contract of lease.

1.    A contract of lease shall not affect the rights of third parties unless it is in writing and it is published, on the application of either party in the official commercial gazette and in a newspaper empowered to publish legal notices circulating at the place where the head office of the business is situate.

2.    Notices published under sub-art. (1) shall show:

a.    the names and addresses of the lessor and lessee;

b.    the date and nature of the contract;

c.    the objects and address of the business;

d.    the period of time for which the contract ill entered into.

Art. 196. – Registration.

    The owner of the business let out for hire shall cause his name to be struck off and the lessee shall cause his name to be entered in the commercial register in accordance with the provisions of Title IV of this Book.

Art. 197. – Liability of the lessor.

    Until the provisions of Art. 195 and 196 have been complied with and within one month from such formalities having been completed, the owner shall be jointly and severally liable with the lessee for any debt incurred by the lessee in operating the business.

Art. 198. – Particulars on business papers.

    The contract of lease may be cancelled where the lessee fails to add the word “lessee” on all his business papers.

Art. 199. – Duties of lessee.

    The contract of lease may be cancelled where the lessee fails to pay the agreed rent on the agreed day or does not operate the business with the care due by a good trader and in accordance with the objects of such  business.

Art. 200 – Guarantee.

1.    In addition to the rent, the contract of .lease may provide that the lessee shall produce sureties to guarantee the fulfilment of his obligations towards the lessor or third parties.

2.    Notwithstanding any provision to the contrary, the sureties shall be fully returned to the lessee upon the termination of the lease, where the lessee has fulfilled his obligations and no application is made by the creditors within the period of time specified in Art. 202 (3).

Art. 201. – Lessee personally to carry out his duties.

    The lessee may not assign the contract of lease without the written consent of the lessor, as a contract of lease is made on the basis of the personal qualifications of the lessee.

Art. 202. – Termination of contract of loose to be published.

1.    Where the contract of lease terminates, notices to this effect shall be published as provided in Art. 195 (1).

2.    Notices published under sub-art (1) shall show:

a.    the names and addresses of the lessor and lessee;

b.    the objects and address of the business;

c.    the date of termination of the contract;

d.    the amount of the guarantee under Art. 200, if any.

3.    The owner of the business shall be liable to third parties where the sureties under Art. 200 are returned to the lessee earlier than one month from the publication of the last notice.

Art. 203. – Debts of lessee shall become due.

    Any claim which a creditor may have against the lessee shall become due on the termination of the contract of lease.

Art. 204. – Prohibition of trade by the lessor.

1.    During the currency of the contract of lease, the owner of the business may not compete with the lessee by creating or acquiring a business having similar objects.

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

Art. 205. – Prohibition of trade by the lessee.

1.    The parties may agree that, upon the termination of the contract of lease, the lessee shall not compete with the owner of the business by carrying on a trade similar to the trade carried on by the owner.

2.    Any such prohibition shall not be effective for more than five years.

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