Resolutory Clause 'If So Pleases': Lease Termination Impossible Without Firm Agreement

Imagine: you own commercial premises in Bully-les-Mines. Your tenant has not paid rent for three months. You serve a notice to pay (formal demand) reproducing the resolutory clause (a clause providing for automatic termination of the lease in case of non-payment) set out in the contract. But this clause is worded as follows: the lessor may terminate the lease 'if it so pleases him'. You think you are safe: the tenant has one month to pay, otherwise the lease is automatically terminated. But the Court of Cassation, in a judgment of 24 March 1999, ruled otherwise. Why? Because the phrase 'if it so pleases him' means that the lessor reserves an alternative: either he terminates, or he maintains the lease. In this case, no firm offer of termination is made to the tenant in the notice. Result: the notice is ineffective. This decision, which may seem technical, has very concrete practical consequences for landlords and tenants. Analysis.

The Facts: A Story Like Many Others

The case began in Paris, but it could just as easily have taken place in Liévin or Béthune. The company Unicomi owns premises used as offices. It leases them to a tenant. In 1995, the tenant stops paying rent. On 7 February 1995, the lessor (landlord) serves a notice to pay on the tenant (a bailiff's act demanding payment within a certain period). This notice reproduces the resolutory clause inserted in the lease. But this clause is worded in a particular way: it allows the lessor to terminate the lease 'if it so pleases him'. In other words, the landlord is not obliged to terminate: he can choose, after the notice, to continue the lease or to end it.

The tenant, for its part, does not pay within the one-month period. It then sues the lessor in court to have the termination of the lease declared (i.e. ask the judge to say that the lease is over). It considers that the notice is valid and that the resolutory clause has taken effect. But the lessor resists: it did not express a firm and unequivocal intention to terminate the lease. The Paris Court of Appeal, on 5 September 1996, rules in favour of the lessor: it refuses to declare the termination. The tenant appeals to the Court of Cassation.

The question is simple: does a notice to pay that reproduces a resolutory clause 'if so pleases' allow the tenant to know with certainty that the lease will be terminated if it does not pay? The Court of Cassation answers no.

The Reasoning of the Court — Analysed

The Court of Cassation, in its judgment of 24 March 1999, dismisses the tenant's appeal. It approves the Court of Appeal for having found that the resolutory clause, accompanied by the wording 'if it so pleases him', was stipulated only in the interest of the lessor. In short, the landlord reserved an alternative: either rely on the clause (terminate the lease) or maintain the lease by pursuing enforcement (demand payment of arrears).

The legal basis? There is no specific article cited, but the decision rests on the interpretation of contracts (Article 1156 of the Civil Code, now Article 1188) and on the principle of unilateral termination. For a resolutory clause to take effect, it must be 'acquired': the debtor (the tenant) must know that, after a certain period, the creditor (the lessor) can terminate without further formality. But if the lessor retains the possibility of waiving the termination, then the notice does not offer a firm termination. In other words, the tenant cannot be sure that the lease will be terminated if it does not pay. It may legitimately think that the lessor will only demand payment, without terminating.

The Court of Cassation here confirms a classic position: a resolutory clause must be precise and must not leave a choice to the creditor after the notice. Note however: this is not a reversal, but a consistent application of contractual rigour. The judges considered that the tenant could not invoke the termination because the clause did not offer it certainty. undefined that landlords must draft their resolutory clauses without ambiguity.

What This Changes for You — Practically

For landlord lessors: if your lease contains a resolutory clause 'if so pleases' or any other wording that leaves you an alternative, your notice to pay may be ineffective. You will not be able to obtain automatic termination of the lease. Concrete example: in Liévin, a landlord of commercial premises rented at €1,200 per month drafts a clause saying 'the lease may be terminated if it so pleases the lessor'. The tenant does not pay for two months. The landlord serves a notice reproducing this clause. The tenant pays after the one-month period. The landlord then wants to terminate the lease: he cannot, because the clause was not firm. He must bring an action for judicial termination (before a judge), which takes several months and costs more.

For tenants: this decision protects you. If you receive a notice with a 'if so pleases' clause, you can challenge the validity of the notice. But be careful: this does not exempt you from paying your rent. You must still pay, otherwise the lessor may seek judicial termination. If you are in this situation, you should check the wording of the clause in your lease. If it is ambiguous, consult a solicitor.

For purchasers of leased property: when acquiring a building with an existing lease, examine the resolutory clause. If it is 'if so pleases', note that you will not be able to rely on a swift termination in case of arrears. You may need to renegotiate the lease or provide for a firmer clause.

undefined, I have come across cases where landlords in Bully-les-Mines lost months because of such clauses. One example: a commercial lease with a standard resolutory clause, but the landlord had added 'if so pleases' without realising it. Result: the tenant contested, and the court ruled in favour of the tenant. The landlord had to pay legal costs and wait a year to obtain termination.

Four Tips to Avoid This Type of Dispute

• Draft a firm resolutory clause with no alternative: use the standard wording 'the lease shall be automatically terminated if the tenant does not pay within one month of a notice to pay' without adding 'if so pleases' or 'on first demand'.
• Have your lease reviewed by a solicitor before signing: a professional will detect ambiguities. The cost (a few hundred euros) is trivial compared to the costs of litigation.
• In case of arrears, act quickly: even if the clause is firm, the notice must be served by a bailiff and must reproduce the clause exactly. Check that the wording 'if so pleases' does not appear.
• If you are a tenant and receive an ambiguous notice: do not pay hastily without advice. Consult a solicitor to see if you can challenge the validity of the notice, but in the meantime, deposit the rent into a blocked account (séquestre) to show good faith.

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Further Reading: Related Case Law and Developments

This 1999 decision is part of a series of rulings requiring firmness of resolutory clauses. For example, the Court of Cassation has held that a clause providing for termination 'in default of payment of a single term' is valid (Civ. 3e, 12 May 1998, No. 96-17.123). But if the clause makes termination conditional on a 'formal notice remaining unsuccessful', it must be precise. In 2005, the Court clarified that the resolutory clause must be 'express and unequivocal' (Civ. 3e, 9 March 2005, No. 03-19.510).

The trend of the courts is therefore towards rigour: judges protect the tenant against clauses that leave uncertainty. For the future, it is likely that 'if so pleases' clauses will become increasingly rare, as solicitors advise against them. But beware: some older leases may still contain this wording. If you are a landlord, check your leases. If you are a tenant, know that you can challenge.

Frequently Asked Questions

1. What should I do if my lease contains an 'if so pleases' clause? You can request a modification of the lease by way of a deed of variation (written agreement between the parties) to replace the clause with a firm clause. If the tenant refuses, you will have to live with this clause.
2. Can I still terminate the lease if the tenant does not pay? Yes, but not through the operation of the resolutory clause. You must apply to the court for judicial termination of the lease for non-payment of rent. The procedure is longer (6 to 12 months) and more costly.
3. What are the time limits for a notice to pay with a firm clause? The notice must give the tenant one month to pay. After that period, if the tenant has not paid, termination takes effect automatically.
4. Can a tenant rely on an 'if so pleases' clause to terminate the lease? No, this clause is stipulated only in the interest of the lessor. The tenant cannot invoke it to obtain termination.
5. What is the risk for a landlord who uses an 'if so pleases' clause? He risks having his notice declared void, and having to pay the costs of the proceedings. He may also be ordered to pay damages if he has abused his right.

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