Newsletter Lexunion Nº7 – 3T 2016

We are glad to let you know that the 7th edition of the Newsletter of our network LEXUNION is now available.

It’s a free quarterly newsletter that deals with legal and tax developments in member countries of the Lexunion network, with the purpose to help french compagnies and persons clients of our network.

It can be downloaded on this link: Newsletter Client Lexunion 7/2016_EN-FR


1/ A reform of contract law, the general regime and proof of obligations was published in the Official Journal on February 11, 2016 

The text will be applicable from October 1, 2016. It has several objectives: « to modernise, simplify, improve clarity, improve accessibility to general contract law« ; « to guarantee legal security and the effectiveness of the standard« .

Amongst the modifications are the following:

  • the introduction of a pre-contractual duty to provide information (new article 1112-1),
  • the disappearance of cause as a condition of contract validity,
  • the introduction of a definition of a preference agreement and solutions relative to its breach,
  • the introduction of a definition of the promise to sell and improvement of the effectiveness of unilateral promises,
  • the introduction of abuse of weakness as a case of violence that may justify action to invalidate a contract (new article 1143),
  • the opening of contract review for frustration of purpose (new article 1195),
  • compulsory enforcement in kind associated with a reservation for the case where there is a manifest disproportion between its cost for the debtor and its advantage for the creditor (new article 1221),
  • the modification of the terms and conditions for the enforceability of transfers of receivables (new article 1323),
  • the recognition of the transfer of contract and the transfer of debt (new articles 1216 to 1216-3 and 1327 to 1328-1),
  • the mechanism of representation, modification of the regime covering nullity,…


2/ Tax treatment of life insurance contracts subscribed by a spouse, not settled upon the first death and financed with funds common to the couple.

The Ciot ministerial response (February 23, 2016) abolishes death duties at the first death concerning half of the value of the contract transferred (nevertheless under civil law) into the estate.



The financing of the enterprises/companies guaranteed by transfer of the real estate under condition of non-performance

The Law decree May 3, 2016 n. 59, converted into Law no. 119/2016, provides a new guarantee between financing bank and financed enterprise/company, concerning the transfer of immovable property (owned by the enterprise/company debtor or by a third party) under the condition of the non-performance of the borrower, thus avoiding a court enforcement proceeding.

Property type: the real estate – object of guarantee can be of any kind (land, industrial building or residential building) but it can never be the main habitation of the borrower, his spouse or his relatives and children to the third grade.

The procedure of transfer of the property to the bank: the asset – subject of the guarantee – remains the property of the entrepreneur until he honours the payments, and passes the property to the bank if the granted loan is not repaid, retroactively, i.e. from the moment when the warranty has been registered in the Land Registers.

The procedure: When the bank verifies the non-performance of the debtor it should:

– notify the financed company about intention to invoke the effects of the pact of transfer of ownership;

– within 60 days of such notice, contact the Court for the appointment of an expert in order to obtain a valuation with the sworn report of the property value;

– promptly communicate such value to the interested parties: at this moment the transition of ownership of the property by the borrower to the bank is verified if the value is less than the debt; if it is higher, the transition takes place only when the bank pays to the debtor the difference between the estimated value and the amount of debt.



Sharing of professional death and disability insurance in case of divorce

The Swiss Civil Code, like the federal law on private international law, was modified concerning the sharing of professional death and disability insurance in case of divorce, with applicability from January 1, 2017.

In international contexts, it is now provided that, in case of divorce decided by the Swiss courts, only Swiss law shall apply, with no further exceptions due to any foreign nationality of spouses.

In matters of the sharing of professional death and disability insurance and when claims are directed against a Swiss institution, the competence of the Swiss courts is exclusive.

In case of a foreign judgement, the Swiss courts have exclusive competence to modify or supplement the said judgement in the case of claims against Swiss death and disability insurance institutions. Competence may even be given to the court to which the institution’s head office is subject. Swiss law also governs further proceedings or proceedings brought in modification of a divorce.■