Civil Code > TITLE XVII. CONTRACTS FOR THE CUSTODY, USE OR POSSESSION OF CHATTELS 1

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TITLE XVII. CONTRACTS FOR THE CUSTODY, USE OR POSSESSION OF CHATTELS

Chapter 1. General Provisions

Art. 2698 – Scope of this Title.

(1) Where, under the terms of a contract, a person is in possession of a chattel the custody or possession of which has been transferred to him by his contracting party, his rights and obligations in his dealings with his contracting party shall be as provided in this Title.

(2) Where provided by law, the same provisions shall apply to the relations between the owner and holder of a chattel regardless of any contract.

Art. 2699 – Immovables.

(1) The provisions governing the hiring of immovables are laid down in the Title of this Code regarding “ Contracts relating to immovables” (Art. 2896-3018).

(2) The provisions of this Title relating to free loans shall apply where the use or possession of an immovable is given to another free of charge (Art. 2701-2726 and 2767-2778).

Art. 2700 – Owner.

(1) For the purpose of this Title, the word “owner” means the person who has transferred the possession of the chattel.

(2) The provisions of this Title shall apply by analogy where the right which he ahs or claims to have on the chattel is one other than ownership.

(3) For the purpose of this Title, the holder shall be assimilated to the possessor.

Art. 2701 – Obligation to deliver.

The owner shall deliver the chattel with its accessories to the holder in fit state for the use for which it is intended by its nature or under the contract.

Art. 2702 – Reference to the rules of sale.

The place and time of delivery shall be governed by the provisions relating to sale.

Art. 2703 – Defective chattel. – 1. Rescission of the contract.

(1) Where, at the time of its transfer to the holder, the chattel is affected by a defect which appreciably diminishes its usefulness to the holder or makes it more difficult or costly to preserve it, the holder may apply for the rescission of the contract.

(2) The holder shall have the same right where the defect occurs or becomes apparent after delivery of the chattel.

(3) A particular usefulness to the holder shall not be taken into account unless the owner knew or should have known thereof on the making of the contract.

Art. 2704 -2. Damages.

(1) The owner shall make good any damage which the holder has suffered owing to the defect of the chattel, where he knew or should have known of the defect on delivering the chattel to the holder and failed to inform the latter accordingly.

(2) The same shall apply where the defect arises during the performance of the contract through the default of the owner.

Art. 2705 – 3. Contractual warranty.

The holder may apply for the rescission of the contract and the making good of the damage caused to him by the chattel where the chattel does not possess or ceases to possess a quality the existence of which was guaranteed by the owner.

Art. 2706 – 4. Holder knowing of defect.

(1) The owner shall not warrant against a defect which he shows was known to the holder on the making of the contract.

(2) Any express warranty given by the owner in such case shall be of no effect.

Art. 2707 – Dangerous defect.

(1) Where the chattel is in such a state as seriously to endanger the life or health of the holder, of members of his household or of his employees, the holder may apply for the rescission of the contract notwithstanding that he knew of the defect of the chattel on the making of the contract.

(2) Any stipulation to the contrary shall of no effect.

Art. 2708 – 6. Non-liability clause.

A stipulation whereby the owner excludes or limits his liability for defects of the chattel shall be of no effect where he has fraudulently concealed the defects are such as to make the chattel useless to the holder.

Art. 2709 – Peaceful possession.

The owner shall guarantee the holder the peaceful possession of the chattel during the currency of the contract.

Art. 2710 – Modification to the chattel.

The owner may not make any modification to the chattel that would render its possession less advantageous or more costly for the holder.

Art. 2711 – Disturbance.

(1) The owner shall not be bound to guarantee the holder against disturbance of his possession by third parties who do not claim a right on the chattel.

(2) The holder may take action against such third parties in his own name.

Art. 2712 – Encumbrances and taxes.

Encumbrances and taxes on the chattel shall be borne by the owner.

Art. 2713 – Custody and preservation of the chattel.

(1) The holder shall ensure the custody and preservation of the chattel.

(2) He may not change the way in which the chattel is used without the owner’s consent.

Art. 2714 – Duty to inform the owner.

The holder shall without delay inform the owner of all matters requiring his attention, such as urgent repairs, discovery of defects, encroachments, disturbances or damage caused by third parties to the chattel.

Art. 2715 – Cost of preservation and upkeep.

(1) Where the preservation or upkeep of the chattel entails expenses which are not to be borne by the holder, the latter shall inform the owner accordingly.

(2) The holder shall be entitled to the reimbursement of expenses he incurs in urgent eases, provided he immediately informs the owner accordingly.

Art. 2716 – Owner’s verification.

(1) The owner may at any time satisfy himself that the holder complies with his obligations under the contract.

(2) Such verification shall be exercised in a reasonable and non-vexations manner without causing the holder undue trouble.

Art. 2717 – Claim by a third party to the chattel.

(1) Where a third party claims the ownership of or a right on the chattel, the holder shall immediately inform the owner thereof under penalty of damages.

(2) Where the third party institutes legal proceedings, the holder may demand to be dismissed from the case and that the dispute be settled as between the third party and the owner.

(3) In such case, he may release himself from his liability to return the chattel by depositing it at the owner’s expense under conditions fixed by the court.

Art. 2718 – Obligation to restore.

(1) The holder shall return the chattel in the state in which and at the place where he received it.

(2) The state in which the holder received the chattel shall be specified in an inventory drawn up by the parties.

(3) Failing such inventory, the chattel shall be deemed to have been in good condition when the holder received it.

Art. 2719 – Dispossession of the holder.

(1) Where the holder has been dispossessed of the chattel in consequence of an event for which he is not to blame, he shall be released from his obligation to return it.

(2) He shall inform the owner immediately, under penalty of damages, of the event in consequence of which he ceased to be in possession of the chattel.

(3) The owner shall be entitled to anything which the holder receives in exchange for the chattel as a result of the dispossession and shall be subrogated to the holder’s rights.

Art. 2720 – Loss or deterioration of the chattel. – 1. Gainful custody.

(1) Where he receives compensation for taking charge of the chattel or he is authorized to make use of it or he in any way derives profit from it, the holder shall be liable where the chattel is lost or deteriorates after he has received it.

(2) He shall also be liable for any loss or deterioration caused by a person whom he has authroised to make use of the chattel, even temporarily.

Art. 2721 – 2. Limit of liability.

(1) The holder shall not be liable only where he shows that the loss or deterioration was due to force majeure.

(2) He shall not be liable where he shows that the loss or deterioration was due to the decay, dilapidation or other defect of the chattel.

(3) He shall not be liable where deterioration is due to the normal and authorised use of the chattel.

Art. 2722 – 3. Custody without consideration.

(1) Where he drives no profit form the chattel and he has taken charge of it in the sole interest of the owner, the holder shall not be liable for the loss or deterioration of the chattel unless it is due to his own default or occurs after he has been summoned to return the chattel.

(2) The holder shall not be at fault unless he exercised less care in keeping and preserving the chattel than he exercises in the custody and preservation of his own property.

Art. 2723 – Holder in default.

Where the holder has been summoned to return the chattel, he shall not be liable where he shows that the chattel would have been lost or deteriorated in like manner, had he returned it to the owner on the due date.

Art. 2724 – Improvements made to the chattel. – 1. Right to indemnity.

(1) The holder shall not be entitled to any indemnity in respect of improvements he has made to the chattel.

(2) Where such improvements have been made with the owner’s consent, the holder may however demand the reimbursement of the amount he has spent or of the surplus value of the chattel at the time of its return, whichever is the less.

Art. 2725 – 2. Compensation and right of removal.

(1) Even where the holder is not entitled to nay indemnity, he may set off against any loss of value caused by deterioration for which he is liable but which is not due to his default, any increase he has brought about in the value of the chattel.

(2) The holder may remove the improvements he has made to the chattel, if this can be done without damaging it.

Art. 2726 – Lien.

(1) The holder may refuse to return the chattel to the owner until the latter has paid any indemnities due under this Chapter.

(2) He may not refuse to return the chattel pending payment of a claim to which he is entitled on another ground.

(3) Where he denies that he owes the holder an indemnity, the owner may demand that the chattel be returned to him on his providing adequate security for the discharge of any liability he may have incurred.

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