Communicating General Sales Conditions in the hospitality sector
Terms and conditions of sale in the hotel and catering industry
According to article L 441-1 of the French Commercial Code, general sales conditions are the “sole basis for commercial negotiation”. They contain all the conditions under which you and your customer are bound. It is therefore particularly important that your General Terms and Conditions of Sale contain not only the mandatory clauses defined by law, but also any additional clauses that may protect you in the event of a dispute. Incomplete or poorly drafted General Sales Conditions can backfire.
Mandatory information in the General Terms and Conditions of Sale for services
Elements of price determination
Your general terms and conditions of sale must indicate how your prices are set. For example, for a hotel service, you could specify that prices are set according to room type, number of nights, booking dates, etc., and that the price of each room is available on the establishment’s website.
For a catering service, you can specify that prices are set according to the menu of the day, available on site and/or online, and that these prices include all taxes.
It’s also in this section that you can anticipate additional costs, for adding a bed to a room for example.
Terms of payment
Terms of payment cover a range of information: accepted payment methods, payment deadlines, conditions of application and interest rate for late payment penalties, the amount of the fixed indemnity for collection costs, etc. These clauses are not to be neglected. These clauses are not to be neglected: while they protect you in the event of litigation, they can also deter dishonest partners and prevent disputes.
This section also includes information on deposits and other pre-authorized payments you may be required to make when booking a hotel or restaurant. The general terms and conditions of sale must specify the amount to be paid on reservation, the terms of payment, and any conditions for reimbursement of these sums. Once again, these clauses protect you from cancellations and other dishonest partners.
For more information on pre-authorization in the hotel and restaurant sector, please refer to our article ” Bank imprinting: how to implement it without risk “.
Information specified in article L 111-2 of the French Consumer Code
The French Consumer Code requires service providers to supply their customers and other partners with information on their contact details, their service provision activity and other contractual terms and conditions, the list and content of which are set by decree by the Conseil d’Etat.
Mandatory information in General Terms and Conditions of Sale for consumers
Articles R 111-1 et seq. and R 221-1 et seq. of the French Consumer Code list a range of information that professionals must provide to their consumer customers.
Optional information that can be added to your General Terms and Conditions of Sale
In addition to the compulsory information, the General Sales Conditions may contain a set of clauses which also regulate the relationship between you and your customers or partners.
Cancellation clause
It’s up to you to define the conditions under which you will accept a customer’s cancellation of a hotel or restaurant reservation, and the financial terms involved. In the case of accommodation or catering services, consumers do not have the 14-day right of withdrawal provided for distance contracts.
Customer default clause
Particularly in the hotel sector, this clause can include a security deposit or bank imprint to cover any damage or theft committed by the customer during their stay.
Limitation of liability
It limits the amount of damages that can be claimed in the event of the seller failing to meet one of its commitments. For example, if you are unable to find your customers a cab to take them to the station at the end of their stay, you cannot be held responsible if they miss their flight.
Jurisdiction clause
Jurisdiction clauses determine which court in which city is to be seized in the event of a dispute. In principle, these clauses can only be applied to business customers. This means that, in the event of a dispute being brought before a court, you won’t have to endure proceedings far from your head office.
Your General Terms and Conditions of Sale are intended to apply to all your transactions, and will form the basis of any dispute. It is essential that they are complete and intelligible. We can help you draw them up so that they not only comply with legal requirements, but also reflect the terms and conditions you wish to put in place.
Abusive breach of contract in commercial relations
You are negotiating a contract with a current or future business partner. You’ve been negotiating for months, incurring various costs in the process. Suddenly, your partner no longer wishes to commit to you and puts an end to your negotiations.
Your business partner may not be in the right. We explain how to identify an abusive breach of business relations and limit your financial losses.
Who is affected?
The main players in commercial relations are companies and their partners. These partners may be customers, suppliers, producers or distributors. Whether they are SMEs or major groups, solid commercial relationships are essential to business development.What are “talks”?
Discussions, also known as the “contractual negotiation phase”, are characterized by written or oral exchanges that take place before the parties conclude a contract. Depending on the complexity of the relationship between the parties, and the financial and economic stakes of the contract to be formed, the negotiation phase can be more or less lengthy. In principle, this pre-contractual phase is characterized by a principle of freedom. In other words, each party is free to propose what it wishes, ask for what it wishes, and terminate negotiations. There are, however, certain rules governing negotiations, such as the obligation to provide information and confidentiality, as well as the termination of talks. In this way, the party who terminates negotiations may be held extra-contractually liable (also known as liable in tort) for improperly terminating talks.What is meant by “abusive termination of talks”?
Pre-contractual negotiations must be conducted in good faith (article 1104 of the French Civil Code). In application of this rule, a fault during the talks may give rise to extra-contractual liability (in tort). To identify a fault, judges take into account the reasons given for the breach, the legitimate expectations of the other party in concluding the contract, the means/expenses already made available to the other party, the duration and progress of the talks, the complexity of the negotiations and the absence of legitimate reasons for the breach. In all cases, if a fault is identified, in order to engage the liability of a party, it is also necessary to identify damage (harm suffered by the other party) and a causal link between the two. These are the conditions laid down in Article 1240 of the French Civil Code. In concrete terms, you’ve been talking to one of your prospects for 8 months with a view to signing a contract. You’ve even started making investments to be able to honor the future contract: buying larger premises, purchasing more equipment, etc.Penalties for abusive termination of commercial relations
If a party is able to demonstrate a fault in the breach of talks, a prejudice and a causal link between the two, the judge may admit the abusive nature of the breach. In this case, as the parties are not bound by a contract, only delictual liability can be engaged. This means that the prejudice suffered by the party who suffered the breach will be compensated by damages. The compensable prejudice may take the form of costs incurred during the negotiation phase, or the cost of cancelling the contract. On the other hand, the compensable loss cannot correspond to what a party could have gained from the conclusion of the contract, since no contract has been concluded.How do I break off talks?
It is therefore possible to break off talks freely, provided you do not do so abusively. It is important to avoid causing prejudice to the potential co-contractor, particularly if he has already advanced funds, made improvements or if breaking off negotiations will have numerous consequences for him, particularly financial. In order to break off negotiations while avoiding causing the other party any prejudice likely to engage your liability in tort, it is entirely possible to reimburse the expenses incurred by the other party, for example.What can I do if I suffer prejudice as a result of an abusive breach of contract?
Abusive breaches of contract may enable you to hold the person with whom you intended to enter into a contract liable in tort. If you consider that the breakdown of the talks is abusive and causes you financial prejudice, you can sue the other party for reimbursement of the sums advanced or payment of damages. For further information, please do not hesitate to contact us.Fixed-rate days: Everything you need to know about the fixed-rate days agreement
Precautions to be taken during the performance of an employee’s employment contract under the SYNTEC agreement.
The “SYNTEC” agreement includes provisions relating to the implementation of fixed-rate day agreements. Employers covered by this agreement must refer to the April 1, 2014 rider and not to the agreement dated June 22, 1999 relating to working hours, which was ruled to be non-compliant by the Court of Cassation (Cass. Soc. April 24, 2013, n°11-28.398) (see ____).
Once the package has been set up and our three recommendations have been complied with (___), we need to monitor the implementation of this package agreement during the performance of the employment contract.
The main difficulty and danger in implementing such agreements lies in managing and monitoring employee workloads.
Even if employees are autonomous, it is important to ensure that maximum working hours are respected.
1st precaution: set up a workload monitoring and control document
Under the terms of the SYNTEC collective bargaining agreement, the employer must set up objective, reliable and contradictory monitoring procedures.
It is up to the employer to draw up a document showing the number and date of days worked by the employee, as well as the positioning and classification of days not worked as weekly rest days, paid vacations, etc.
In practice, this document takes the form of a table.
This follow-up is drawn up by the employee, who must complete it under the employer’s supervision.
Wherever possible, it is preferable to ensure that the employer receives this table on a monthly basis, to ensure effective monitoring of the employee’s working hours.
This monitoring is carried out in the employee’s interest, to safeguard his or her health.
failure to comply with this obligation may result in the nullity of the fixed-rate day agreement.
The employee could then legitimately claim overtime pay before the Conseil de Prud’hommes, which could prove particularly costly for the company (see below).
2nd precaution: setting up annual interviews with employees covered by a fixed-day agreement
The SYNTEC agreement provides for a minimum of two meetings per year with the employee subject to a fixed-duration agreement, in addition to a specific individual meeting in the event of unusual difficulties.
In particular, this meeting must address the employee’s individual workload, the organization of work within the company, the work-life balance, and the employee’s remuneration.
It also involves taking stock of how the employee’s work is organized, his individual workload, and so on.
The employee and his/her manager take advantage of this meeting to take the necessary steps to prevent and resolve any difficulties. For example, if during this meeting the employee points out a difficulty linked to workload, a solution should quickly be proposed by the employer (workload adjustment, follow-up, etc.).
A report on these annual reviews must be drawn up, containing any solutions and measures taken to address any difficulties raised by the employee during the review.
3rd precaution: guaranteeing the employee’s right to rest and disconnection
The SYNTEC Agreement expressly stipulates the rest periods that must be respected by employees on fixed-term contracts, i.e. a minimum of 11 consecutive hours and a minimum weekly rest period of 35 consecutive hours (24 hours + 11 hours).
Compliance with these minimum times implies an obligation to disconnect from remote communication tools.
It is up to the employer to set up a monitoring tool to ensure that the employee’s daily and weekly rest periods are respected.
4th precaution: monitoring workload and working day amplitude, and the employee’s right to be alerted
The employer of an employee with a fixed number of days must regularly monitor the organization of the employee’s work, his workload and the amplitude of his working day.
In the event of unusual difficulties concerning the organization of their workload, employees have the option of alerting their employer in writing.
The latter must then receive the employee within eight days and set out in writing the measures that will be put in place to ensure that the difficulty encountered by the employee is dealt with effectively. These measures must be the subject of a written report and follow-up.
This appointment can also be made at the employer’s initiative, if the latter becomes aware that the employee’s work organization or workload is leading to abnormal situations.
Once a year, the employer informs employee representatives of the number of alerts issued by employees, and the measures taken to deal with them.
To meet your obligations in this area, it’s best to set up a real process within your company.
DESRUMAUX AVOCATS can help you with this process and the associated support.
5th precaution: remuneration of employees on fixed-term contracts in the SYNTEC agreement
The SYNTEC collective bargaining agreement provides for annual compensation of at least 120% of the contractual minimum for the employee’s category.
Thus, each year, the employer must ensure that all employees on a fixed-day contract receive compensation at least equal to 120% of the collective bargaining minimum, depending on their coefficient.
As a reminder, in application of the SYNTEC agreement, only managerial staff with at least position 3 in the classification grid provided for in the agreement can benefit from fixed-day agreements, which is not the case for vacation bonuses, for example.
Under the terms of the agreement, managers in position 3.1 must receive a minimum gross salary of €3,490.10.
If these managers are subject to a fixed-day contract, their remuneration must be at least €4,188.12 (€3,490.10 * 1.2 = €4,188.12).
The SYNTEC agreement is particularly favorable to employees on this point, and particular care must be taken, as failure to comply with these provisions may result in the flat-rate agreement being declared null and void, with all the attendant consequences.
What are the risks if an employee’s fixed-term workweek agreement is declared null and void?
If a fixed-rate agreement is declared null and void, then, as mentioned above, the employee can claim payment for all hours worked in excess of 35 hours, which, in the case of employees on a fixed-rate day contract, can sometimes represent a considerable number of hours, and an equally significant back-pay for the employer.
The employer may also be ordered to pay compensation for undeclared work, amounting to six months’ salary.
Of course, this reminder of overtime will be possible subject to proof of the hours actually worked (shared proof in overtime matters).
Is it possible to adapt the rules contained in the SYNTEC agreement to my company?
Since September 2017, new rules have come into force for collective bargaining.
The main aim of these new provisions was to give the company agreement genuine primacy over the branch agreement.
As a result, since these texts came into force, company agreements have generally taken precedence over branch agreements, except in certain areas in which company agreements cannot override branch agreements, such as minimum wages, professional equality between men and women, and supplementary guarantees.
In other areas, however, company agreements take precedence.
It is therefore perfectly possible for your company to conclude a fixed-days agreement with executives whose position is lower than that covered by the SYNTEC agreement.
DESRUMAUX AVOCATS can also help you draw up and implement such an agreement in your company.
Automatic compensation for employees who exceed maximum working hours
In a ruling handed down on January 26, 2022[1], the Social Division of the French Supreme Court (Cour de cassation) declared that “the mere fact that the maximum working time has been exceeded gives rise to a right to compensation “.
In support of this decision, it appears that the mere fact of exceeding the 48-hour maximum working time entitles the employee to compensation.
In this ruling, an employee complained that the Court of Appeal had dismissed his claim for damages for violation of maximum working hours, on the grounds that he had not demonstrated the existence of any prejudice.
The employee then appealed to the French Supreme Court, claiming infringement of the provisions of article L. 3121-35 of the French Labor Code, as well as article 6 b) of directive 2008/88/EC of November 4, 2003.
Article L. 3121-35 of the French Labor Code transposes the aforementioned article of the Directive into domestic law. This article provides, in the version applicable to the dispute (prior to the law of August 8, 2016), that over the course of a single week, working hours may not exceed 48 hours.
In the past, the Court of Justice of the European Union has already ruled that exceeding the maximum average weekly working time set by the Directive constitutes a breach of this provision, without the need to demonstrate the existence of damage.
The French Supreme Court (Cour de cassation) expressly referred to these rulings by the European Court of Justice, before going on to issue a similar ruling, stating in its operative part that ” the mere fact of having exceeded the maximum working time entitles the employee to compensation “.
Employers will therefore need to be particularly vigilant to ensure compliance with the maximum working hours set by the French Labor Code or the applicable collective agreement.
In addition to the necessary protection of employee health which requires compliance with such provisions, employers will automatically be liable to pay damages to their employees if these provisions are not complied with.
[1] Cass. soc. January 26, 2022, no. 20-21.636
Unpaid overtime: conditions and obligations
An employee may be required to work more than the weekly hours stipulated in his employment contract, at his employer’s request. However, payment for overtime worked must be increased.
Overtime bonuses
The rate of overtime pay is defined by the company’s collective bargaining agreement. It must be at least 10%.
In excess of 220 hours’ overtime per year, the employee is entitled to time off in lieu. However, the company may stipulate a different ceiling in its collective bargaining agreement.
If the company’s collective bargaining agreement does not stipulate the conditions for increasing overtime pay, overtime must be increased in accordance with article L. 3121-36 of the French Labor Code:
- 25% for the first 8 hours ;
- 50% for overtime in excess of 8 hours.
Alternatives to overtime pay
A company’s collective bargaining agreement may provide for alternatives to overtime pay.
It can be :
- Compensatory rest in lieu of overtime pay;
- A fixed-rate agreement: This is particularly the case for managers who regularly work more than 35 hours a week, so overtime is included in their fixed-rate agreement.
Furthermore, the employer is not obliged to pay overtime worked by the employee if the latter has done so of his own accord. In this case, the employer will have to prove that the overtime worked by the employee was not at the employee’s request, and was simply at the employee’s will.
What are the employer’s obligations?
Employers are obliged to mention overtime worked by their employees on their pay slips. Failure to do so may result in prosecution for the offence of concealed work, and the payment of compensation to the employee equal to 6 months’ salary.
The employer must be able to justify all overtime hours worked by the employee.
What recourse does an employee have for unpaid overtime?
An employee who has not been compensated for overtime, despite an attempt to reach an amicable agreement with his employer, may take his case to the Conseil de Prud’ hommes within 3 years. The employee may request payment of unpaid overtime and claim damages from the employer.
Despite the employer’s serious failure to pay overtime, the employee may decide to terminate his or her employment contract with the company.
He can ask the judge to dismiss him without real and serious cause by taking action to terminate his employment contract, or to terminate his employment contract by court order, which will have the same effect as a dismissal without real and serious cause.
Sale of a business: formalities to be complied with
Every year, several thousand businesses are sold. The sale of a business is the transfer of all the elements that can be seized, such as furniture, equipment and seizable parts such as the brand name or clientele, etc. Everything related to your field of activity.
A cession de fonds de commerce (sale of business assets) is a way of selling off a company. Instead of selling shares, it involves selling off all the company’s assets. This action is strictly regulated by French law. There are certain operations specific to the sale of a business that must be complied with, or the transaction will be cancelled.
Steps to take before selling a business
Care must be taken if the business is located in a business protection zone. It is possible that the Mairie has a right of pre-emption to acquire the business. From a legal point of view, the town council has a right of pre-emption, a regulation linked to the transfer of a business, which will only apply in the event of the transfer of a company, even if the business will be entrusted to different hands. If this situation concerns you, you will need to send a previous declaration of transfer to the mayor. The mayor will then have 2 months to inform you whether or not you wish to become a buyer. It is advisable to be cautious before starting a possible sale with a buyer for your business, and to write a letter of intent. This letter gives you the advantage of defining the limits of your negotiations with the potential buyer. Once negotiations have begun, you’ll need to sign a confidentiality agreement, so as to preserve sensitive data and your expertise.What data must appear on the deed?
As in the case of a business donation, the deed of sale must include certain mandatory details. The following items must be included in the deed of sale, whether drafted or notarized:- The price of the property determined with the buyer for your fund.
- The former owner of the land, i.e. the first name and surname, and the date in the deed according to the owner who bought the land.
- Type of deed (authenticated deed or private deed)
- The purchase price of the business by the seller. If the seller has set up the business, this action must be stipulated in the deed of sale.
- Balance sheet of benefits and pledges: official document issued to all interested parties from the Registrar to the Commercial Court, providing information on rights and contracts concerning the business.
- Balance sheets for the last three years, showing sales.
- The parties to the commercial lease If you occupy commercial premises as a tenant, the deed of assignment must specify the duration of the lease and the date; the address and name of the assignor and lessor must also be noted. You must also notify the lessor of the assignment.
What to do after selling your business?
Once the sale of the business has been completed, 3 steps must be taken: the sale of the business in the case of a voluntary transfer. Moreover, these formalities are not considered to be transposable, particularly in the case of a pledge of a business or a collective procedure. What’s more, in addition to your standard obligations and formalities, you’ll probably have to carry out additional formalities with specific organizations or other people. If you have submitted a sign or trademark for your business, and you wish to sell it with the business, you will need to take steps with the INPI (Institut National de la Propriété Industrielle).Tax return
Within one month of the date of the sale of your business, you must register it, in particular by the buyer. You must declare it to the tax department responsible for the purchaser. If the value of the business exceeds 25,000 euros, registration fees will be payable.Reporting a business transfer to the CFE
Another formality is to declare the business sale to the Centre de Formalités des Entreprises. The buyer will then be able to make all the necessary administrative and legal declarations in the same place. The buyer also has the option of applying to the local commercial court (greffe) to register the business.Informing third parties
In order to inform all creditors of the sale, a deed must be legally published within 15 days of the date.- To be published in a JAL or legal gazette
- To be published in the BODACC (Bulletin Officiel des Annonces Civiles et Commerciales) by the Registrar of the Commercial Court.
Non-competition clause – Employment contract
When an employer includes a non-competition clause in an employee’s employment contract, it must be ensured that the clause allows the employer to unilaterally waive the clause, subject to a period of notice.
Recently, the Cour de Cassation considered that if the employer unilaterally waives the non-competition clause inserted in the employment contract but the employee objects, the financial consideration provided for in the non-competition clause is due… (Cass. Soc. March 29, 2017, n°15-27.078).
In other words, if the non-competition clause does not provide for unilateral termination by the employee, the employer must obtain the employee’s agreement to waive it. If the employee refuses the waiver, the indemnity provided for in the clause is payable.
If no financial compensation is specified, the employee may claim damages.
The French Supreme Court has ruled that the employer cannot impose a waiver of the non-competition clause without the employee’s agreement.
Be careful when drafting your non-competition clause.
Article written by Maître Ingrid Desrumaux, Avocat au Barreau de Bordeaux, Droit Social et Droit des Affaires – Updated on April 21, 2017
Automatic termination of a fixed-term employment contract
Employers may only use fixed-term employment contracts in certain cases governed by law. Similarly, fixed-term contracts can only be terminated in certain specific cases.
This study focuses on the most common type of termination : automatic termination of a fixed-term contract , i.e. on the date agreed in the fixed-term contract.
