Kuwait Court of Cassation principle number 2653

A business establishment. Its inclusion of tangible and intangible elements. Their nature. Sale of the establishment limited to some of these elements. Its treatment as a sale of the commercial establishment. Its condition. That the sale include the principal elements, particularly customer connections, commercial reputation, and assignment of the leasehold right where location is the basis of renown and numerous customers. Sale confined to non-essential elements. Is not considered a sale of the commercial establishment. The contracting parties’ statement that the sale concerned the establishment does not alter this. - Determination of whether the elements covered by the sale of the establishment are essential. For the court of merits. To ascertain the true nature of the contract, it may investigate the transferor’s intention, assess the evidence and presumptions submitted, and draw the conclusions it finds convincing. Condition therefor. - 489 - Obligation - Legal characterization of whether the sale is a sale of a commercial establishment or of some of its non-essential elements. A question of law. Subject to review by the Court of Cassation. - Official form is an essential element in the conclusion of a sale of a business establishment. Its absence. Its effect. Absolute nullity of the contract, whether in relation to the contracting parties or third parties. Any interested person may invoke it, and the court may rule on it of its own motion. Articles 34, 26/1 of the Commercial Code, Article 184 of the Civil Code. Example.