Kuwait Court of Cassation principle number 2424

Business undertaking. Its inclusion of tangible and intangible elements. Their nature. Restriction of the sale of a business undertaking to some of these elements. Its being regarded 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 the location is the basis of reputation and the large clientele. Confining the sale to nonessential elements. It is not regarded as a sale of the commercial establishment. The contracting parties' statement that the sale concerned the business undertaking does not alter this. - Determining whether the elements covered by the sale of the business undertaking are essential or not. A matter for the court of merits. In ascertaining the true nature of the contract, it may investigate the transferor's intention, assess the evidence and presumptions presented, and draw the conclusions that satisfy it. The condition therefor. - Characterising whether the sale is a sale of a commercial establishment or of some of its nonessential elements. A question of law. Subject to review by the Court of Cassation. - Official form is an essential element in the formation of a sale of a business undertaking. Its absence. Its effect. Absolute nullity of the contract, both as regards the contracting parties and third parties. Every interested person may invoke it, and the court may declare it of its own motion. Articles 34, 26/1 of the Commercial Code, 184 of the Civil Code. Example. - Contract of duration:-