Kuwait Court of Cassation principle number 327

A business establishment. Its inclusion of tangible and intangible elements. Their nature. Restriction of the sale of the establishment to some of these elements. Its characterization as a sale of the commercial establishment. Its condition. The sale must include the principal elements, particularly customer connections, commercial reputation, and assignment of the leasehold right whenever the location is the basis of its renown and numerous customers. Restriction of the sale to non-essential elements. It is not considered a sale of the commercial establishment. The contracting parties' statement that the sale concerned the establishment does not alter this. - Determining whether the elements covered by the sale of the establishment are essential or not. A matter for the court - 67 - Commercial of merits. In ascertaining 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. The condition for this. - Characterizing whether the sale is a sale of a commercial establishment or a sale of some of its non-essential elements. A question of law. Its subjection to review by the Court of Cassation. - Official form is an essential element in the conclusion of a sale of a business establishment. The effect of its absence. 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 declare it of its own motion. Articles 34 and 26/1 of the Commercial Code, and 184 of the Civil Code. Example. - Sale of small vessels:-