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Trade
A trader may suffer non-material damage because of the close proximity of a competitor
Publié le 31 juillet 2024 - Directorate for Legal and Administrative Information (Prime Minister)
The close proximity of the establishment of a direct competitor may constitute non-material damage. This is what the Court of Cassation said in a ruling on June 5, 2024.

Business X concluded 2 licensing agreements for the sale of scratch-and-win games with 2 businesses located 15 meters apart. Business Y, which considers itself wronged by that proximity to a competitor, holds business X liable in contract for failure to fulfill its duty of good faith and loyalty.
The Court of Appeal condemns business X. It considers that it failed to fulfill its obligation of good faith and loyalty by granting, without justification, an authorization to a business located ‘very close’ to business Y. Moreover, that authorization immediately placed business Y in competition with a risk of transferring its customers. The business X is provided in cassation and justifies the approval by the commercial dynamism of the city.
The Court of Cassation dismisses the appeal. In its view, business X did not justify the approval given to the competitor of business Y, since trade was not favored during that period.
In addition, the Court finds that there was non-material damage to business Y as a result of the approval of a new competitive outlet at 15 meters. This harm lies in the “serious concern about the sustainability of its trade”.