The Validity Of The Contract De Gerance-Libre (Lease Management)

Ref: 28844, Morocco, Casablanca

Date of decision: 11/07/2024, Commercial Court of Appeal

Introduction

Legal systems oscillate between two poles: the rigidity of formalism and the flexibility of contractual autonomy. Commercial law, in particular, is a fertile ground for this tension. On one side, formal requirements such as registration, publication, and notarization exist to ensure transparency, protect creditors, and preserve legal certainty. On the other, the very essence of contract law lies in the principle, famously enshrined in Article 230 of the Moroccan Dahir of Obligations and Contracts (DOC), that agreements “legally formed constitute the law of the parties.” Nowhere is this dialectic more visible than in the debate over the contrat de gérance libre, a legal mechanism by which the owner of a commercial establishment entrusts its management to a third party.

The Casablanca Court of Appeal’s ruling of 7 November 2024 provides a remarkable illustration of this debate. At issue was whether a gérance libre agreement could be deemed valid and binding despite the absence of registration in the commercial register and the omission of publicity formalities mandated by Articles 152–158 of the Code de Commerce. The Court’s answer was clear: the contract remains binding between the parties, even if unenforceable against third parties. In privileging substance over form, the Court reaffirmed the primacy of contractual force while simultaneously delineating the proper role of publicity formalities.

This judgment, though seemingly technical, carries profound implications. It not only clarifies the scope of formal obligations under Moroccan commercial law but also resonates with broader jurisprudential debates over the balance between private autonomy and legal formalism. Much as the U.S. experience with summary judgment revealed the “law of unintended consequences” in procedural reform, Moroccan practice has exposed the risks of overemphasizing formalities: legitimate contracts risked being nullified, undermining stability and fairness in commerce.

I. Background: The Contrat de Gérance Libre and Its Formalities

The Gérance libre contract is a cornerstone of Moroccan commercial practice. Codified in Articles 152–158 of the Code de Commerce, it allows an entrepreneur to manage a commercial establishment for their own profit, while the proprietor retains ownership. The arrangement is particularly attractive in sectors such as retail and hospitality, where proprietors wish to delegate daily management without permanently alienating their business.

Because of the risks to third-party creditors, the legislature surrounded this contract with strict publicity requirements: registration in the commercial register, publication in the official Bulletin, and insertion in a newspaper of legal announcements. The rationale was straightforward: creditors and business partners must be able to identify the party responsible for debts and obligations incurred in the course of the gérance. Failure to comply, according to a literal reading of the law, might expose the contract to absolute nullity.

Yet, from its inception, this rigid formalism sparked unease. Was it just to annul a contract freely concluded by consenting parties merely because of procedural oversight? Would such nullity serve the ends of justice, or would it, instead, become a technical trap frustrating legitimate expectation? This tension set the stage for judicial intervention.

II. The Casablanca Dispute

In the case at the bar, a gérance libre contract was signed but never registered or publicized. When a dispute arose over unpaid management fees, one party invoked the lack of formalities to contest the validity of the entire agreement. The argument was straightforward: without registration and publication, the contract was void and could not produce legal effects.

The other party countered that, under Article 230 DOC, the contract was binding inter partes since it was concluded with mutual consent and lawful cause. The absence of registration might restrict opposability against third parties, but it did not vitiate the contract itself. The lower courts delivered conflicting opinions, compelling the Court of Appeal of Casablanca to resolve the controversy.

III. The Court’s Reasoning

The Casablanca Court of Appeal’s ruling embraced a pragmatic and doctrinally robust approach.

First, the Court distinguished between validity and opposability. It held that the formal requirements of Articles 152–158 of the Code de Commerce serve primarily to protect third parties by ensuring transparency in the marketplace. Their omission cannot retroactively destroy the consensual foundation of a contract between the signatories themselves. Thus, while lack of registration might prevent the gérant from invoking the contract against creditors, it does not nullify the agreement between parties.

Second, the Court reaffirmed the primacy of Article 230 DOC, which codifies the force obligatoire des contrats. This provision, deeply rooted in the French civil law tradition and transposed into Moroccan law, enshrines the sanctity of consent as the cornerstone of obligations. Unless the legislature explicitly provides for nullity, courts must presume validity when consent is present, cause is lawful, and object is determinate.

Third, the Court rejected allegations of fictitiousness. The party challenging the contract argued that the lack of registration was evidence that the agreement was a sham designed to evade obligations. Yet, no substantive evidence supported this claim. The Court insisted on an evidentiary threshold, recalling Article 443 DOC, which requires written proof for obligations exceeding certain amounts. Bank transfers presented in evidence established only partial payment; unsupported oral claims were dismissed.

Finally, the Court ordered payment of management fees for the contested period (June–October 2024), calculating the amount at 52,500 MAD. This outcome illustrated the Court’s determination to uphold commercial fairness and prevent opportunistic reliance on formal defects to escape substantive obligations.

IV. Consequences and Jurisprudential Impact

The judgment carries several doctrinal and practical consequences.

1. Reinforcement of Contractual Autonomy. By privileging substance over form, the Court reaffirmed that Moroccan law remains anchored in the consensual theory of contracts.

Formalities, while important, are ancillary safeguards, not existential conditions of validity.

2. Clarification of Public Order Functions. The decision clarifies that publicity requirements serve a public order of protection, not a public order of direction. They are intended to protect third parties, not to undermine private arrangements between consenting parties.

3. Economic Rationality. The ruling promotes commercial stability by preventing contracts from being invalidated on purely technical grounds. Businesses gain assurance that procedural oversights will not automatically destroy their agreements. This fosters confidence in Morocco’s commercial environment, which is essential for investment and growth.

4. Continuity with Supreme Court Jurisprudence. The judgment aligns with the Cour de cassation’s decision of 27 February 2020, which had similarly held that absence of registration did not invalidate the contract itself. By reaffirming this precedent, the Court of Appeal strengthens the predictability of Moroccan jurisprudence.

5. Comparative Perspective. The decision resonates with broader comparative debates. French courts, too, have gradually softened formalistic nullities, emphasizing inter partes validity while limiting enforceability against third parties. Moroccan law, by following this trajectory, aligns itself with international commercial standards.

V. Broader Lessons: Between Formalism and Pragmatism

The Casablanca judgment highlights a recurring theme in legal development: the law of unintended consequences. Just as the U.S. experiment with summary judgment, intended to streamline litigation, ended up generating complexity and cost , Moroccan lawmakers’ insistence on strict publicity for the gérance libre risked producing injustice by invalidating genuine agreements. Courts, therefore, must act as guardians of balance, ensuring that form does not eclipse substance.

The lesson is twofold. First, simpler is better: laws should clearly distinguish between conditions of validity and conditions of opposability. Second, judicial pragmatism is indispensable. By interpreting formalities in light of their protective purpose, rather than mechanically applying nullity, judges safeguard both legal certainty and fairness.

Conclusion

The Casablanca Court of Appeal’s 2024 decision is a significant milestone in Moroccan commercial law. By validating a gérance libre contract despite missing formalities, the Court reaffirmed the centrality of consent and the binding force of agreements. It clarified the protective scope of publicity requirements and ensured that formality would not be weaponized to undermine substantive obligations.

In so doing, the Court has contributed to the modernization of Moroccan jurisprudence, aligning it with comparative developments and reinforcing the confidence of economic actors in the stability of contractual commitments. The decision stands as a testament to the judiciary’s capacity to harmonize legal formalism with commercial pragmatism, ensuring that the law remains not an obstacle but a facilitator of economic and social life.

This article is authored by Safaa Fellah, Law Student from Morocco and Trainee of Lets Learn Law Legal Research Training Programme. The views and opinions expressed in this piece are solely those of the author.