Legal Definitions - cessio fori

Cessio fori is a historical legal term derived from Latin, meaning "the giving up of business" or "surrender of the forum." Historically, it referred to the formal act by which an individual or business declared their insolvency—their inability to pay debts—and surrendered their assets to their creditors. This act effectively marked their bankruptcy and the complete cessation of their commercial activities.

Here are some examples illustrating the concept of cessio fori:

• Imagine a master tailor in 18th-century Paris whose business suffers a series of misfortunes, leading to overwhelming debts for fabric, rent, and wages. Unable to meet his financial obligations, he formally declares his insolvency to the local guild and authorities, surrendering his workshop, tools, and remaining inventory to be distributed among his creditors. This formal declaration and surrender of his business and assets due to bankruptcy is a direct historical example of cessio fori.

• Consider a small trading company operating in colonial America during the 17th century. After several disastrous voyages resulting in lost cargo and ships, the company finds itself deeply indebted to investors and suppliers, with no means to recover. The partners collectively decide to cease all operations, formally declare their inability to pay their debts, and initiate a process to liquidate the company's remaining assets, such as warehouses and land, to partially satisfy their creditors. This collective and formal abandonment of their business due to insolvency exemplifies cessio fori.