Legal Definitions - droit d'exécution

Droit d'exécution

This French legal term translates to the "right of execution." It refers to a legal entitlement held by one party to sell or dispose of assets belonging to another party. This right typically arises when the second party has failed to meet a financial obligation, defaulted on a contract, or refused to accept goods or services as agreed, leading to a potential loss for the first party. The droit d'exécution allows the first party to take action to recover debts, mitigate losses, or enforce contractual terms by selling the relevant assets.

• Example 1: Loan Default on Property

  Imagine a homeowner who takes out a mortgage loan from a bank to purchase a house. If the homeowner repeatedly fails to make their monthly mortgage payments, they are in default. The mortgage agreement grants the bank the droit d'exécution, allowing it to initiate foreclosure proceedings and ultimately sell the property. The bank exercises this right to recover the outstanding loan amount and associated costs from the sale of the house, which serves as collateral.

• Example 2: Unclaimed Goods in Storage

  Consider a commercial storage facility that holds inventory for various businesses. One client, a small online retailer, falls significantly behind on their monthly storage fees and becomes unresponsive. The storage agreement includes a clause stating that if fees remain unpaid for an extended period, the facility has the droit d'exécution to sell the stored inventory at auction. This allows the storage facility to recover the unpaid fees and clear space, mitigating their financial loss caused by the client's default.

• Example 3: Non-Payment for Custom-Ordered Equipment

  A manufacturing company produces specialized machinery for a client based on a custom order. After the machinery is completed and ready for delivery, the client unexpectedly cancels the order and refuses to make the final payment as stipulated in the contract. The contract specifies that in such a scenario, the manufacturer retains the droit d'exécution to sell the custom-built machinery to another buyer, even at a reduced price. This right enables the manufacturer to recoup the costs of materials, labor, and production that would otherwise be lost due to the client's breach of contract.