Financial Leasing and Small Businesses: How to Have Your Contract Annulled – Cass. crim., 6 January 2026, No. 24-81.212

It is a misfortune shared by thousands of self-employed workers, craftspeople, and liberal professionals. One fine morning, a sales representative walks through the door of your office or workshop. They offer you an indispensable piece of equipment (photocopier, defibrillator, website) for a negligible monthly sum. You sign. A few months later, the equipment breaks down or the supplier disappears, but the bank’s direct debits continue. Worse still, you discover that you are committed for 5 years at a total cost exceeding 20,000 euros. Welcome to the world of financial leasing, a sector where, as Mediapart points out, “not applying the law has long been profitable.”

But the tide is turning. Thanks to landmark decisions by the Court of Cassation in April 2025 and January 2026, the rights of “small professionals” have taken a giant leap forward. Recent case law marks a decisive turning point in the protection of small professionals against deceptive commercial practices in the field of financial leasing. Two major rulings by the Court of Cassation – one in commercial matters on 30 April 2025, the other in criminal matters on 6 January 2026 – clarify the legal classification of these contracts and confirm the application of consumer law to “small professionals.” In parallel, the Court of Justice of the European Union (CJEU) provided, in its ruling of 21 December 2023, fundamental clarifications on the distinction between credit agreements and financial services.

This article aims to restore hope to professionals trapped by abusive financial leasing contracts. More than a mere observation, it explains to you concretely what your rights are to help you take action. We review the most recent case law: the courts have recently blown the whistle on the practices of certain lessors. Relying on landmark court decisions from 2025 and 2026, this article shows you that the law is now on your side to challenge these commitments and assert your protection.

CJEU, Court, 21 Dec. 2023, C-38-21

Cass. com., 30 Apr. 2025, No. 24-10.316, Published in the Bulletin

Cass. crim., 6 Jan. 2026, No. 24-81.212, Published in the Bulletin

I. The context: questionable commercial practices

A. A flourishing business model

The financial leasing sector represents a considerable market, weighing 6 billion euros in turnover in 2024 according to the Association des soci\u00e9t\u00e9s financi\u00e8res (ASF). This business model systematically associates a supplier of goods or services with a finance company, thus creating a complex contractual structure.

The contracts mainly concern:

• Photocopiers and office equipment
• Defibrillators
• Websites and digital services
• Various professional equipment

B. Vulnerable victims

“Small professionals” – craftspeople, self-employed nurses, physiotherapists, shopkeepers, micro-entrepreneurs – are prime targets for these offers. Their vulnerability stems from several factors:

1. Decisional isolation: often working alone, they are confronted by professional sales representatives without having the time or expertise to analyze the exact scope of their commitment.
2. Deliberate confusion: sales representatives may imply that the proposed equipment is mandatory (particularly for defibrillators) or minimize the actual financial commitment.
3. Opacity of the contractual arrangement: the presence of two concurrent contracts (one with the supplier, the other with the finance company) dilutes responsibilities and complicates understanding.

The problem? These contracts often contain independence clauses. If the supplier fails to deliver or if the equipment is defective, the lessor still demands payment of the lease installments. This is what victims’ associations call “toxic contracts.”

C. Dramatic financial consequences

The amounts at stake far exceed the purchase cost of the leased goods. According to the Antilocfin collective, some photocopier lease contracts have reached 25,000 to 30,000 euros over four years for machines barely worth 1,000 euros to purchase. For a defibrillator, the commitment can exceed 6,000 euros over five years.

The virtual impossibility of termination is the main trap: when the professional attempts to end the contract, the finance company demands payment of all remaining installments, even in the event of equipment failure.

II. The applicable legal framework

A. The extension of consumer law to small professionals

The law of 17 March 2014 (Hamon Act) extended certain protective provisions of the Consumer Code to contracts concluded off-premises between two professionals, subject to two cumulative conditions set out in Article L. 221-3:

1. Quantitative criterion: the solicited professional must employ five employees at most
2. Qualitative criterion: the subject matter of the contract must not fall within the scope of the solicited professional’s principal activity

When these conditions are met, the professional benefits in particular from a fourteen-day withdrawal right provided for by Article L. 221-18 of the Consumer Code.

B. The concept of principal activity for civil partnerships for shared resources

For a long time, finance companies (Locam, BNP Paribas Lease Group, etc.) claimed that professionals had no right of withdrawal. However, Article L. 221-3 of the Consumer Code provides protection for structures with fewer than 5 employees, provided that the contract does not fall within the scope of their principal activity.

The ruling of the Commercial Chamber of 30 April 2025 (Cass. com., 30 Apr. 2025, No. 24-10.316, Published in the Bulletin) radically clarified this concept of principal activity.

The facts: A SCM (soci\u00e9t\u00e9 civile de moyens) comprising physiotherapists had entered into a financial lease contract for a photocopier. The Court of Appeal of Limoges had excluded the application of the Consumer Code on the grounds that the SCM had as its corporate purpose the provision of resources to its members and that leasing a photocopier therefore fell within its principal activity.

The solution: The Court of Cassation overturned the ruling, citing Articles L. 221-3 of the Consumer Code and Article 36 of the law of 29 November 1966 on professional civil partnerships. It sets out a fundamental principle in its headnote:

“It follows from Article L. 221-3 of the Consumer Code that Article L. 221-18, which grants a right of withdrawal to the consumer, is applicable to contracts concluded off-premises between two professionals provided that the subject matter of these contracts does not fall within the scope of the solicited professional’s principal activity and that the number of employees employed by the latter is equal to or less than five. It follows from Article 36 of the law of 29 November 1966 on professional civil partnerships that natural or legal persons practicing liberal professions may form among themselves a civil partnership whose sole purpose is to facilitate the exercise of each member’s professional activity and, to this end, pool the resources useful for the exercise of their professions, without the partnership itself practicing that profession.

It follows that the principal activity of a civil partnership for shared resources (soci\u00e9t\u00e9 civile de moyens), which consists of facilitating the exercise of its members’ profession, must be assessed with reference to that professional activity.”

In its reasoning, the Court specifies:

“To dismiss the SCM’s claims, the ruling holds that its purpose is to provide personnel or equipment resources to its members, intended to facilitate the exercise of their profession, and that this company does not itself practice the liberal activity of its members. It adds that the lease of a photocopier for the purpose of making it available to its partners to facilitate their activity as physiotherapists falls within its principal activity as defined by its corporate purpose.

In ruling thus, whereas the lease of a photocopier did not fall within the scope of the principal activity of its members, whose partners practiced the profession of physiotherapist, the Court of Appeal violated the aforementioned provisions.”

The key takeaway: An administrative task (photocopying) is not the core activity of a healthcare professional or a mechanic. If you have fewer than 5 employees, you therefore have 14 days to change your mind at no cost after signing.

C. The exclusion of financial services

To block legal proceedings, lessors used a legal stratagem: they claimed to be “financial services” (banking operations). Financial services are excluded from the usual protections against doorstep selling.

A central issue in the litigation therefore concerned the classification of financial lease contracts: do they constitute financial services, in which case the right of withdrawal would be excluded? Indeed, Article L. 221-2 of the Consumer Code expressly excludes from its scope contracts relating to financial services. Industry players long claimed that financial lease contracts fell within this exclusion.

III. Contributions of European case law

A. The CJEU ruling of 21 December 2023

In its ruling of 21 December 2023 (joined cases C-38/21, C-47/21, and C-232/21), the CJEU decided a preliminary question concerning the classification of automobile leasing contracts without a purchase obligation.

The general principle established by the Court:

“It follows from the case law of the Court of Justice of the European Union (CJEU, ruling of 21 December 2023, VK v. BMW Bank GmbH, C-38/21, C-47/21, and C-232/21; CJEU, ruling of 21 December 2023, Autotechnica Fleet Services, C-278/22) that lease or hire-purchase contracts that do not, at their expiry, include an obligation to purchase the leased object fall within the scope of Directive 2011/83/EU on consumer rights as ‘service contracts,’ and that in order to determine whether a lease contract without a purchase option, of a hybrid nature, may be classified as a financial service within the meaning of that directive, one must look at its main subject matter in order to verify whether the element relating to credit prevails over the element relating to the lease.”

On the concept of “banking-related service”:

The CJEU defines this concept restrictively at paragraph 140 of its ruling:

“The concept of financial service should receive uniform application within the European Union, and the concept of banking-related service ‘must be understood as a service offered in the course of a commercial activity traditionally carried out by banks’ (CJEU, 21 Dec. 2023, [VK], case C-38/21, para. 140).”

On the concept of “credit-related service”:

The Court specifies at paragraphs 144 and 145:

“The concept of credit-related service, which is not defined by any European law provision, must be understood, according to common legal language, as ‘the provision of a sum of money or of payment deadlines or facilities by the lender to the borrower for the purposes of financing or deferred payment, so that a credit agreement must be regarded as a contract under which a lender grants or undertakes to grant to a consumer credit in the form of a deferred payment, a loan, or any other similar payment facility’ (CJEU, [VK], cited above, paras. 144-145).”

The classification method for hybrid contracts:

At paragraphs 146-147, the CJEU states:

“In the presence of hybrid contracts, such as long-term leases without a purchase obligation incorporating ‘a rental element’ and ‘a credit element,’ it is for the courts of the Member States, in order to determine whether the transaction at issue must be classified as a ‘credit-related service,’ to determine its main subject matter in order to verify whether the element relating to credit prevails over the element relating to the lease (CJEU, [VK], cited above, paras. 146-147; CJEU, Autotechnica Fleet, 21 December 2023, C-278/22, para. 42).”

The concrete assessment criteria:

The CJEU specifies that it is appropriate to verify:

“Whether the absence of a purchase obligation is not explained by the fact that it would have been rendered unnecessary because the acquired asset had a limited lifespan and the duration of the contract was correlated to that lifespan, and on the other hand, to determine whether the lessee was required to bear or not the full amortization of the costs incurred as well as the risks of depreciation of the asset at the end of the contract (cf. in particular, CJEU, [VK], cited above, paras. 48 et seq.).”

The strength of European case law

European justice thus considers that these leasing contracts without a purchase obligation are standard “service contracts.” They must therefore comply with full transparency requirements vis-\u00e0-vis the client.

“The element relating to the lease prevails over the element relating to credit,” summarizes Nicolas Mathey in the journal L’Essentiel Droit Bancaire.

B. Transposition into French law

The Criminal Chamber of the Court of Cassation, in its ruling of 6 January 2026 (No. 24-81.212), explicitly relies on the CJEU case law to classify the financial lease contracts offered by the company Locam.

Headnote of principle:

“Pursuant to Articles L. 121-16 and L. 121-16-1, now Articles L. 221-2 and L. 221-3 of the Consumer Code, the extension to off-premises contracts concluded between two professionals of the protective provisions of this Code is excluded if these contracts relate to financial services.

It follows from the case law of the Court of Justice of the European Union (CJEU, ruling of 21 December 2023, VK v. BMW Bank GmbH, C-38/21, C-47/21, and C-232/21; CJEU, ruling of 21 December 2023, Autotechnica Fleet Services, C-278/22) that lease or hire-purchase contracts that do not, at their expiry, include an obligation to purchase the leased object fall within the scope of Directive 2011/83/EU on consumer rights as ‘service contracts,’ and that in order to determine whether a lease contract without a purchase option, of a hybrid nature, may be classified as a financial service within the meaning of that directive, one must look at its main subject matter, in order to verify whether the element relating to credit prevails over the element relating to the lease.”

Application to the facts:

The Court continues in its reasoning:

“Judges who, in order to convict a company of offenses under the Consumer Code, state that the long-term lease contracts that are the subject of the prosecution cannot be analyzed as banking or credit operations within the meaning of the provisions of the Monetary and Financial Code, nor as a financial service within the meaning of European Directive No. 2011/83/EU of 25 October 2011, by reaching their decision on grounds from which it follows, in the absence of a purchase option and having regard to the reciprocal obligations of the parties, that, in the main subject matter of the disputed contracts, the element relating to the lease prevails over the element relating to credit, thus justify their decision.”

The Court of Cassation approves the lower court judges who had found:

“The transactions involve three parties: the supplier, the user-lessee or tenant, and the financier, the company [Locam].

Within the financial arrangement chosen, the client benefits from the use of the asset or service for the duration of the contractual relationship binding them to the company [Locam], which has become their lessor, and pays a rental fee for this purpose.

It does not appear from any of the specific conditions of the indicted contracts that the asset or service is financed by means of a tied credit, nor that the lessee, at the end of the contract, benefits from a purchase option for the asset thus financed and used.”

Rejection of the company’s arguments:

The Court dismisses the various grounds raised by Locam:

“First, while Article L. 311-2 of the Monetary and Financial Code allows finance companies, authorized to carry out hire-purchase operations, to perform operations ancillary to their activity such as simple lease operations of movable or immovable property, it does not follow that the latter must, for that reason alone, be classified as a financial service.

Second, the disputed financial lease does not constitute a hire-purchase operation nor, more generally, a lease transaction accompanied by a purchase option, which alone are capable of being treated as credit operations under Article L. 313-1 of the Monetary and Financial Code.

Third, the judges, who were not required to conduct an inquiry that was not asked of them, reached their decision on grounds from which it follows, in the absence of a purchase option and having regard to the reciprocal obligations of the parties, that, in the main subject matter of the disputed contracts, the element relating to the lease prevails over the element relating to credit, so that these contracts do not relate to financial services.”

The impact is massive: This means that criminal consumer law applies. A lessor who collects money before the end of the withdrawal period or who fails to provide a withdrawal form commits a criminal offense.

IV. The criminal conviction of Locam

A. The offenses found

The ruling of 6 January 2026 by the Criminal Chamber confirms the conviction of Locam, a subsidiary of Cr\u00e9dit Agricole de Loire et Haute-Loire, for three offenses:

1. Deceptive commercial practices (Article L. 121-2 of the Consumer Code)
2. Obtaining payment before the end of the withdrawal period (Article L. 242-8 of the Consumer Code)
3. Failure to provide the consumer with a compliant copy of the contract concluded off-premises (Article L. 242-5 of the Consumer Code)

The company was sentenced to a fine of 1.2 million euros, together with an obligation to publish the decision.

B. The analysis of liability

The Court of Appeal of Lyon had concluded that there was “a deliberate and persistent willingness on the part of [the company Locam] to persist in this infringing conduct.”

This position is explained by several factors:

1. The clarity of the administrative position: The Directorate General for Competition, Consumer Affairs, and Fraud Prevention (DGCCRF) had long affirmed the applicability of the right of withdrawal to these contracts.
2. The collective refusal to comply: Locam indicates moreover that its position was that of “all market players in the lease financing sector” and was based on opinions from the Association des soci\u00e9t\u00e9s financi\u00e8res (ASF).
3. The profitability of illegality: With many small professionals giving up on defending themselves or losing in court, non-compliance with the law proved to be economically advantageous for finance companies.

C. The applicability of Article L. 221-3: the criterion of principal activity

The Court of Cassation approves the lower court judges on the application of Article L. 221-3 to Locam’s clients:

“To convict the company [Locam] of the offenses prosecuted, the appealed ruling states that nearly half of the complainants practice or practiced a professional activity as a personal and individual business and more incidentally within the framework of a legal entity.

The judges note that individuals or companies employing more than five employees were excluded from the prosecution by the public prosecutor as not meeting the legal criteria, as were complainants who had not responded regarding the number of people they employed.

They add that the contracts predominantly concern the lease of multifunction office equipment and that, having regard to the principal activity of the lessees, while the lease of office equipment, websites, card readers, and fire extinguishers may facilitate the activity of a speech therapist, a translator, a psychologist, a doctor, a dietitian, a physiotherapist, a furniture manufacturer, a winegrower, or a hairdresser, these goods or services are not at the core of the trades of these professionals.

They conclude that the latter are not acting for purposes falling within the scope of their principal activities, whether commercial, industrial, artisanal, liberal, or agricultural.”

The particular case of the defibrillator:

The Court also validates the judges’ reasoning concerning a self-employed nurse who had leased a defibrillator:

“With regard more particularly to Mrs. [S] [Y], a nurse practicing in a self-employed capacity, who signed a lease contract for a defibrillator and its accessories, as well as an insurance and assistance contract for this equipment, the judges note that while a defibrillator may be useful and facilitate the activity of a nursing practice, the technical choice of this equipment and its use does not fall within the scope of her principal activities, to such an extent that she had to enter into an assistance contract.

They deduce that the complainants’ contracts do indeed fall within the scope of the provisions of Article L. 221-3 of the Consumer Code as contracts concluded off-premises.”

D. The rejection of arguments based on the imprecision of the text

Locam argued that Article L. 221-3 was too imprecise to form the basis of a criminal conviction. The Court of Cassation firmly rejected this argument:

“Article L. 221-3 of the Consumer Code is drafted in terms that are sufficiently clear and precise to allow its interpretation, which falls within the judge’s purview, without risk of arbitrariness, so that the reference to the subject matter of the contract not falling within the scope of the solicited professional’s principal activity does not violate the principle of legality of offenses and penalties guaranteed by Article 7, paragraph 1, of the Convention for the Protection of Human Rights and Fundamental Freedoms.

The judges exercised their sovereign discretion in holding that the disputed contracts did not fall within the scope of the principal activity of the civil parties within the meaning of Article L. 121-16-1, III, now Article L. 221-3, of the Consumer Code, to conclude that these provisions were applicable.”

E. The compensated victims

The conviction benefits approximately one hundred civil parties, including:

• A carpenter
• Speech therapists and doctors
• A hair salon
• Winegrowers
• Self-employed nurses
• Physiotherapists

These professionals had found themselves bound by contracts for photocopiers, defibrillators, or websites, often for amounts vastly disproportionate to the actual value of the goods or services.

V. Practical implications

A. Determining the principal activity

Case law now establishes a precise framework for determining whether the subject matter of the contract falls within the scope of the professional’s principal activity.

Examples from the case law:

The Court of Appeal of Lyon, whose reasoning is approved by the Court of Cassation, held that the following do not fall within the scope of principal activity:

• For a speech therapist, a translator, a psychologist: a photocopier
• For a doctor, a dietitian: office equipment
• For a physiotherapist: a photocopier
• For a furniture manufacturer, a winegrower, a hairdresser: office equipment
• For a self-employed nurse: a defibrillator (the technical choice of this equipment and its use not falling within the core of her professional competencies)

The reasoning adopted:

As the judges specify:

“While the lease of office equipment, websites, card readers, and fire extinguishers may facilitate the activity of a speech therapist, a translator, a psychologist, a doctor, a dietitian, a physiotherapist, a furniture manufacturer, a winegrower, or a hairdresser, these goods or services are not at the core of the trades of these professionals.”

The criterion is therefore not whether the asset is useful for the activity, but whether it is central or ancillary to the “core business.”

B. The consequences for finance companies

The Court of Cassation’s decision compels sector players to review their practices:

1. Information on the right of withdrawal: Contracts must clearly state the existence of a fourteen-day withdrawal period when the conditions of Article L. 221-3 are met.
2. Prohibition of payment before the end of the period: No payment may be demanded before the expiry of the withdrawal period.
3. Provision of a compliant copy: The professional must receive a copy of the contract that meets the mandatory disclosure requirements.

Locam states that it “takes note” of the decision and will “take steps to bring [its contracts] into compliance.” The entire sector, representing 6 billion euros in turnover, must undergo the same transformation.

C. Other actors concerned

Beyond Locam, several suppliers are also in the crosshairs of justice:

1. Citycare: fined 100,000 euros in November 2022 for deceptive commercial practices in the defibrillator sector (appeal pending).
2. Solution Impression Num\u00e9rique (SIN): the owner of this Toulon-based company was sentenced at first instance to six months’ imprisonment, suspended, with the case currently on appeal.

The DGCCRF reports, in an assessment published in 2022, eight injunctions and three criminal proceedings against sector players.

VI. The limits of protection

Despite these jurisprudential advances, the protection of professionals remains incomplete:

A. Time-related limitations

The right of withdrawal applies only during the fourteen days following the conclusion of the contract. After this period, even if the professional discovers they have been deceived, they remain bound by the contract.

The fourteen-day period, while valuable, may prove short given the complexity of certain arrangements.

B. Limitations related to business size

The threshold of five employees excludes many professionals from this protection. A business employing six or more employees does not benefit from the right of withdrawal, even if the subject matter of the contract does not fall within its principal activity.

C. The persistence of opaque practices

Beyond the right of withdrawal, toxic offers often remain without escape:

1. The dilution of responsibilities: the presence of two separate contracts (with the supplier and with the finance company) allows each party to shift responsibility to the other.
2. The irresponsibility of the finance company: when a problem arises with the supplied asset (breakdown, failure, bugs), the finance company demands that payments continue until the end of the contract. As the DGCCRF points out: “The latter demands that the contract be honored until its term.”
3. Late discovery: many victims discover the existence of the financier months after signing.

VII. Outlook and recommendations

When faced with doorstep selling for a financial lease offer, small professionals should:

1. Verify their eligibility for consumer protection (five employees maximum, contract subject matter outside principal activity)
2. Demand clear information on the existence of the fourteen-day right of withdrawal
3. Identify all contracting parties: supplier AND finance company
4. Compare the total cost of the lease with the purchase price of the asset
5. Seek advice before signing, particularly by contacting their professional chamber
6. Exercise the right of withdrawal in case of doubt, within the fourteen-day period

Conclusion

The rulings by the Court of Cassation in 2025 and 2026, informed by CJEU case law, mark a decisive stage in the protection of small professionals against deceptive commercial practices in the field of financial leasing.

Three major contributions emerge:

1. A clear classification: financial lease contracts without a purchase option constitute neither credit operations nor financial services, but service contracts falling within consumer law.
2. A protective interpretation: for civil partnerships for shared resources, the principal activity must be assessed with reference to the profession practiced by the members, and not the corporate purpose of the partnership.
3. An effective sanction: practices consisting of concealing the right of withdrawal or demanding payment before the end of the withdrawal period constitute criminal offenses subject to heavy penalties.

As Nicolas Mathey, professor at Universit\u00e9 Paris Cit\u00e9, points out: “This solution thus opens up the application of part of consumer law, and notably the rules relating to the right of withdrawal, to the small professional in the presence of one of these contracts concluded off-premises, the litigation of which is developing before the lower courts.”

The Court of Cassation has thus established clear and directly applicable principles, which should enable the lower courts to decide with greater legal certainty the numerous individual disputes. The explicit reference to CJEU case law also ensures the consistency of interpretation at the European level and reinforces the authority of these solutions.

The issue extends beyond the particular case of financial leasing: it is about recognizing that certain professionals, despite their status, find themselves in a situation of vulnerability comparable to that of consumers and deserve equivalent protection. The boundary between professional and consumer, long impermeable, is gradually fading in favor of a more pragmatic approach based on the actual balance of power between the parties.

The financial leasing sector, weighing 6 billion euros, will now have to integrate this new legal landscape. Licensed institutions, even when they deal with professionals, will have to ensure they respect this “core of consumer protection” now clearly established by case law. The very terms used by the Court of Cassation – stating that these goods or services “are not at the core of the trades” concerned – provide an operational criterion that should help avoid future litigation.

🛡️ FAQ: Financial leasing and “toxic contracts”