Key points
- Issue: A lessor claimed unpaid rent and compensation for repairs from two successive users of a private hire car, who argued that the contracts were void.
- Decision: the court declared the contracts void on the grounds that the lessor was not authorised as a credit institution, and subsequently ordered reciprocal restitution.
- Outcome: The users owe the lessor approximately €114,000, plus interest at the statutory rate and €4,500 in legal costs.
Cancelled private hire vehicle lease agreement: judge orders payment of the vehicle’s value in use
On 24 September 2026 (Case No. J2026000695), the Paris Commercial Court annulled two lease-purchase contracts for a private hire vehicle, whilst ordering the users to pay approximately €114,000 to the lessor, represented by Goldwin Avocats. In the event of unpaid hire charges for a private hire vehicle, the contract’s nullity does not therefore negate the use made of the vehicle.
Unpaid hire charges for a private hire vehicle: two successive users implicated
Company A, a vehicle hire firm, was seeking payment of outstanding hire charges from two successive users of a high-end saloon car operated as a private hire vehicle.
Mr X used the vehicle from November 2019 to November 2021, followed by Company B until it was returned in March 2024. The monthly hire charge of €3,500 was accompanied by a 48-month option to purchase.
The lessor had initially obtained a payment order, that is to say, a judgement issued without prior hearing. Mr X lodged an objection to this, after which Company B was joined to the proceedings.
Both users argued that the contracts were unlawful finance leases and claimed a refund of approximately €120,000.
Why the court ordered payment for the use of the vehicle despite the contracts being void
In this dispute over unpaid hire charges for a private hire vehicle, the court annulled both contracts and then set off the refunds due from both parties.
The promised sale took account of the hire charges paid: it was a hire-purchase agreement or a finance lease (Articles L. 313-1 and L. 313-7 of the Monetary and Financial Code). Article L. 511-5 reserves such transactions for authorised credit institutions.
The declaration of nullity restores the parties to their previous position (Article 1352 of the Civil Code). The lessor refunds the rent for which proof has been provided; the lessees pay the value of use, that is to say, the price for the use of the property, equal to the agreed rent.
After set-off, Mr X owes €42,000 (€84,000 for use minus €42,000 already paid). Company B owes approximately €72,400, of which around €27,000 relates to repairs carried out whilst the property was in use.
Private hire vehicle lease with option to purchase: what the ruling means for you
Invoking the nullity of the contract does not exempt a private hire driver from paying for the use of the vehicle. The court accepted the agreed rental fee as the value of use. In return, the lessor forfeits the penalty clause, the interest surcharges and the fixed-sum recovery fee.
Proof of payments settles the balance: the court rejected a simple certificate from a chartered accountant. It is best to provide:
- bank statements showing the rent paid;
- paid invoices and receipts;
- dated repair invoices;
- the tenancy agreement, its amendments and the purchase option.
The judgement, handed down at first instance, is enforceable notwithstanding any appeal.
Each situation is assessed on a case-by-case basis.
Are you involved in a dispute concerning a private hire vehicle lease, a purchase option or unpaid rent?
Contact one of our contract law solicitors to review your contract and supporting documents.
Related areas of expertise
Business law › Contract law solicitor – contractual law
Frequently asked questions about leasing a private hire vehicle with an option to buy
Not freely. Where the final sale price takes account of the rent paid, the transaction constitutes a hire-purchase arrangement or a finance lease. Such transactions are restricted to credit institutions authorised under Article L. 511-5 of the Monetary and Financial Code.
An ordinary lessor risks the contract being declared null and void, as in this judgement of 24 September 2026.
Yes, in principle. The nullity of the contract obliges each party to return what they have received: the lessor returns the rent received, and the driver returns the value of the use of the vehicle (Article 1352-3 of the Civil Code). In this case, the court set the figure at €3,500 per month – the rent agreed by the parties – and then offset the amounts.
No. The clauses cease to apply once the contract is cancelled: the court rejected the penalty clause of approximately €26,000, the interest at the increased rate and the compensation of €40 per invoice. The lessor is, however, entitled to interest at the statutory rate on the balance set by the judgement, with effect from the date of the judgement.
Jonathan BELLAICHE
