Facts
A restaurant has been operated since 1912 in a building located in Geneva. Since 1982, the premises have been leased by the company Le Relais de l'Entrecôte SA. On May 4, 2006, the Geneva landlord Compagnie Immobilière SA terminated the contract with effect from April 30, 2007, indicating that it no longer wished to use the premises for a restaurant.
The tenant challenged the validity of the notice before the courts. The Rental Tribunal annulled the notice, considering that the landlord was adopting an inconsistent attitude incompatible with the rules of good faith. The landlord then appealed to the Federal Tribunal.
Considerations
The Federal Tribunal partially upheld the appeal. It considered that Art. 271 para. 1 CO does not preclude the landlord's right to terminate the lease in order to adapt the use of the property to its interests, even if this use had been agreed upon at the time of the conclusion of the lease.
Although the change of use may have painful consequences for the tenant, the Federal…