Automatic
The clause operates by its own terms — no notice, no procedure, no action needed. Neither party can waive its application by inaction
Index ≤ revision
Core validity rule (Art. L. 112-1 al. 2): the gap between multiplier and divisor index must not exceed the revision frequency
Upward-only = void
Void on two independent grounds: distortion (Art. L. 112-1 al. 2) + bilateral variation principle (Cass. 3e civ., 14 Jan. 2016)
5-year prescription
An action to challenge a void clause has no limitation period; the repayment claim for excess rent paid is subject to a 5-year prescription

What the Indexation Clause Is — and Is Not

The indexation clause (clause d'échelle mobile) is the provision in the lease by which the parties agree that the rent will vary automatically at defined intervals by reference to a published index. Its defining characteristic is automaticity: unlike the statutory three-year review, which requires a formal notice served within a prescribed window, the indexation clause operates by its own terms — no action needed, no waiting for a publication date, no procedure to initiate.

Two important distinctions: the indexation clause is entirely separate from the statutory three-year review under Article L. 145-38 — the two regimes are not mutually exclusive. It is also distinct from the updating clause (clause d'actualisation), which adjusts the rent to its starting level between signature and the effective date of the lease — a pre-lease mechanism, not an in-lease one.

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Drafting Point — Avoid Ambiguous Terminology

Leases sometimes use the word "révision" when what the parties actually intend is contractual indexation. This creates genuine ambiguity: if a court reads the clause as a reference to the statutory three-year review, it will require compliance with the formalities of Article L. 145-38 and deny the clause its automatic character. Use "indexation" for the contractual mechanism, and "révision" only when referring to the statutory review.

Automaticity: What It Means in Practice

The automatic character cuts in both directions. A landlord who forgets to apply the indexation cannot later argue that the right has been waived — the clause applies from the contractual date whether or not either party acts on it. The landlord can catch up on missed indexations within the five-year prescription period, but subject to the risk of a damages claim from a tenant who faces a large accumulated adjustment (Cass. 3e civ., 15 September 2010). The same applies to downward movements: a tenant can demand application of a downward movement at any time, regardless of whether the landlord has formally applied it.

The Multiplier and Divisor: The Distortion Rule

The core validity requirement, beyond the choice of a lawful index, is the rule in Article L. 112-1, al. 2 of the Code monétaire et financier: the period of index variation used in the clause must not exceed the period between revisions. For an annual indexation, the gap between the multiplier index and the divisor index must be no more than one year.

Many leases use a constant base index (indice de base constant): the divisor is fixed permanently at the index prevailing when the lease was signed, and only the multiplier changes each year. The Court of Cassation has confirmed that this is not unlawful by nature, provided it does not generate a distortion (Cass. 3e civ., 16 October 2013; Cass. 3e civ., 3 December 2014). The problem: any mid-lease modification to the rent — even a consensual amendment — breaks the mathematical equivalence and creates a distortion if the constant base index is not updated.

Common Distortions That Make a Clause Unwritten

SituationWhy it creates a distortionSource
Lease amendment modifying the rent without updating the base indexApplying the original base index to a new rent level stretches the index period beyond the revision periodCass. 3e civ., 7 May 2014; Cass. 3e civ., 25 Feb. 2016
Lease taking effect mid-year with annual indexation on 1 JanuaryThe first index period is less than one year but subsequent periods accumulate over twelve monthsCA Paris, 20 May 2016; CA Versailles, 21 June 2016
Clause indexing only in the upward direction (upward-only)When the index falls, no revision occurs for that year; the next upward revision then covers a period exceeding one yearCA Paris, 12 June 2013; Cass. 3e civ., 14 Jan. 2016
Clause fixing a floor below which the rent cannot fallIn falling-index periods, the rent is frozen rather than reduced; the base for the next calculation remains artificially elevatedCA Versailles, 10 March 2015; CA Paris, 31 May 2017
Clause freezing indexation when commercial conditions change materiallySuspending the clause based on a commercial factor movement creates an arbitrary gap in the index periodCA Paris, 15 March 2017

Upward-Only Clauses: Void on Two Independent Grounds

A clause that provides for indexation only when the index rises, with no downward movement in falling-index periods, is void on two independent grounds. First, it creates a distortion under Article L. 112-1, al. 2 (the upward revision period extends beyond the declared revision frequency when the index has been falling). Second, it violates the principle of free bilateral variation of the indexation clause: the very nature of a clause d'échelle mobile is to allow both upward and downward variation; a clause that excludes one direction is void (Cass. 3e civ., 14 January 2016, n° 14-24.681). An upward-only clause that renounces the tenant's right to have the indexed rent judicially fixed below the contractual rent also falls foul of Article L. 145-39 (Cass. 3e civ., 30 March 2017).

Tunnel Clauses: Uncertain Validity

A "tunnel clause" caps both the upward and downward movement of the indexed rent (e.g. annual variation of no more than 5% up or down). Unlike a pure upward-only clause, the tunnel clause preserves bidirectional variation. Academic opinion is divided on whether it is valid under the 2016 jurisprudence. A legislative reform to expressly validate tunnel clauses was adopted by the Senate in June 2024 but not passed by the National Assembly before it was dissolved. We recommend treating tunnel clauses with caution until the question is settled either by the Cour de cassation or by legislation.

Scope of the Sanction: Partial vs Total Voiding

The current position, following a series of rulings from 2018 to 2023, is that the test is divisibility: if the offending provision can be severed from the rest of the indexation clause without destroying its coherence, only that provision is unwritten and the clause survives. If the offending provision is so central to the clause that removing it would destroy its logic, the clause is unwritten in its entirety. The lease itself survives in all cases — a void indexation clause does not affect the validity of the lease.

Partial Voiding — Clause Survives
The offending provision can be severed from the rest of the indexation clause without destroying its coherence.

Example: a floor provision (single sentence) is struck, and the remaining clause continues to operate with bidirectional variation. Rent reverts to the clause as if the floor had never existed.

Source: Cass. 3e civ., 12 Jan. 2022, n° 21-11.169; Cass. 3e civ., 4 Jan. 2023, n° 21-23.412
Total Voiding — Entire Clause Unwritten
The offending provision is so central to the clause that removing it destroys its logic — the clause cannot function without it.

Example: an upward-only mechanism that is the sole operative engine of the clause; removing the one-directional element leaves nothing functional. Rent reverts to the statutory three-year review under Art. L. 145-38.

Tenant remedy: repayment of excess rent paid — subject to 5-year prescription from each payment date.
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Warning — Forgotten Indexation Can Be Applied Retrospectively

A landlord who has not been applying the indexation for several years may be tempted to apply a large catch-up adjustment. This is legally available within the five-year prescription period, but a large retrospective demand has been held to give rise to a damages claim in favour of the tenant who is forced to absorb an unexpected increase (Cass. 3e civ., 15 September 2010). The safer course is to apply indexation annually as the clause requires, without allowing backlogs to accumulate.

Indexation Clause Drafting Checklist
  • Terminology: use "indexation" (not "révision") to make the automatic character unambiguous and avoid confusion with the statutory three-year review under Art. L. 145-38.
  • Distortion rule (Art. L. 112-1 al. 2): the gap between multiplier index and divisor index must not exceed the revision frequency. Annual indexation = divisor one year before multiplier. If using a constant base index, update the base whenever the rent is modified by amendment, judicial revision, or any other event.
  • Never stipulate upward-only indexation: void on two independent grounds — distortion (Art. L. 112-1 al. 2) and bilateral variation principle (Cass. 3e civ., 14 Jan. 2016). Never stipulate a floor below which the indexed rent cannot fall — void on the same grounds.
  • Tunnel clauses: use with caution pending legislative or judicial clarification. A legislative reform validating them was not passed before the National Assembly was dissolved in 2024.
  • Fallback and prescription: include a fallback index clause in case the chosen index is discontinued. Apply indexation every year — failure does not waive the right but creates a retrospective catch-up risk (Cass. 3e civ., 15 Sept. 2010). No limitation period to challenge a void clause; 5-year prescription for the excess rent repayment claim.
Reviewing or Drafting an Indexation Clause?

The gap between a valid indexation clause and an unwritten one can be a single sentence — a floor provision, an upward-only mechanism, or a forgotten base update after an amendment. We review existing clauses for distortion risk and draft new ones that hold up over a nine-year lease term.

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This article is for general information and educational purposes only. It does not constitute legal advice and does not create a lawyer-client relationship. Laws and regulations may have changed since publication. Always seek qualified French legal advice on indexation clauses in a French commercial lease.