Business Contracts

While, in principle, under Article 2004 of the Civil Code, the principal is free to revoke the agency agreement without compensation, Article 2007, paragraph 1, allows the agent to renounce the agency agreement by notifying the principal of this renunciation. However, the second paragraph of this article stipulates that if renunciation causes harm to the principal, the latter must be compensated b …

Renunciation

While, in principle, under Article 2004 of the Civil Code, the principal is free to revoke the agency agreement without compensation, Article 2007, paragraph 1, allows the agent to renounce the agency agreement by notifying the principal of this renunciation. However, the second paragraph of this article stipulates that if renunciation causes harm to the principal, the latter must be compensated by the agent, unless he or she finds it “impossible to continue the agency agreement without suffering considerable harm”. Litigation related to an agent's renunciation  is rare. 

With regard to the scope of application of these provisions, case law has specified that while the agent, within the meaning of Articles 1984 et seq. of the Civil Code, may renounce the agency agreement entrusted to him for a valid reason, an agent appointed by judicial authority may not terminate his duties without having been expressly authorized to do so by a decision of the appointing authority . Thus, where representation is compulsory, the lawyer can only be discharged from his representation mandate on the day he is replaced by a new representative appointed by the party or, failing this, by the President of the Bar Association or the President of the Disciplinary Chamber, so that the message by which the lawyer informs the Court of Appeal that he is no longer representing the appellants has no effect on his representation mandate . Furthermore, the regulations applicable to commercial agents do not derogate from the provisions of Article 2007 of the Civil Code, so that when the agent's renunciation of his agency agreement harms the principal, notably because of its sudden nature, an indemnity is owed .

According to case law, the resignation of a company director in application of Article 2007 of the Civil Code constitutes a unilateral legal act, which has full effect as soon as it is brought to the attention of the company. Disregard of the statutory obligation to respect a period of notice can only give rise to a claim for damages, unless the resigning director can prove that it was impossible for him/her to continue in office . 

On the other hand, the waiver, by the company leasing the defective equipment, of the agency agreement to take legal action against the supplier, due to the refusal of the lessor, its principal, to transmit certain documents, is not justified, since the documents and information requested are not necessary for the exercise of the agency agreement and could have been obtained otherwise . In effect, the agent cannot avail himself of the provisions of Article 2007 of the Civil Code, which allow termination of the contract without indemnity, unless he establishes that continuation of the agency agreement would cause him considerable harm . In this respect, the courts consider that a mere threat, which has not been followed by any positive action, cannot constitute the consequences of considerable gravity making it impossible, under the terms of Article 2007 of the Civil Code, to continue the contract .

Cass. 1re civ, 10 June 1986, LawLex202200009667JBJ.

Cass. 2nd civ. 23 November 2023, LawLex202300014178JBJ. Cf. 1re civ. 4 October 2000, LawLex202300014154JBJ, holding that a lawyer who intends to terminate his agency is discharged after having informed his principal, the judge and the opposing party, provided that he gives his client sufficient notice to enable him to defend his interests.

Cass. com. 14 March 1995, LawLex200200005453JBJ.

Cass. soc., 1 February 2011, LawLex202200004862JBJ.

Cass. com. 15 September 2015, LawLex202400000137JBJ.

Cass. com. 23 November 1960, LawLex202400000136JBJ.

Cass. 3e civ, 27 September 2000, LawLex202400000138JBJ.

Business Contracts

509. Renunciation

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Les notions juridiques connexes

509. Renunciation

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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