Business Contracts

The regular outflow of mass production involves various integrated distribution techniques. In the short channel, the manufacturer itself sells its products through branches or subsidiaries. Long distribution channels are based on a network of agreements between producers and independent distributors. This often results in complex contractual relationships involving both the supply of goods and the provision of services (loans, technical assistance, etc.), and it is not uncommon for the legal autonomy of suppliers to be altered by their economic dependence due to changes in the balance of power between major distributors . It is also not infrequent for the parties to enter into a framework agreement (e.g., an exclusive or selective distribution contract, or a franchise agreement), which sets out in varying degrees of detail the conditions of their subsequent relations (minimum order requirements, quotas, targets, pricing rules, competition arrangements, etc.), and defines the sales that will take place between distributor and producer . To this extent, distribution agreements are simply contracts of sale under ordinary civil law.

Along the lines of consumer law, which aims to protect the weaker party, namely the consumer against the business professional, a trend has developed towards protecting the distributor, seen as the weaker party, against the producer. 

Article 1111 of the Civil Code, instituted by Ordinance No 2016-131 of 10 February 2016, states that “the framework agreement is an agreement by which the parties agree on the general characteristics of their future contractual relations. Implementing agreements specify the terms and conditions of performance”.

49. Distribution contract