Business Contracts

Exclusivity can take the form of supply or purchasing agreements. In all cases, it presupposes the activity of buying for resale. As a general rule, an exclusive agreement covers both forms of exclusivity: the reseller, an independent trader, buys products exclusively from the supplier, who in return grants him territorial exclusivity for the resale of these products. In principle, the duration of …

Exclusive contract

Exclusivity can take the form of supply or purchasing agreements. In all cases, it presupposes the activity of buying for resale. As a general rule, an exclusive agreement covers both forms of exclusivity: the reseller, an independent trader, buys products exclusively from the supplier, who in return grants him territorial exclusivity for the resale of these products. In principle, the duration of an exclusive supply contract cannot exceed 10 years (Art. L. 330-1, Commercial Code). Any person who makes available to another a business name, a brand or a trade name, and requires an exclusive or quasi-exclusive commitment for the exercise of his activity, is obliged, prior to the signature of any agreement concluded in the common interest of the parties, to provide the other party with a document giving honest information, allowing the latter to enter into a commitment with full knowledge of the facts (Art. L. 330-3, Commercial Code).

 This pre-contractual information, which must be genuine and truthful, covers in particular the undertaking's longevity and experience, the state and development prospects of the market concerned, the size of the network of operators, duration, conditions of renewal, termination and transfer of the agreement, and the scope of the exclusive rights. The Court of Cassation has ruled that failure to comply with this obligation will invalidate the agreement only if it has had the effect of vitiating the other contracting party's consent .

The exclusivity agreement is very strongly characterized by intuitus personae, with the supplier able to choose his co-contractor at his own discretion . The supplier guarantees his distributor territorial exclusivity : the latter not only has the right to resell in the territory granted (active sales), but also outside this territory, on customer orders (passive sales). The supplier will necessarily exercise control over the reseller's technical and commercial activities, as well as its accounting and financial management. Interference in the dealer's management may give the supplier the appearance of a de facto manager, with all the resulting consequences in the event of insolvency proceedings (action to cover liabilities, extension of proceedings to the manager, etc.). When the exclusivity agreement is for a fixed term, the licensor is free not to renew it: no compensation is due to the licensee. However, the “right not to renew” recognized by case law must not degenerate into abuse . An open-ended agreement, on the other hand, may be terminated unilaterally at any time, provided that the terminating party gives reasonable notice and does not abuse the right . The parties also have the option of extraordinary termination (résiliation extraordinaire). They have the option of terminating for fault, irrespective of a termination clause or the intervention of the court. According to the Court of Cassation, the seriousness of one party's conduct may justify the other party's unilateral termination at its own risk, whether or not the agreement is for a fixed term .

Cass. com. 10 February 1998, LawLex200200005103JBJ.

Cass. com, 7 April 1998, LawLex200005121JBJ.

CA Paris, 1 October 2008, LawLex200900001609JBJ; Cass. com., 20 September 2016, LawLex201600001520JBJ: the network owner is liable when it fails to enforce the exclusivity it has granted to a partner.

Cass. com, 6 June 2001, LawLex200200005011JBJ; 10 January 2018, LawLex201800000066JBJ.

CA Versailles, 7 October 2010, LawLex201100000137JBJ.

Cass. 1re civ, 20 February 2001, LawLex201000000958JBJ.

Business Contracts

51. Exclusive contract

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

51. Exclusive contract

Demandez un accès gratuit au contenu exclusif Livv – juristes d’entreprise

Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise