French Competition Law provides a comprehensive review of the French rules relating to competition: restrictive agreements, commercial negotiation, abuses of a dominant position, procedure and merger control.

French Competition Law

Whether it concerns a common interest mandate ("mandat d'intérêt commun") , an agency agreement , a cooperative ,  a franchise agreement  or an exclusive distribution agreement , a non-compete obligation, central to this type of exclusive legal relationship is very commonly imposed for the duration of such contracts. Although a non-compete obligation is “de jure” for sales agents, it is often the  …

Distribution contracts.

In principle, the Law of 10 July 1965 (Artices 8 and 43) prohibits the inclusion in building co-ownership regulations of terms which are not justified with regard to the intended use of the buidling . Thus, an undertaking in a legal dispute with its lessor in relation to the renewal of its commercial lease may not bring a claim against the latter for exercising a similar activity in the same commercial center, insofar as the establishment of a similar competing commercial activity falls within the principle of the freedom of trade . In contrast, the courts would appear to be more sympathetic to shopping malls in co-owned property and seem to accept that the regulations of such buildings contain terms prohibiting changes to the commercial use of the lots and the type of trade defined in the regulations; this restriction is, in effect, consistent with the intended use of the building, which “is to ensure the basic needs of the inhabitants of an outlying neighborhood with no another possibility of obtaining provisions” . In addition, they recognize the validity of non-compete clauses in the deeds of sale of lots . However, a non-compete obligation which prohibits the establishment of similar outlets and is justified by the isolated location of the shopping mall, is absolute in nature. It can no longer be implemented when the mall is no longer considered to be isolated or out-of-the-way . 

See especially Cass. civ., 10 December 1986.

Cass.  3e civ., 1 October 2014, LawLex201400001001JBJ.

Cass. civ., 14 November 1976; Cass. 3e civ., 20 March 1978; 25 November 1980; 9 November 1982.

Shopping malls.

Whether it concerns a common interest mandate ("mandat d'intérêt commun") , an agency agreement , a cooperative ,  a franchise agreement  or an exclusive distribution agreement , a non-compete obligation, central to this type of exclusive legal relationship is very commonly imposed for the duration of such contracts. Although a non-compete obligation is “de jure” for sales agents, it is often the subject of contractual arrangements . On the other hand, it must be expressly included in franchise agreements. When the contract comes to an end, the restriction is lifted except where the contract provides for a post-contract non-compete clause . To be valid, the restriction must be proportional to the purpose of the contract  and limited in time or space . Thus, a non-reaffiliation clause which prevents the franchisee from carrying out any profitable activity for one year, the sole purpose of which is to enable the franchisor to reconstitute its network and to curb the penetration of the market by its competitors is disproportionate in nature and must be annulled . On the other hand, a reaffiliation clause which is limited in time and space and is proportionate to the beneficiary's interests is lawful even where there is no financial consideration .

Cass. com., 25 June 1991, LawLex200200001800JBJ; 16 March 1993, LawLex200200004843JBJ, reciprocal nature of the de jure non-compete obligation.

Cass. com., 4 June 2002, LawLex200200000483JBJ, recalling the conditions for a non-compete clause in an agency contract to be valid; Cass. com., 6 April 1993, LawLex200200001647JBJ.

Cass. com., 31 January 2012, LawLex201200000248JBJ, for a non-reaffiliation clause - not a non-compete clause - binding an agency having been part of a network of the Orpi real estate agencies, similar to a franchise network. Also see, for non-compete clauses, CA Bourges, 2 May 2013, LawLex201300000815JBJ and CA Rouen, 24 October 2013, LawLex201300001518JBJ, holding that the validity of a con-compete clause is not subject to the existence of financial consideration; but see CA Douai, 11 September 2008, LawLex200800001933JBJ and CA Toulouse, 11 September 2007, LawLex200800000834JBJ.

Cass. com., 26 June 2012, LawLex201200001236JBJ, specifying that the 3-year non-compete obligation by which the former members of a cooperative are bound, which is also limited to the administrative region of its headquarters and to the customers hiring skips at the time of the withdrawal, is proportionate to the legitimate interests of the cooperative.

Cass. com., 22 January 1991, LawLex200200005821JBJ; 13 October 1992, LawLex200200005946JBJ; 4 April 1995, LawLex200200001467JBJ; 14 November 1995. Third party complicity can also be sanctioned: see failure to comply with a preemption clause, CA Paris, 3 July 1998, LawLex200200001099JBJ.

CA Paris, 17 January 1989; 19 March 1990, LawLex200200001880JBJ, quashed by Cass. com., 15 December 1992, LawLex200200001676JBJ; CA Paris, 28 April and 6 May 1994; CA Paris, 9 May 1994, LawLex200200001575JBJ, reciprocal nature of the non-compete obligation in the context of an exclusive distribution contract.

CA Versailles, 28 October 1999, LawLex200200000893JBJ, regarding a non-compete clause incumbent on a commercial agent; Cass. com., 22 February 2000, LawLex200200000836JBJ, on the conditions for a non-compete clause in a franchise agreement to be valid. 

On the imposition by the court of a non-compete obligation limited in time and in space to a former common interest mandatary as a sanction for acts of unfair competition: Cass. com., 25 June 1991, LawLex200200001800JBJ.

Cass. com., 12 March 2002, LawLex200200000545JBJ.

Cass. com., 1 June 2003, LawLex200400000210JBJ : the two-year non-reestablishment clause in a franchise contract can only be voided for excessive restriction to the freedom of trade and industry without that it being necessary to establish that it is disproportionate in relation to the legitimate interests of the company; 8 June 2003, LawLex200300002735JBJ: the non-reestablishment preventing the use of a national brand emblem and the sale of products related to it for two years, limited in its duration and scope is valid in internal law; CA Paris, 2 December 2020, LawLex202000003568JBJ, for a term covering the entire territory of the concession, or even the entire national territory.

CA Paris, 25 February 2010, LawLex201000000684JBJ.

French Competition Law

68. Distribution contracts.

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

68. Distribution contracts.

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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