French Consumer Law is a comprehensive and comparative overview of French and EU law in this field, covering: advertising, unfair commercial practices, conditions for the validity of contracts, unfair terms, product conformity, latent defects, product safety.

French Consumer Law

To ensure the transparency of transactions carried out in the advertising sector, Article 20 of the 1993 Law provides that “any discount or tariff advantage of any nature whatsoever granted by the seller must appear on the invoice issued to the advertiser and may only be retained in whole or in part by the intermediary by virtue of an express stipulation in the mandate agreement”. In application o …

Agency's obligations

In addition to the obligation to correctly deliver the message, which is not covered by the Law of 29 January 1993, advertising media or media sales companies which are regarded as equivalent to advertising media under Article 26 of the Law, are subject to four obligations: they must (1) communicate their general terms and conditions of sale and prices, (2) directly invoice the purchase of advertising spaces to the advertiser, (3) not make payments to or confer benefits on any agency and (4) account for the terms under which the services have been carried out.

1) Communication of general terms and conditions of sale

Article 18 of the Law of 29 January 1993 extended the obligation to publish unit price scales and terms of sale, now set out in Article L. 441-1 of the Commercial Code. According to the Circular of 19 September 1994, the obligation applies to the advertising medium, although it is inaccurately qualified as a “seller” by the Law, or where applicable, the media sales company, which are “now [required to] have a price scale and to communicate it to any person requesting it”. These rules, which called into question the solutions adopted previously by the courts  have nevertheless been enshrined by the Court of Cassation . Ordinance 2019- 359 of 24 April 2019 takes another step backwards: from now on, the disclosure of the general terms and conditions of sale is now imposed on those having established them (Commercial Code. C., Art. L. 441-1, II).

Under Article 20, “even if purchases [of advertising spaces] are not paid directly by the advertiser to the seller, the invoice is communicated directly by the latter to the advertiser” . Moreover, according to paragraph 3 of the article, “any discount or tariff advantage of any nature whatsoever granted by the seller must appear on the invoice issued to the advertiser [...]”. Article 25, 2° of the law in its wording arising from Ordinance 2019-698 of 3 July 2019 sanctions the breach of the obligation to provide an invoice by referral to Article L. 441-9 on invoicing which now imposes an administrative fine of EUR 75,000 for a natural person and EUR 375 000 for a legal person. 

According to settled case-law, non-compliance with the obligation to communicate the invoice to the advertiser does not prevent the medium from appealing against the latter . In fact the sole aim of the obligation in question is to prevent hidden payments made to advertising agencies found prior to the adoption of the law. In addition, by the operation of the mandate, the advertiser is a party to contracts for the purchase of advertising space concluded in its name and on its behalf by the agency.

The advertising medium does not have to invoice the service directly to the advertiser when the advertising message is delivered primarily on the territory of a foreign State. In effect, under Article 27, the Sapin Law is applicable regardless of the place of establishment of the intermediary" whenever the advertising message is carried out for the benefit of a French undertaking" and where “it is primarily delivered on the French territory”. The purpose of the regulation is to prevent advertising intermediaries from evading the legal provisions by offshoring their activities. Where those two cumulative conditions are not met, the medium is not obliged to directly invoice the advertiser and may, in that case, charge the agency .

Article 25, 3°, c) of the 1993 Law imposes a fine of EUR 300 000 upon any seller of advertising space who makes any payment or grants any advantages of any kind to the intermediary of the advertiser. These provisions, which provide for no exceptions, seem somewhat inconsistent with those of Article 20 according to which “any discount or tariff advantage of any nature whatsoever granted by the seller [...] may only be retained in whole or in part by the intermediary by virtue of an express stipulation in the mandate agreement”. The Circular of 19 September 1994 clarifies the meaning of this apparent contradiction: “The purpose of this provision is to ensure that the remuneration of the intermediary is fixed by negotiation between the intermediary and the recipient of the service rendered ensuring full transparency with regard to the latter”. Thus Article 20 “does not prohibit the media from granting rebates in respect of services rendered by the intermediary, such as a payment security. But such discounts must be passed on to the advertiser. It is for the intermediary and the advertiser when negotiating terms to modify the contract in order to make the intermediary the beneficiary of all or part of such rebates”.

Article 23 of the Law of 1993 demands direct accountability to the advertiser from the advertising medium or media sales company selling advertising space in the month following the publication of the advertising message, of the conditions under which the services have been carried out. Specifically, where it is necessary to make a change to the terms and conditions for the distribution of the message, the seller of the advertising spaces must notify the advertiser thereof and obtain his approval and set out the modifications made. The Macron Law of 6 August 2015 amended the text to extend the accountability obligation to the digital advertising sector. The modes of application of the obligation have been specified by decree in Council of State, which was eventually adopted on 9 February 2017 . A report is required for digital advertising services which are defined as those intended to broadcast messages on any medium connected to the internet such as PC, tablets, mobile phones, TVs  and digital billboards  (Art. 1). The decree requires the seller of advertising space to give the advertiser details about when and where the advertisement will be displayed, the overall price of the campaign and the unit price of the advertising spaces invoiced (Art. 2). The text adds significantly to the information obligation where the campaign is based on “real time service purchasing methods on unsecured space, notably by auction”. This allows the advertiser to ensure the effective implementation of the services and of their features, the technical quality of the services and the means used to protect the image of its brand (Art. 3). The scope of application of the decree is limited to France: the provisions do not apply to sellers of advertising space established in another Member State of the European Union or countries in the European Economic Area as long as those countries are bound, under their national law, by equivalent accountability obligations (Art. 4). The decree entered into force on 1 January 2018.

The courts consider, as they do for the failure to provide invoices to advertiser, that failure to provide a performance report for each of the purchase orders to the advertiser does not affect their validity . The advertiser is therefore required to pay the advertising medium, notwithstanding the breach by the latter of the information obligation .

CA Orléans, 11 September 1991, LawLex200200000231JBJ, dispensing the media company form providing a price scale where it had not established one; CA Paris, 3 June 1993, LawLex200200000180JBJ, exempting a media sales company from the obligation of communication because of its status as a service provider, which was not covered by the texts applicable on the date of the indictment.

Cass. com., 18 January 1994, LawLex200200000118JBJ, censuring Orléans, 11 September 1991, LawLex200200000231JBJ, cited above.

T. com. Paris, 3 April 1996, LawLex200300001426JBJ.

T. com. Paris, 3 April 1996, LawLex200300001426JBJ, cited above;Cass. com., 4 October 2011, LawLex201200000771JBJ, quashing CA Versailles, 1 July 2010, LawLex201200000831JBJ and, on referral, CA Versailles, 21 March 2013, LawLex201500001082JBJ; CA Aix-en-Provence, 7 December 2011, LawLex201200000844JBJ ; CA Dijon, 5 February 2013, LawLex201500001072JBJ; but see CA Paris, 18 December 1998, LawLex200300001478JBJ and CA Angers, 18 January 2011, LawLex201200000825JBJ, ruling that the sending of the invoice to the agency amounts to a waiver of the right to bring direct action.

CA Versailles, 22 October 1998, LawLex200300001438JBJ.

Decree No 2017-159 of 9 February 2017 on digital advertising services, OJ No 36 of 11 February 2017.

CA Versailles, 10 June 2010, LawLex201200000794JBJ.

CA Versailles, 21 March 2013, LawLex201500001082JBJ, cited above.

Obligations of advertising medium

The Law of 29 January 1993, in line with its objective of transparency, requires the advertising medium to provide directly to the advertiser the relevant invoices for purchases of advertising spaces and prohibits any payments from the medium to the agency. It does not however prohibit the advertiser from paying the medium via the agency. Indeed, under Article 20, the obligation to directly invoice applies “even if the purchases [...] are not paid directly by the advertiser to the seller”. Conferring a payment mandate on the agency is not without risk for both advertiser and advertising medium: it is not unusual for advertisers to pay the agency, but the agency fails to pay the medium either due to dishonesty or due to an inability to pay. Do payments made into the hands of the agency release the advertiser or is there a risk it will have to pay twice? The solution differs depending on whether the agency is regarded as the agent of the advertiser or the medium. A claim for payment by the advertising medium can also be complicated by the assignment of its claim to the advertiser. Finally, the advertiser can, in an action brought by the medium, be bound by jurisdiction clauses accepted by the agency.

Under Article 1998 of the Civil Code, “the principal is required to execute the commitments undertaken by the agent [...]”. Therefore, according to settled case law, payments made into the hands of the agent do not discharge the obligation in respect of the medium , who enjoys a direct right of action against the advertiser , in particular when the advertiser was aware of the financial difficulties of the agency . A claim of the nullity of the mandate cannot be enforced against the advertising medium . The direct action can however only relate to the payment of publications falling within the scope of application of the Law of 29 January 1993 .

In the absence of any express mandate, the courts adopt the same solution on the basis of the apparent authority theory (apparent mandate). Thus, when the circumstances of the case give legitimacy to the belief of the medium in the existence of a mandate, it is entitled to bring direct action against the advertiser . If the medium seeks to rely on an apparent mandate, evidence of circumstances going beyond the mere allegations of the alleged agent capable of justifying that belief must be brought  failing which the claim will be rejected . Likewise, the mere fact that the advertiser has performed without complaint the obligations undertaken by the intermediary does not create a legitimate belief for the advertising medium of the existence of an apparent mandate . 

To avoid such pitfalls, the advertising medium must find out who the clients of the agency are , for example by asking for letters of accreditation from them  or by obtaining a notification of the mandate . It must also bring evidence in support of its claim  and where it contributed, by its own fault, to the loss suffered, can be held jointly liable with the advertiser  or lose the direct right of action .

Articles 21 and 25 of the Law of 29 January 1993 only prohibit the payments to the agency by the advertising medium. On the other hand, it is not prohibited for the medium to charge the agency with recovering payments for its services from the advertiser. The courts initially found the existence of a mandate for the collection of payments from the fact that the agency rather than the advertising medium was the recipient of the invoice, contrary to the requirements of Article 20. In that case, when the advertiser has paid the agency but the agency has not transferred the payment received to the advertising medium, they deemed payment by the advertiser to be discharged . The case law was then overturned with the courts holding that the fact that invoices were not sent to the advertiser no longer amounts to an apparent mandate to the agency for recovery of payments and that the advertising medium retains a direct right of action against the advertiser. In addition, the mandate given to the agency to pursue the payment of unpaid debts is not an obstacle to direct action by the principal, i.e. the advertising medium, against the advertiser . Finally, the holder of a mandate for recovery issued by the advertising medium, agency or media sales company may not file a claim for payment against the advertiser in its own name as the claim will be inadmissible for lack of standing to bring proceedings .

What remedies are available to an advertising medium when the agency with a mandate from the advertiser for both the placement and the adjustment of insertion orders bills that service to its principal and then transfers its claim to a factoring company before being placed under legal administration? The Court of Cassation has ruled that the advertising medium cannot claim against the factoring company . In effect when the agency's claim against the advertiser is certain, of a fixed amount and due, it is validly acquired by the factoring company. The medium must therefore, by virtue of the direct right of action granted by Article 1998 of the Civil Code, exclusively direct its action against the advertiser .

The agency can in principle only transfer the payment debt against the advertiser corresponding to its agency commission, but not the debt of the advertising medium as it is not the owner of that debt. The transferee bank of all the agencies' debts can therefore only act against the advertiser for a part of the debt, where in its capacity as a regular contracting party of the agency, it cannot be unaware of the fact that it does not have any claim over the rest . 

Where the advertising medium brings an action for payment against the advertiser, are the terms set out in the purchase order including the clause conferring jurisdiction signed by the agency in its capacity as agent for the purchase of advertising space enforceable?

Several rulings appear to say that they are . Those decisions are based on the provisions of the first paragraph of Article 1998 of the Civil Code, under which “the principal is required to execute the commitments made by the agent in accordance with the power given to him”. The Court of Cassation has however adopted a stricter interpretation of the article: it considers that the signing of a jurisdiction clause constitutes an act which exceeds the scope of ordinary powers and rules out its application when that faculty is not included in the mandate, which merely authorizes the agent to sign insertion orders .

Cf. the exceptional situation where the contract provides that the agency is debtor of the advertising medium,Cass. com., 30 November 2004, LawLex200500005712JBJ.

 T. com. Nanterre, 21 October 1992, LawLex200300001405JBJ; CA Paris, 6 October 1995, LawLex200300001417JBJ; 1 March 1996, LawLex200300001423JBJ; 10 October 1997, LawLex200300003098JBJ; 26 November 1999, LawLex200300003056JBJ upheld byCass. com., 28 January 2003, LawLex200300002939JBJ; CA Paris, 15 November 2002, LawLex200600001178JBJ, upheld byCass. com., 27 September 2005, LawLex200600001165JBJ; CA Paris, 2 June 2005, LawLex200600001410JBJ; CA Versailles, 7 October 1999, LawLex200300001533JBJ; 21 March 2013, LawLex201500001082JBJ; CA Aix-en-Provence, 7 December 2011, LawLex201200000844JBJ.

CA Versailles, 2 May 1996, LawLex200300002943JBJ.

CA Limoges, 13 September 2011, LawLex201200000883JBJ, even imposing notification.

Cass. com., 16 October 2001, LawLex200300003204JBJ upholding CA Nîmes, 19 November 1998, LawLex200300003336JBJ: in this case, the advertising medium could not establish to the requisite legal standard that it had not been paid because the agency, mandated by several advertisers, had made an overall payment for several insertions which could not be identified individually. 

Cass. com., 1 April 2003, LawLex200300002930JBJ, upholding CA Paris, 19 May 2000, LawLex200300001946JBJ: in this case, the medium had negotiated payment deadlines with an agency experiencing cash flow problems without informing the advertiser about those problems and had not sent all the invoices corresponding to its services in violation of the provisions of Article 20 of the Law of 29 January 1993. This behavior had prevented the advertiser from finding out that the payment made to  the factoring company having taken over the rights of the agency covered not only to the payment of the agency, but also that of the advertising medium. 

Cass. com., 8 January 2002, LawLex200300002931JBJ, holding that the payment by the advertiser to the agency discharges the advertiser when the medium has granted excessive payment periods to the agency; CA Paris, 9 March 2001, LawLex200300002356JBJ.

CA Paris, 2 June 1995, LawLex200300001488JBJ; 18 December 1998, LawLex200300001478JBJ;Cass. com., 3 December 2002, LawLex200300002935JBJ, based on the apparent mandate theory.

CA Paris, 27 May 2011, LawLex201200000881JBJ.

CA Paris, 19 May 2017, LawLex201700000920JBJ.

Cass. com., 29 October 2002, LawLex200300002936JBJ, upholding CA Paris, 5 June 1998, LawLex200300002309JBJ: there is no breach of the verification duty by the factoring company when the debt of the agency accepted by it is contractually certain.

See in particular Cass. 1re civ., 16 December 1997, LawLex200300002915JBJ.

CA Versailles, 10 January 2002, LawLex200300002333JBJ.

Cass. com., 28 January 2003, LawLex200300002939JBJ, upholding CA Paris, 26 November 1999, LawLex200300003056JBJ.

CA Paris, 2 June 1995, LawLex200300001488JBJ; 22 March 2000, LawLex200300001486JBJ: in the context of its mandate drafted in general terms, the agency can validly agree to a jurisdiction clause on behalf of its principal insofar as said clause does not give rise to any legal consequences with regard to the rights to which the principal is entitled; 28 September 2001, LawLex200300002336JBJ, clause in the general terms and conditions of the advertising medium.

Cass. com., 23 January 2001, LawLex200300002932JBJ.

CA Paris, 28 September 2001, LawLex200300002336JBJ.

CA Dijon, 6 December 2007, LawLex201200000755JBJ, ruling out a direct right of action for payment of publications made in execution of legal or regulatory obligations imposed on undertakings to ensure the market is properly informed.

See especially Cass. com., 11 February 1997, LawLex200300002915JBJ, upholding CA Agen, 11 January 1995, LawLex200300001407JBJ; CA Paris, 27 February 1997, LawLex200300001435JBJ.

Cass. com., 23 March 1993, LawLex200300003025JBJ.

CA Rouen, 10 January 1995, LawLex200300001489JBJ.

Cass. com., 7 March 2006, LawLex200600001164JBJ, censuring CA Aix-en-Provence, 14 October 2003, LawLex200600001351JBJ.

CA Paris, 16 October 1998, LawLex200300001538JBJ.

Advertising medium's right to payment

To ensure the transparency of transactions carried out in the advertising sector, Article 20 of the 1993 Law provides that “any discount or tariff advantage of any nature whatsoever granted by the seller must appear on the invoice issued to the advertiser and may only be retained in whole or in part by the intermediary by virtue of an express stipulation in the mandate agreement”. In application of this provision, the courts make a distinction between payments made to agencies purely in the context of their role as intermediaries which must be passed on to the advertiser and payments received relative to the business contract between agency and advertiser (screen printing, printing, photo engraving or composition/execution) and their consultancy role, which can be kept .

Furthermore, when an agency combines the functions of purchasing advertising space with media planning consultancy or media recommendation services, upstream, it cannot, under Article 22 of the Law, receive remuneration or benefits of any kind from the seller of advertising spaces. Non-compliance with this prohibition is punishable by a EUR 300 000 fine . In addition, the general terms of sale must state any ties it or its group has with the sellers of advertising space recommended  and the agency must not deliberately give the advertiser false or misleading information as to the characteristics or the price of advertising space of the medium it has recommended .

CA Paris, 22 September 2000, LawLex200300002086JBJ.

Law No 93-122 of 29 January 1993, Article 25, 3°, d.

Article 25, 3°, a): subject to a fine of EUR 300 000.

French Consumer Law

54. Agency's obligations

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54. Agency's obligations

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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