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

Where a sponsorship agreement is entered into without fixing its duration, the parties may, in application of the law of obligations, terminate it unilaterally. The unilateral termination of a sponsorship agreement of indefinite duration does not give rise to damages, except in the event of abuse . 
In application of Article 1193 (formerly 1134, para. 2) of the Civil Code, a fixed-term sponsorship …

Principle 

Where a sponsorship agreement is entered into without fixing its duration, the parties may, in application of the law of obligations, terminate it unilaterally. The unilateral termination of a sponsorship agreement of indefinite duration does not give rise to damages, except in the event of abuse . 

In application of Article 1193 (formerly 1134, para. 2) of the Civil Code, a fixed-term sponsorship agreement runs until its term, unless it includes an immediate termination provision  or one of the parties asks for judicial annulment of the contract for non-performance. The sponsor may thus terminate the contract without prior notice where the contractual provisions provide for a possibility of immediate termination and the sponsored athlete is unable to show that he participated in the number of trials stipulated in the contract . In all cases, the parties to a fixed-term sponsorship agreement remain free not to renew the contract and do not have to justify that decision, even if the contract itself provides for automatic renewal without any possibility to terminate . 

Where there is a tacit renewal, if it is not possible to ascertain whether the sponsor or the sponsoree wanted to renew the fixed-term contract, a contract that is pursued beyond the original term acquires the characteristics of an open-ended agreement able to be terminated by the parties at any time . Thus, the unilateral termination of a sponsorship agreement having been tacitly renewed and thereby transformed into a an open-ended contract, was held to comply with the requirements of current Article 1193 of the Civil Code, as the parties had expressed their common intention to continue their contractual relations, even if in the course of the negotiations, they had failed to agree as to its duration and the budget to be allocated to the sponsoree . Similarly, the unilateral termination of a sponsorship agreement not containing a clause stipulating its exact duration cannot be regarded as abusive and give rise to compensation . 

CA Saint-Denis-de-la-Réunion, 31 July 2009, LawLex201300000583JBJ. 

Also see CA Versailles, 25 June 2009, LawLex201300000515JBJ, case of a termination taking place whereas the cumulative conditions for the possible continuation of contractual relations (approval at the choice of the sportsperson and establishment of competitions) were not fulfilled.

CA Aix-en-Provence, 12 February 2013, LawLex201300000721JBJ. By contrast, a sponsored athlete considering that the sponsor is not respecting its obligations may only seek judicial termination of the contract, after a formal demand letter to comply with the obligations on penalty of termination solely at the other's expense is sent and has been unsuccessful, CA Paris, 9 November 2005, LawLex200600001386JBJ.

CA Paris, 15 November 2006, LawLex201300000568JBJ.

CA Saint-Denis-de-la-Réunion, 31 July 2009, cited above.

Cass. 1re civ., 15 November 2005, LawLex200600001358JBJ.

Cass. com., 19 January 1999, LawLex200300003131JBJ upholding CA Paris, 12 December 1995, LawLex200300001735JBJ: disputed clause stipulating that the sponsor "hopes that its activity as patron of the orchestra will continue over time". 

The sponsoree is bound by a promotional obligation, which is a results-based obligation consisting, inter alia, in wearing the sponsor's colors and participating in public relations operations. Non-performance of this obligation gives rise to liability and entitles the sponsor to the payment of damages . As the resolutory condition is always implied in synallagmatic contracts in the case where one of the parties does not comply with one of the commitments binding it, the court may void the contract at the sponsoree's expense, in the event of partial breach of essential obligations  (Civil Code, Article 1221 et seq.). 

When the commitments also include an exclusivity or non-compete obligation , in the event of a breach, the sponsoree may be required to compensate for the injury suffered by its sponsor having lost the media interest from which he was entitled to benefit . This result also may also be provided by a penalty clause sanctioning the breach of the exclusive promotion obligation . In addition, by associating, without informing the sponsor, with one of the direct competitors of the latter, the sponsoree breaches its contractual exclusivity and non-compete obligations . This is also the case for a sponsored athlete having deliberately put himself in a situation rendering it impossible to perform the sponsorship agreement by signing another sponsorship agreement with another manufacturer  or where the sponsoree appears in public and in photos, wearing clothes of a competing brand . 

The breach by the sponsoree of its best efforts obligations, generally related to its performance, is most often sanctioned by the absence of renewal of the sponsorship.

The sponsorship agreement may contain a priority clause to the renewal in favor of the sponsor. In this case, the conclusion of a sponsorship agreement in violation of the priority right may be sanctioned by an award of damages in compensation for the sponsor's loss of profits , provided though that the parties had agreed on the essential elements of the contract to be renewed .

Lastly, the sponsoree's breach can lie in the way the sponsorship agreement is terminated. Although the sponsoree may unilaterally end an indefinite-term sponsorship agreement, provided that this is not done abusively , the unilateral early termination of a fixed-term contract may incur that party's liability and expose it to the payment of damages . Therefore, a sponsoree seeking judicial annulment  of a fixed-term sponsorship agreement without first formally asking the sponsor to perform its obligations, is deemed to have terminated the agreement at its sole fault .

CA Paris, 7 October 1998, LawLex200300001737JBJ.

CA Paris, 24 January 1991, LawLex200300001723JBJ.

The unilateral termination of an open-ended sponsorship agreement can only give rise to a right to damages in the case of abuse, CA Saint Denis de la Réunion, 31 mai 2009, LawLex201300000583JBJ.

CA Paris, 9 November 2005, LawLex200600001386JBJ: the harm resulting from the early termination of the contract is at least equal to the amount of the remuneration paid and the cost of the equipment provided, with the sponsor claiming in addition that he has been deprived of a significant amount of flattering publicity that the win of the athlete at the Olympic Games would have brought.

 Civil Code, Article 1227: "Judicial annulment can in any case be sought in the courts".

CA Paris, 9 November 2005, LawLex200600001386JBJ, cited above.

CA Amiens, 4 April 1995, LawLex200300001748JBJ.

CA Paris, 9 November 2005, LawLex200600001386JBJ.

CA Colmar, 17 March 2011, LawLex201300000723JBJ.

CA Versailles, 11 October 2007, LawLex201300000722JBJ.

CA Colmar, 17 March 2011, LawLex201300000723JBJ: The sponsored party cannot therefore rely on the non-performance defense (anticipatory breach), or request that the contract be voided for fault by its co-contractor.

CA Amiens, 4 April 1995, LawLex200300001748JBJ, finding that after acceptance of the offer of renewal, the contractual priority right must be respected under penalty of giving rise to damages.

Cass. 1re civ., 24 November 1998, LawLex200300003134JBJ holding that the letter by which the sponsoree is informed of the intention of the sponsor with respect to the renewal of their contractual relationship does not establish the agreement of the parties as to the essential elements of the contract to be renewed.

 Breach by sponsored party 

The sponsorship agreement places on the sponsor a financial obligation which is an obligation to achieve a stated result. It therefore cannot elude its commitments by terminating the agreement without notice and without making the payment installments or causes injury to the sponsoree. The unilateral and sudden termination by the sponsor may be sanctioned by an order to make the payments originally provided for and an award of damages for the whole of the sponsoree's loss . Where the sponsor does not fulfill its obligation to pay the fee and terminates the sponsorship agreement contract without serious grounds, it incurs liability in respect of the sponsored party . 

The sponsor's fault may also derive from the conditions under which the agreement is terminated. The sponsor having initiated the termination of the sponsorship agreement is at fault if it continues to use the image of the sponsored party . The lack of clarity of the sponsorship contract invoked by the sponsor to unilaterally terminate the agreement does not constitute a legitimate cause of termination  . The late termination of a tacitly renewable sponsorship contract can also give rise to damages . The Court of Appeal in Lyon has ruled that the late or unjustified withdrawal by the sponsor causes a prejudice to the sponsoree with regard to the sporting and financial commitments entered into for the new season which had to be revised, even where no promotional or advertising benefits were carried out in return .

Lastly, a sponsoree able to show proof of having fulfilled his promotional obligation is entitled to seek termination for fault on the sponsor's part where the latter has failed to pay the annual fee promised in consideration of the sponsored party's undertaking .

CA Aix-en-Provence, 20 December 1991, LawLex200300001749JBJ.

CA Poitiers 5 October 1994, LawLex200300001763JBJ.

CA Paris, 15 November 2005, LawLex200600001358JBJ.

Cass. 1re civ., 17 November 1999, LawLex200300003137JBJ.

Cass. 1re civ., 6 May 1997, LawLex200300003133JBJ, setting aside CA Paris, 20 December 1994, LawLex200300001722JBJ.

CA Lyon, 2 July 2009, LawLex201300000569JBJ.

CA Besançon, 6 April 2011, LawLex201300000553JBJ.

French Consumer Law

66. Principle

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66. Principle

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