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

Article L. 121-19 (former Article L. 121-35) of the Consumer Code limits the prohibition of sales with bonuses to bonuses of products, property or services. The term “property” was added by the Ordinance of 1 December 1986 , to include real estate sales in the scope of the regulations on sales with bonuses. Case law strictly interprets these provisions. Thus, the prohibition of sales with a bonus  …

 Product, good or service

According to Article L. 121-19 (former Article L. 121-35) of the Consumer Code, in order for the offense of unlawful bonuses to be constituted, the bonus must be intended for consumers. It is immaterial that the number of consumers concerned is limited . In principle, it cannot concern third parties to the main contract. Indeed, although Article L. 121-19 of the Consumer Code refers only to the delivery to the consumer without distinguishing whether or not he is a party to the contract, the principle of strict interpretation of criminal laws appears to exclude any extension of the scope of Article L. 121-19 to third parties . The prohibition only concerns bonuses offered to consumers who purchase, for consideration, the main product or service.

Originally, the prohibition of sales with bonuses also covered professionals . Although, under the current rules, the bonuses offered by a manufacturer to its dealers or agents are not covered by the prohibition, the producer who offers the consumer, even through a dealer, a product giving entitlement to the award of a bonus, is subject to the provisions of Article L. 121-19 .

The determination of the professional status could prove to be difficult to the extent that, before the Hamon Law , the texts did not define the concept of consumer. Now, Article 1 of the Consumer Code defines a consumer as “any natural person who acts for purposes other than his commercial, industrial, craft, or a liberal activity”, the professional being defined a contrario.

Between professionals, the promotion of sales by means of bonuses may nevertheless raise difficulties with regard to competition law : the granting of particularly varied and significant bonuses and special benefits by a company which is in a dominant position on a narrow market may characterize an abuse of a dominant position . Prior to Law No 2008-776 of 4 August 2008 on the modernization of the economy, sales with bonuses to professionals could also fall within the scope of the prohibition of discriminatory practices and incur the manufacturer's liability in this regard .

Cass. com., 5 April 1995, LawLex200300001705JBJ, finding the offense of sale with an unlawful bonus for the offer of a watch to the first hundred buyers of a set of cookware.

 Cf. CA Versailles, 23 January 1980, rejecting the qualification of bonus in favor of that of gift regarding an object delivered within the framework of a sponsorship operation, on the grounds that it is the person who concludes the principal contract who benefits from the bonus, as the contractor and beneficiary must be one and the same person. This solution therefore excludes from the scope of the regulations on sales with bonuses all sponsorship operations in which the sponsor receives a gift if the "sponsoree" contracts.

 The prohibition of sales with bonuses contained in Law 51-356 of 20 March 1951, applies both to contracts concluded with consumers and to those concluded with professionals.

Cass. com., 11 March 2003, LawLex200300001197JBJ.

 Law No 2014-344 of 17 March 2014 on consumption.

 See Cass. com., 21 March 1995, LawLex200300001581JBJ: on the difficulties for the manufacturer or advertiser to comply with the prohibition to fix a minimum resale price laid down in Article L. 442-5 of the Commercial Code and for resellers, not to market the product concerned at a price lower than its purchase price from the manufacturer without being guilty of the offense of reselling at a loss, punished by Article L. 442-2 of the same Code.

CA Paris, 6 May 1997, LawLex200200002467JBJ; Cass. com., 14 February 1995, LawLex200200003841JBJ, finding an abuse of a dominant position within the meaning of Article 102 TFEU.

 To facilitate the free negotiation of "front" margins (reduction of prices in the form of rebates or discounts), the LME Law laid down the principle of the free negotiability of supplier's prices without consideration and abolished the prohibition of discriminatory practices under I, 1° of Article L. 442-6. The buyer can thus obtain higher financial advantages that those its competitors benefit from without justifying an actual consideration. In addition, since the LME Law allows suppliers to differentiate their general conditions of sale and therefore their prices, according to the categories of their choice, the question whether the bonus should be included in the price lists and sales conditions of the company that offers it no longer arises with the same acuteness, especially as the Law of 4 August 2008 no longer requires that the special conditions of sale be justified by the provision of specific services. 

 Recipient of the bonus: the consumer

The offense of sales with bonuses implies the combination of several elements:

(i) a sale  or offer for sale and (ii) the supply of free goods or services, (iii) accessory to the sale.

The conclusion of the main contract does not constitute a condition for the application of the regulations. Indeed, Article L. 121-19 (former Article L. 121-35) refers to “any sale or offer of sale” and “service or offer of services”. It is not necessary for the sale to be made or for the service to be performed for the offense to be characterized. Consequently, the mere offer of goods or services accompanied by the promise of a bonus to potential contracting parties is criminally punishable, even if no contract is subsequently concluded. Thus, the advertising message that offers the consumer a product or service with a bonus, falls under the regulations on sales with bonuses.

However, in order for the offense of sale with a bonus to be characterized, the bonus must be conditional on a sale . The delivery of a product to consumers free of charge, without any link with the sale of another product, does not constitute a sale with an unlawful bonus . The link to a main agreement precisely distinguishes the bonus from the gift. In fact, in the absence of any obligation to contract, the free delivery of a product or free provision of a service is not a bonus, but a gift, a perfectly lawful promotional technique, as long as the gift offer is not subject to any direct or indirect purchase condition . However, a practice such as the “fidelity gift voucher” offered at the time of a sale, which, on presentation of the voucher alone, permits the collection of a product without any payment, is likely to characterize the offense of unlawful bonus .

The offense may exist even if the delivery of the product of service offered as a bonus by a first undertaking is linked to the conclusion of a contract for pecuniary interest with a second undertaking. Under the old law, which did not refer to the conditions of unfairness laid down in Article L. 121-1 (former Article 120-1) of the Consumer Code, this was the case for the attribution by drawing lots of air tickets at the initiative of a furniture seller, without an initial purchase obligation, since the winner was responsible for the costs of staying in hotels imposed by the agency issuing the ticket. Despite the absence of a link between the main contract and the bonus, this allocation was classed not as a lottery within the meaning of Article L. 121-20 (former Article L. 121-36) of the Consumer Code, but as an unlawful bonus incurring the liability of the travel agency, on the grounds that the tickets were offered to all purchasers of holidays . In the case of commercial lotteries, prizes are only due to “winning” buyers, i.e. to buyers who have been drawn by lot, while in the sale with a bonus, it is acquired, in principle, by all purchasers of the product offered for sale.

 All contracts are liable to fall within the scope of this regulation, whether nominate or innominate, civil or commercial: Article 17, A, II of Law 89-412 of 22 June 1989 thus prohibits the award as a prize or bonus of any living animal, except for livestock in the framework of festivals, fairs, competitions and events of an agricultural nature.

 Cass. crim., 3 January 1983, LawLex200400000098JBJ.

 CA Riom, 6 June 1990, LawLex200200001869JBJ, also excluding any act of unfair competition for a company operating a supermarket that had announced the free distribution of 5,000 loaves of bread to any consumer who made the request.

 CA Riom, 6 June 1990, LawLex200200001869JBJ, confirming the freedom to distribute gifts outside of any sale.

 CA Paris, 3 March 1992, LawLex200300001725JBJ, delivery by a trader of "fidelity gift vouchers" for obtaining several gifts on a list or usable as vouchers against any purchase in the store. For the Court of Appeal, only the second possibility is lawful, insofar as it gives entitlement to a reduction, whereas the first offer is regarded as a sale with a bonus due to the award of a free item.

 TGI Rennes, 23 September 1992, LawLex200300001848JBJ, upheld by CA Rennes, 14 January 1993, LawLex200300002390JBJ.

 Link with the principal sales contract

Article L. 121-19 (former Article L. 121-35) of the Consumer Code limits the prohibition of sales with bonuses to bonuses of products, property or services. The term “property” was added by the Ordinance of 1 December 1986 , to include real estate sales in the scope of the regulations on sales with bonuses. Case law strictly interprets these provisions. Thus, the prohibition of sales with a bonus does not apply to payments of a sum of money or price reduction equivalent to the payment of a sum of money , nor to cash discounts or rebates granted by professionals on their products or services, subject to compliance with the provisions of Article L. 442-2 of the Commercial Code relating to selling at a loss .

The former Article L. 121-35 also provided for certain bonuses. Under paragraph 2 of this text, it was specified that “where such bonuses consist[ed] of items distributed to meet environmental requirements, they [should] be fully recyclable, whether fire-proofed recyclable cardboard or food-grade inks”. This requirement disappeared following the recodification Ordinance of 14 March 2016.

As positive law stands, the usual packaging of a product essential to its normal use, the after-sales services and parking facilities offered by traders to their customers may constitute bonuses within the meaning of Article L. 121-19 (former Article L. 121-35). Previously, the offense assumed that the bonus was not a product or service required for the “normal use of the product, good or service being sold” within the meaning of Article R. 121-9 of the Consumer Code, now repealed. The usual packaging of the product could not therefore be considered as a bonus  when it was indispensable for its normal use.

Prior to the Hamon Law, the prohibition of sales with bonuses did not apply if the bonus consisted of a product, good or service “identical to the goods being sold or the service”. The concept of identity was assessed restrictively. It implied that the product was similar to the main product. The condition of identicality referred to products or services , of the same nature  or same type  as the main product, or even complementary to it . In particular, it imposed an identicality of technical characteristics and therefore of the substantial qualities between the products sold and those offered as a bonus . The prohibition therefore applied to the award of a bonus consisting of a disposable camera with a film, for the purchase of three films , or the offer of spectacles without corrective lenses for any purchase of spectacles with corrective lenses, as long as the pair offered, devoid of any visual quality, did not have same use or utility as the purchased pair .

 Law No 51-356 of 20 March 1951 only referred to goods and services.

Cass. com., 24 October 2000, LawLex200200000721JBJ, upholding CA Rennes, 24 June 1998, LawLex200200001106JBJ, rejecting the qualification of sale with a bonus for an offer of four months of free heating and saving of more than 40% on the connection price, i.e. the total sum of FF 1,500 (EUR 230), to any customer making the commitment to install a gas boiler to replace a fuel oil or propane boiler.

 CA Chambéry, 15 January 2009, LawLex201200001152JBJ.

 This law lowers the threshold for selling at a loss by allowing distributors to include in the purchase price all the financial benefits arising from the commercial negotiation, commonly referred to as "back margins".

 CA Lyon, 17 December 1999, LawLex200300003047JBJ.

 T. com. Nanterre, 6 February 2004, LawLex200400002155JBJ: the offer of free communication time on the occasion of a new subscription is lawful, since it is analyzed as a self-paying bonus for a service identical to that of the main contract.

 CA Agen, 18 May 2009, LawLex201100001001JBJ: lack of identicality of nature between the thing sold;- uncut flowers, vases, pots, fertilizers or various products - and the bonus offered - a bouquet of five roses.

 CA Douai, 15 October 1998, LawLex200300002391JBJ: the offer of a "man's" watch for any purchase of a "lady's" watch of the same model constitutes a sale with an unlawful bonus given the lack of identicality of the two products.

 T. com. of Nanterre, 6 March 1991, LawLex200300001842JBJ: the offer of a free oil change for every change of exhaust pipe constitutes an unlawful bonus because it is not complementary to the main service.

 CA Rennes, 6 October 1989, BID 1990, No 9, 33, bonus consisting in the award of a 36 cm television for the purchase of a color television.

 CA Nancy, 15 October 1996, LawLex200300001758JBJ: the court holding that even if these products have the same function - photo media, they are of a different nature, the disposable one having the additional characteristic of allowing photos to be taken, independently of any accessory.

Article L. 121-19 (former Article L. 121-35) prohibits sales or offers for sale giving entitlement “immediately or in the future” to a bonus. The bonus must therefore have a certain character and its award cannot be subject to a hazard. However, case law does not strictly apply this requirement. The court thus found that the offense of sales with bonuses was constituted against the head of a mail-order company having offered an 850-euro watch to the first hundred buyers of a set of cookware . Similarly, the contest encouraging the purchase of large quantities of products to increase the chances of winning purchase vouchers was deemed unlawful . While the solution may seem open to criticism under the provisions of Article L. 121-19 which excludes any random award of the bonus, it nevertheless corresponds to the will of the legislator to promote, with the prohibition of sales with bonuses, competition based on quality or prices and to prevent consumers from making unnecessary and unreasonable purchases solely for the purpose of obtaining a bonus.

As the prohibition of sales with a bonus covers immediate or future deliveries, Article L. 121-19 concerns both direct bonuses and deferred bonuses. The direct bonus is acquired at the time of the purchase, and is mainly aimed at “winning” customers. On the contrary, the purpose of the deferred bonus  is to gain customer loyalty, insofar as it is granted only after a certain number of purchases of goods or services from the same seller or supplier.

 Cass. crim., 5 April 1995, LawLex200300001705JBJ; CA Paris, 10 March 1994, LawLex200300001654JBJ.

 TGI Pontoise, 6 July 1994, LawLex200300001850JBJ: in this case, customers of a supermarket were invited by a competition to total the greatest number of receipts over a given period proving the purchase of goods bearing the distributor's label. The three winners - those with the most receipts - were then offered vouchers for the products of their choice. The court condemned this promotional practice, noting that these vouchers could not be regarded as small items within the meaning of the former Article L. 121-35, paragraph 2, insofar as their unit value was greater than 60 Euros (formerly 350 francs) as specified in Article R. 121-8 then in force and repealed by Decree No 2014-1061 of 17 September 2014.

 In principle, deferred bonuses are exempt from the prohibition of Article L. 121-19 when they consist of cash discounts or rebates.

Certain character

The prohibition of sales with a bonus assumes that it is free. Article L. 121-19 (former Article L. 121-35) of the Consumer Code condemns the provision “free of charge” of another product, good or service. The bonus must therefore be offered with no increase in the usual price of the product or service.

It follows that a bonus offered for a consideration does not fall within the scope of Article L. 121-19. The practice of the self-paying bonus thus escapes the criminal sanction. This promotion technique, which allows the buyer of a product to acquire another good or another service at a favorable price, is analyzed, regardless of how it is classified by the parties, as a contract of sale, whether or not the sale is consecutive to the conclusion of another contract . The self-paying bonus may take the form of a discount voucher, regardless of its denomination: discount voucher, purchase voucher, coupon, discount check, etc.

The cross-couponing technique also avoids the prohibition of sale with bonuses due to fact that it is performed against payment. In this case, the buyer of a product receives a discount voucher for the purchase of a different product, the purchase of each product automatically giving entitlement to a reduction on the other . The same applies to price reductions or cash rebates, subject to a certain number of proofs of purchase by the customer. The fidelity card system also does not fall under the prohibition of sales with a bonus, to the extent that the customer contributes financially to the purchase of the bonus through coupons or stamps to be affixed to a card or points collected. Is it the same when the “fidelity points” accumulated by the customer give entitlement either to reduction vouchers on a later purchase to be made in the store, or to the delivery of products or services selected from a list or catalog? In the first case, a new act of purchase is necessary: it is a lawful self-paying bonus . In the second, the products or services are provided, on the basis of a list or a catalog, free of charge. They constitute a bonus which will fall under the prohibition of sales with a bonus if the practice is deemed unfair .

 Cass. 1re civ., 29 January 2002, LawLex200500005753JBJ: the operation consisting in the purchase of fuel and subsequent delivery of a book against payment of an additional sum of money characterizes two separate sales, and not a sale with a bonus.

 Couponing is different from the self-paying bonus in that it does not oblige the purchaser to acquire the product at a reduced price at the time of purchase.

 The practice of the self-paying bonus may nonetheless fall under the qualification of tied sale under Article L. 121-11 (former Article L. 122-1) of the Consumer Code if the customer does not have the possibility to purchase each article separately. It can also be convicted on the basis of the prohibition on resale at a loss referred to in Article L. 442-2 of the Commercial Code: See Cass. crim., 7 May 2002, LawLex200200000021JBJ.

 For an example prior to the Hamon Law, CA Paris, 3 March 1992, LawLex200300001725JBJ: in this case, customers holding a store card received "fidelity gift vouchers" that they could use as a reduction voucher for the purchase of another article in the store or to obtain one or more prizes to be chosen from a list of 18 items.

 Free bonus

Until the Hamon Law of 17 March 2014, former Article L. 121-35 of the Consumer Code allowed sales with a bonus when the bonus consisted of “small objects or services of low value” or of samples. Small objects had to be marked in an apparent and indelible manner with the name, brand name, sign or logo of the person concerned by the advertising operation  and samples had to be marked “free sample - not for sale” legibly, indelibly and visibly on the presentation . Article R. 121-8 of the Consumer Code [now repealed]  determined a maximum value for the bonus, calculated on the basis of the net selling price, including all taxes, of the product or service sold or offered for sale . It was fixed at 7% of the selling price, including tax, when it was less than or equal to EUR 80 . If this selling price was more than EUR 80, the maximum value of the bonus was limited to EUR 5, plus 1% of the net price. In any event, the value of the bonus should never exceed EUR 60. Thus, when a product offered free of charge could not be considered, because of its market value, either as a sample or as an advertising medium, the trader who offered it to any person who so requested was guilty of the offense of sale with a bonus, when the delivery of the product was subject to a sale .

The value of the bonus depends not only on the intrinsic cost of the object or service offered as a bonus, i.e. its acquisition cost. It also takes extrinsic costs into account. As a general rule, it must be calculated based on all that is necessary for the use of the object as a bonus . The evaluation of the bonus must include all operations necessary for the creation of the promotional offer, which includes assembly operations, any subcontracting costs, the consumer information leaflet imposed by the regulations and modifications made to the usual packaging, as well as the intellectual property rights held on the image of the objects offered as a bonus . Indeed, all costs necessary to the offer of the object or service to the consumer which would not be incurred if this offer was not granted should be included in the value of the bonus.

When the sale with bonus operation is implemented by a distributor, the question of its compliance with Article L. 442-5 of the Commercial Code, which prohibits a supplier from imposing resale prices on its distributors, may arise. The manufacturer or the advertiser, who, upstream, organizes a promotional sale throughout the national territory, does not always know the prices charged by each distributor. In addition, the distributor may apply a lower resale price and thereby challenge the validity of the promotional transaction because of the reduction in the basis of the bonus. According to the Court of Cassation, the text does not require the sale price to be calculated in relation to that of the bonus, but only that the value of the bonus is limited according to the sale price of the product concerned, including all taxes . This obligation is therefore not contrary to Article L. 442-5 of the Commercial Code. Like any company at the origin of the bonus, the producer must take all necessary measures to ensure that the resale price of the products complies with the cost of the bonus at the time of sale to retailers. The text retains the net selling price, i.e. the selling price, including VAT, to the consumer, and not the average resale price of the products that are the subject of the operation. Therefore, the maximum amount of the bonus must be calculated solely on the basis of the net selling price to distributors, and not the resale price to the public.

Although, after the intervention of the Hamon Law, the question of the value of the bonus within the meaning of Article L. 121-19 now seems relegated to the background, it nonetheless retains a certain interest, as a bonus of a significant value will be more likely “to materially distort the economic behavior of the reasonably well-informed and reasonably observant and circumspect consumer” than a bonus of a symbolic amount.

 Former Article R. 121-10 of the Consumer Code, repealed by Decree No 2014-1061 of 17 September 2014.

 Former Art. R. 121-10, para. 2, of the Consumer Code, repealed by Decree No 2014-1061 of 17 September 2014.

 The abolition of the exception relating to small items or services of low value or samples in the legislative part of the Consumer Code resulted in the repeal of Article R. 121-8 by Decree No 2014-1061 of 17 September 2014.

 The maximum amount includes all taxes, ex-production for objects produced in France, free of duty and cleared at the French border for imported objects. 

 T. com. Nanterre, 6 March 1991, LawLex200300001842JBJ: conviction of the offer of a free oil change for any replacement of an exhaust pipe or of its value being deducted from the price of another service on the grounds that the price of the oil change exceeded regulatory requirements. The judges noted that a standard oil change cost the company 44.20 francs, whereas the average billing value over a year for an exhaust pipe replacement amounted to 913.22 francs, including VAT. Under the regulations, the oil change offered could not be worth more than 36.13 francs, including VAT (30 francs plus 1% of 913.12); CA Paris, 5 June 1997, LawLex200300004037JBJ, holding that the delivery of a photographic album to tobacco users constitutes a breach of advertising regulations on tobacco but does not characterize a sale with an unlawful bonus, as the value of the gift is less than 7% of the price of the pack of cigarettes.

 CA Lyon, 17 December 1999, LawLex200300003047JBJ;Cass. com., 11 March 2003, LawLex200300001197JBJ.

 T. com. Lyon, 2 March 1999, LawLex200300001844JBJ; CA Lyon, 17 December 1999, LawLex200300003047JBJ; Cass. com.,  11 March  2003, LawLex200300001197JBJ: in this case, the bonus offered for the purchase of bottles of fruit syrup consisted of a Walt Disney figurine located under a special cap of the container. In addition to the cost of purchasing the figurine, the judges took into account the cost of fee paid to the holder of the operating rights, set at 5% of the turnover. They also rejected the qualification of bonus in the usual packaging of the product or element essential for its use within the meaning of Article R. 121-9 of the Consumer Code (now repealed).

Cass. com., March 21, 1995, LawLex200300001581JBJ dismissing the appeal against CA Versailles, 7 May 1993, LawLex200300001768JBJ.

French Consumer Law

221. Product, good or service

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221. Product, good or service

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