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. 310-1 of the Commercial Code defines closing-down sales as “sales accompanied or preceded by advertising and announced as being aimed at, through price reductions, the accelerated disposal of all or part of the goods”.
1)  Price reduction
The main purpose of the closing-down sale is to dispose of all or part of the stock at a reduced price. The closing-down sale therefore implies a pric …

Price reduction and advertising

Article L. 310-1 of the Commercial Code defines closing-down sales as “sales accompanied or preceded by advertising and announced as being aimed at, through price reductions, the accelerated disposal of all or part of the goods”.

The main purpose of the closing-down sale is to dispose of all or part of the stock at a reduced price. The closing-down sale therefore implies a price reduction . The practice of a substantial reduction is sufficient to characterize as a closing-down sale a sales operation motivated by a cessation or change of activity. This is the case when a company announces only the closure of its establishment without specifying the existence of price reduction, but applies a double marking inside the store announcing the reduction in prices . The prohibition for any trader to resell a product at a price lower than its actual purchase price, provided for in Article L. 442-2 of the Commercial Code, “does not apply to voluntary sales motivated by the cessation or change of a commercial activity” (Commercial Code, Article L. 442-4, I, 1°): prices may therefore be below the resale at a loss threshold .

The advertising, which precedes and accompanies the closing-down sale, announces the price reduction, the disposal of the stock and the reason for the sale. The concept of advertising is understood in the broad sense. Thus, according to the Court of Cassation, sending a personalized invitation to 3,000 people to attend a closing-down sale characterizes advertising when this process has no purpose other than to “attract the public and inform a large number of persons of the closing-down sale” . The choice of medium is irrelevant to the classification of advertising: it can be prospectuses, radio spots, e-mailings, display on the store window, advertisements in the written press, etc. It is not necessary for the message to expressly use the term “closing-down sale” when the process or formula used suggest to the consumer that it is a closing-down operation. It is sufficient that a discount sale before closing  or before works  is announced. On the other hand, according to Article R. 310-7 of the Commercial Code, the advertising may only relate to products listed in the inventory provided in the annex to the prior declaration. It must also indicate the date of receipt of the declaration and the nature of the goods to which the operation relates if it does not concern all the products of the establishment (Article A. 310-6, Commercial Code).

The announcement of the closing-down sale is subject to the rules applicable to advertising.

In accordance with the Order of 11 March 2015, which repeals that of 31 December 2008 relating to price reduction announcements in respect of the consumer, “when a price reduction announcement is made in a commercial establishment, the labeling, marking or display of prices [...] must specify, in addition to the reduced price announced, the reference price which is determined by the advertiser and on the basis of which the price reduction is announced” (Article 2). The advertiser must also be able to justify the reality of the reference price on the basis of which the price reduction is announced (Article 4). Article 1 of the Order provides that “any price reduction announcement is lawful provided that it does not constitute an unfair commercial practice within the meaning of Article L. 120-1 (now Art. L. 121-1) of the Consumer Code and that it complies with the requirements of this order”. The announcement of inaccurate discounts in advertising accompanying a closing-down sale thus constitutes misleading advertising .

In general, advertising relating to closing-down sales must not be misleading within the meaning of Articles L. 121-2 and L. 121-3 (former Article L. 121-1) of the Consumer Code. In particular, advertising is likely to mislead customers when it creates confusion between the advertisement for items that are the subject of a simple promotional sale, and that for items that are the subject of the closing-down sale .

 Cass. com., 23 October 2012, LawLex201200002239JBJ.

 CA Paris, 16 October 2002, LawLex200300004579JBJ.

 CA Orléans, 27 March 2003, LawLex200400000818JBJ.

 Cass. com., 12 November 1991, LawLex201200002191JBJ.

 CA Colmar, 18 December 1998, LawLex200300001739JBJ.

 CA Paris, 28 October 1998, LawLex200300001738JBJ, for posters displayed on the storefronts suggesting to the consumer that the store wanted to get rid of the stock at a reduced price before future works.

 CA Paris, 8 September 1992, LawLex200300003670JBJ.

French Consumer Law

334. Price reduction and advertising

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334. Price reduction and advertising

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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