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

Direct selling, which is an alternative to traditional distribution or marketing channels for companies, is characterized by the absence of an intermediary between the producer and the end consumer. This method of sale is very popular with the public because of the attractive prices the manufacturer can charge by eliminating the margins of successive wholesalers and resellers.

Law No 96-603 of 5 July 1996 on the development and promotion of commerce and trade (known as the Raffarin Law) repealed Article 39 of Law No 73-1193 of 27 December 1973 on the orientation of commerce and trade, known as the Royer Law , which subjected direct sales to consumers and the marketing of products downgraded due to defects to a specific system of authorization .

Since the amendment by the Hamon Law  of former Article L. 121-34 of the Consumer Code which provided that “direct sales to consumers and the marketing of products downgraded due to defects, practiced by manufacturers, are subject to a regulation fixed by decree” , direct sales now concern sales under the name “factory shop” or “factory depot”, regulated by Article L. 310-4 of the Commercial Code , as well as direct sales of goods to consumers in premises or in spaces not intended for sale to the public which fall under the regulations on sales on temporary premises.

 Article 39 of the Law of 27 December 1973 was codified in Article L. 121-43 of the Consumer Code, which provided that: “The rules relating to direct sales to consumers and to the marketing of declassified products are laid down by Article 39 of policy Law No 73-1193 of 27 December 1973 on trade and crafts reproduced below”.

 Article 1 of the Decree of 15 May 1974 considered as direct sales to consumers, retail sales of its products by any industrial undertaking, with the exception of “1° Sales in the stores of the undertaking when they are specially adapted for this purpose and open to the public according to local practices”; “2° Mail-order sales and home sales, when they constitute a permanent activity of the undertaking”; “3° Sales exclusively reserved for the staff of the undertaking”; “4° Sales made on behalf of the undertaking by traders ore commercial agents registered either in the commercial register, or in the special register of commercial agents”; “5° Sales made by companies registered in the trade register”. Direct sales were subject to administrative authorization from the mayor of the municipality where the sale took place, and it could not last for more than one month. This authorization was only granted exceptionally and once a year. The trader then had to justify a specific reason and provide an exact inventory of the products to be sold, indicating their overall value and the reasonable period of time for them to be sold. The violation of these provisions constituted a breach of the fifth category. The decision granting the authorization could be accompanied by conditions such as, for example, the prohibition to carry out advertising. The aim of the legislator was thus to protect retail trade and downtown stores from a sales process that is particularly attractive to the consumer, but which may be harmful to the retail trade.

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

 Article L. 121-34 is now devoted to telephone canvassing.

 Article L. 310-4 Commercial Code: “The name of factory store or depot can only be used by producers selling directly to the public the part of their production not sold in the distribution circuit or which is the subject of returns. These direct sales exclusively concern productions of the previous marketing season, thus justifying a sale at a reduced price.”

Concept of direct sales

Article L. 310-4 reserves the name of “factory store or outlet to producers directly selling to the public the part of their production not sold in the distribution circuit or which is the subject of returns”. The text cannot therefore apply to the distributor or intermediary who acquires ownership of the goods ultimately intended to be sold to the consumer . Direct sales only concern products from the previous season, which justifies a reduction in the price. The producer, who sells directly to the public, must keep at the disposal of the authorized DGCCRF agents any document justifying the origin or date of manufacture of the products subject to direct sales (Article R. 310-18 of the Consumer Code) .

The use of the description factory store or outlet in breach of the legal regulations is sanctioned by a fine of EUR 15,000 under Article L. 310-5, 5° of the Commercial Code. Under Article L. 310-6 of the same code, legal persons may be held criminally liable under the conditions laid down in Article 121-2 of the Criminal Code and are liable to a fine of EUR 75,000 as well as the display or dissemination of the decision handed down. An additional penalty of display or dissemination of the decision under the conditions laid down in Article 131-35 of the Criminal Code may also be handed down against them.

Like any system derogating from the general rule, that of direct sales is strictly applied by the judges, who refuse in particular any extension of the qualification of factory sale to the marketing by the producer of articles not from its own production, even if they come from a subsidiary . The provisions on selling at abusively low prices (Article L. 420-5 of the Consumer Code) or resale at a loss (Article L. 442-2 of the Consumer Code), do not apply to the sale in a store or factory depot when it is a direct sale of out of date or worn products.

 CA Reims, 7 September 2009, LawLex201500001386JBJ.

 The documents which justify the origin and date of manufacture of the products are invoices, accounting documents, order or delivery notes, product labels and catalogs, etc.

 CA Riom, 18 March 1998, LawLex200400000157JBJ, confirming the judgment which ordered the closure of a shoe manufacturer's factory shop for having sold articles of a brand not originating from the production of the site where the sale took place.

Use of the designation "factory outlet"

In addition to price reductions, producers and/or distributors try to attract consumers by offering them material benefits which are intended to promote the product in the eyes of the consumer who prefers to globally acquire the most advantageous product to purchase. The gift can be given at the time of purchase (for example, gift attached to the product, two magazines instead of one) or contained in the product packaging (such as figurines or magnets in products intended for children). The sale of a product can also be tied to that of another, by imposing either the purchase of an imposed minimum quantity, or the purchase in batches of the same product or different products, or the concomitant purchase of another product or service (for example a mandatory extension of the warranty). Finally, the gift may constitute the object of a game or a lottery, which will encourage the consumer to purchase in order to participate in the game or the lottery in order to obtain the announced gain.

These commercial practices are strictly regulated. Sales with a bonus are prohibited when it constitutes an unfair commercial practice within the meaning of Article L. 120-1 of the Consumer Code.  It is not forbidden to tie the sale of a product or the provision of a service with the concomitant purchase of another product or service, provided that the sale is not unfair. In principle, lotteries are prohibited. However, under certain conditions, advertising lotteries with a pre-draw and a post-draw are lawful, in particular those carried out by mail-order companies. In all these cases, the lawfulness of the promotional practice depends on its fairness.

Article L. 122-8 of the Consumer Code, resulting from the transposition of the Electronic Commerce Directive , stipulates that advertisements, and in particular promotional offers (rebates, bonuses or gifts, contests or promotional games) “sent by email, must be clearly and unequivocally identifiable upon their receipt by their recipient, or in case of technical impossibility, in the body of the message. These messages must indicate an email address or electronic means effectively enabling the recipient to send a request for such advertisements to cease”. In addition, “the conditions to which the possibility to benefit from promotional offers to participate in contests or promotional games are subject, when these offers, contests or games are proposed by electronic means, must be clearly stated and easily accessible” (Consumer Code, Article L. 122-9).

 Directive No 2000/31 of 8 June 2000, on certain legal aspects of the services of the information society, and in particular electronic commerce, in the internal market, OJEU L 178 of 17 July 2000, 1.

French Consumer Law

485. Concept of direct sales

486. Use of the designation "factory outlet"

487. Offer of a benefit to the consumer