This book provides a wide-ranging review of the European rules relating to distribution: exclusive purchase and exclusive supply, exclusive and selective distribution, motor vehicle distribution, franchises, commercial agents.

French Distribution Law

The supplier may unilaterally fix the prices of the contract goods where the use of that prerogative is non-abusive. The price of the goods is generally fixed by reference to the prices in the supplier's catalog or to the market price . There would appear to be nothing preventing a unilateral change in the price by the supplier during performance .
As a test for abuse, the Plenary Assembly based i …

Unilateral fixing of price.

The supplier may unilaterally fix the prices of the contract goods where the use of that prerogative is non-abusive. The price of the goods is generally fixed by reference to the prices in the supplier's catalog or to the market price . There would appear to be nothing preventing a unilateral change in the price by the supplier during performance .

As a test for abuse, the Plenary Assembly based itself, in the judgments of 1995, on Articles 1134 and 1135 (now Articles 1104 and 1194) of the Civil Code, which enabled it to use the good faith obligation. The assessment of the abuse may be carried out according to two criteria: objective or subjective. An objective analysis is similar to an economic approach of the distributor/supplier relation, whereas the subjective analysis only relates to the events of the contractual relation. These apparently contradictory approaches are in fact complementary.

Where the court is assessing the abuse, it compares the price charged by the supplier with the market price. In this mitigated version of “injury”, the price is held abusive where it significantly exceeds prices usually charged. To determine the average price, account must be taken of price fixing objective elements, such as product quality, reputation of the brand, supplier's assistance, significance of advertising campaigns etc. Thus, there is neither abuse in the fixing of the price, nor “potestativity” where that price is fixed by reference to the supplier's price list by taking account of the cost price of the goods . This competitive price approach presupposes that a reference market exists which relies on precise and verifiable economic data. However, where the gap between the market price and the price required by the distributor is an indication of abuse, it does not constitute the absolute evidence thereof . A supplier's misconduct must be at the origin of this imbalance. According to the Paris Court of Appeal, the price of the goods as set by the supplier can only reflect the existence of abuse if it is manifestly disproportionate such as to constitute a source of imbalance to the equilibrium of the contract .

From a subjective point of view, the abuse consists in a misconduct committed during the performance of the contract. It must be retained each time the supplier fixes the prices in its own interest to the detriment of the co-contracting party and in contradiction with the initial forecasts. The intention to cause harm is however not required . Accordingly, if the price is freely negotiated by the parties under the laws of supply and demand, there is no abuse in the absence of dominant position and arbitrary conduct from the supplier . The distributor cannot blame the supplier for an unfair price policy which prevents him/her from achieving a sufficient margin, where the supplier has granted 60% discount on the public price (exclusive of taxes) of items in its collection and offered to provide 2,000 free catalogues and to participate in its advertising and operating costs . Nor can he claim to be forced to accept all price changes decided by the supplier where the contract provides for the possibility to terminate subject to compliance with a notice period . By contrast, a supplier of medical products fails to uphold contractual good faith by removing all references on invoices to both the discount granted and the price to which it applies, retaining only a fixed net price, where certain prices are linked to a regulated tariff, insofar as this deprives distributors of any transparency regarding potential changes in the method of calculating prices and the discount rate .

The burden of proof of the abuse is on the distributor who claims to be a victim thereof . Although that proof may be brought by any means, an expert assessment is generally necessary insofar as the abuse relies on precise economic criteria.

CA Paris, 5 April 1996, LawLex200200005561JBJ; CA Orléans, 22 October 1996, LawLex200200005608JBJ; Cass. com., 26 January 1999, LawLex200200005175JBJ. 

Cass. com., 11 June 1996, LawLex200200005575JBJ.

Cass. com., 28 November 2000, LawLex200200004375JBJ: the abuse of right in the fixing of the price of goods supplied to the dealer must be established by the one who claims it.

Cass. com., 26 January 1999, LawLex200200005175JBJ. 

CA Paris, 27 June 1997, LawLex200200005029JBJ. 

CA Paris, 8 March 2017, LawLex201700000474JBJ.

Cass. com., 29 November 1994, No 91-21.009; CA Paris, 31 March 1995. 

Cass. com., 21 January 1997, LawLex200200005629JBJ. 

CA Paris, 21 June 2002, LawLex200400003317JBJ. 

CA Montpellier, 1 July 2014, LawLex201400002289JBJ

CA Grenoble, 14 January 2021, LawLex202100000777JBJ.

French Distribution Law

71. Unilateral fixing of price.

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

71. Unilateral fixing of price.

Demandez un accès gratuit au contenu exclusif Livv – juristes d’entreprise

Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise