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

To guarantee territorial exclusivity, the supplier must ensure the discipline of the network. It therefore has grounds to terminate an open-ended contract by reason of the distributor's breach of its duty not to exceed the territorial limits of distribution . The termination of the contract is however not the only action available. An arbitration procedure is often included in the exclusive distri …

Network discipline.

To guarantee territorial exclusivity, the supplier must ensure the discipline of the network. It therefore has grounds to terminate an open-ended contract by reason of the distributor's breach of its duty not to exceed the territorial limits of distribution . The termination of the contract is however not the only action available. An arbitration procedure is often included in the exclusive distribution contract for the settlement of disputes that are likely to arise between network members. An action in contractual liability is also an option .

Where the supplier does not meet its obligation, several remedies are possible for the distributor. First, it may seek the contractual liability of the supplier who has not complied with the obligation to guarantee the exclusivity of the network members and was the accomplice of the offending distributor. A supplier was thus ordered to pay the indemnity provided for in case of non-performance of the contract and also damages to compensate for the harm resulting from its fraudulent position . The victim could also sue the supplier on the basis of a provision for the benefit of a third party ("stipulation pour autrui"): by granting territorial exclusivity to the distributor, the latter was committing itself to the network distributors; but this reasoning seems debatable. Lastly, a distributor who is the victim of active sales still has available an action for contractual liability based on Article 1231-1 (formerly Article 1147) of the Civil Code. In effect, the supplier can be held liable for the unfair conduct of some of its distributors vis-à-vis one of them . A supplier who refrains from acting against a reseller who is not a member of the network when it has been informed about sales by that reseller on the granted territory  or has already been sanctioned for such inaction , or who does not act promptly  may find its liability incurred. In effect such inaction can be likened to a breach of contractual good faith .

The obligation to ensure network discipline cannot however result in the obligation to guarantee to the distributor absolute territorial protection  nor constitute an obligation to obtain a particular result. According to the Paris Court of Appeal, even in the absence of any contractual stipulation, such an obligation is an obligation to employ adequate means, which requires the supplier to act dilligently and promptly . Thus, a supplier does not fail to perform its duty to guarantee the exclusivity granted to the entering distributor where it is established that it caused the use of its brand by the former distributor to cease as soon as it was aware of it and that it cannot prevent that former distributor from obtaining the contract goods outside the granted territory from other distributors . Furthermore, a grantor cannot be blamed for failing to comply with its exclusivity obligation where it is not established that it is at the origin of the grey market whose existence has been denounced by its distributor and, on the contrary, it establishes that it has taken all measures in its power to remedy the breaches to its network imperviousness . Similarly, the Paris Court of Appeal has held that a supplier which allows one of its commercial agents to operate an online sales site does not infringe the exclusivity granted to its distributor where the site is not aimed at customers within the distributor's area and, having been made aware of the existence of problematic terms on the site, the supplier has requested that the agent remove them and the latter has done so . Going further, the Court of Cassation considers that online sales made by other members of the network to customers located in the territory of the French distributor do not constitute a breach of exclusivity by the supplier, since they are lawful under Regulation No 330/2010 . However, the supplier may not hide behind the European rules to justify its failure to meet the obligation to guarantee  territorial exclusivity granted to a distributor .

Nevertheless the court adopts a flexible and reasonable approach in order to assess the supplier's conduct. Thus, the supplier cannot be blamed for having failed in its duty to ensure compliance with network discipline where the motor vehicles sold on the territory of one of its distributors are second-hand goods and that it is not established that it was aware of the other alleged acts . Nor can a supplier be held liable for sales made in the territory of one of its exclusive distributors through a website that has sourced its supplies from a foreign reseller .

TGI Paris, 13 October 1993, LawLex200200004792JBJ.

CA Paris, 20 April 2000, LawLex200200004774JBJ.

CA Colmar, 10 March 1998, LawLex200200005014JBJ.

CA Paris, 17 December 2009, LawLex201000000243JBJ.

CA Paris, 12 February 2020, LawLex202000000222JBJ.

Cass. com., 18 November 2020, LawLex202000003254JBJ.

CA Paris, 17 October 2014, LawLex201400001099JBJ.

T. com. Versailles, 30 June 2004, LawLex200400001652JBJ; T. com. Paris, 24 November 2003, LawLex200400002166JBJ.

CA Paris, 30 August 2019, LawLex201900001002JBJ.

Cass. com., 2 October 1973, LawLex201000000471JBJ.

CA Agen, 9 May 1994, LawLex200200005393JBJ, upheld by Cass. com., 9 July 1996, LawLex200200005593JBJ: a grantor incurs liability vis-à-vis one of its dealers who is the victim of unfair competition where it does not perform its obligation to ensure discipline within the network; Cass. com., 22 October 2013, LawLex201300001545JBJ.

Cass. com., 20 February 2007, LawLex200700000345JBJ; See also CA Paris, 1 February 2002, LawLex200200000555JBJ; CA Bourges, 17 June 2002, LawLex200300000748JBJ, approved by Cass. com., 3 November 2004, LawLex200400002746JBJ. CA Aix-en-Provence, 4 February 2011, LawLex201100000261JBJ; CA Paris, 9 September 2015, LawLex201500001094JBJ; 13 March 2019, LawLex201900000343JBJ.

CA Bordeaux, 7 December 2010, LawLex201000001370JBJ.

CA Paris, 9 September 2015, LawLex201500001094JBJ, upheld by Cass. com., 8 June 2017, LawLex201700001042JBJ: conviction which was limited given the limited harm as demonstrated by the dealer, insofar as the supplier had waited six months after receiving the chassis numbers of vehicles sold outside the network to terminate the offending dealer and granted the dealer 6 months' notice.

CA Lyon, 12 November 2019, LawLex201900001386JBJ,

CA Paris, 29 June 1993, LawLex200200002620JBJ; 29 November 2017, LawLex201700002029JBJ, holding that a distributor may not attack its supplier for inaction in the face of parallel imports of contract products insofar as they are lawful and as the distributor does not establish that its territory has been affected by such sales.

CA Paris, 28 March 2017, LawLex201700000685JBJ.

French Distribution Law

82. Network discipline.

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

Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

82. Network discipline.

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