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 guarantees the distributor against foreclosure in accordance with Article 1626 of the Civil Code. The Amiens Court of Appeal has thus held that the supplier commits a wrongdoing by supplying the distributor with products which may expose the latter to an action for infringement . By contrast, this guarantee cannot be relied upon by distributors selling a counterfeit product in full kn …

Foreclosure guarantee, latent defects and defective products.

An exclusive distribution agreement is a framework agreement which organizes sales contracts: the supplier is subject to the obligations of the law on sales. It is therefore bound by a duty to supply and under the conditions of the contract, must regularly supply the goods which are the subject matter of the exclusive distribution contract . The supplier must supply within the planned time-period  or at least within a reasonable period  and comply with the volumes agreed upon , even if he considers that due to the loss of a major customer, the distributor will not be able to sell them . The supplier may not refuse to fulfill the orders of his exclusive distributor without demonstrating that he is unable to do so .

Failure to do so requires that it compensate for the harm resulting from the loss of margin and the dissatisfaction of the customers, if shown . Likewise, the supplier incurs the termination of the contract at its sole expense where it: ceases without notice to manufacture an item which constitutes one of the main subject matters of the contract  due to its inability to guarantee the quality thereof , conceals from its distributor that the contract goods were the object of an infringement action , is not capable of supplying substitution goods within a reasonable period  justifying the unilateral termination of the contract, or supplies goods affected by multiple disorders which are potentially dangerous for users .

However, if the distributor does not fulfill its obligations, the supplier may raise the plea of non-performance , strictly assessed by the courts. Thus, the non-compliance by the distributor with its payment duty due to the delays in deliveries by the supplier cannot justify resorting to that plea . Likewise, the termination of an exclusive distribution agreement is attributable to the supplier where it is based on its refusal to honor, under normal conditions, orders placed by the distributor due to the latter's non-participation in optional promotion activities . Lastly, where the supplier is unable to deliver the goods due to a dispute with his own manufacturer, the exclusive distributor does not breach his contractual obligations by buying supplies from a third party .

CA Versailles, 22 October 1998, LawLex200200005009JBJ.

CA Lyon, 2 November 2006, LawLex200800001904JBJ; see also CA Rennes, 18 December 2012, LawLex201300000012JBJ. 

CA Paris, 10 June 2009, LawLex200900003586JBJ.

CA Paris, 1 March 2000, LawLex200300003990JBJ; 3 March 2000, LawLex200200004773JBJ: the termination of an exclusive distribution contract is not attributable to the supplier where the non-performance of its supply duty is justified by the fact that the distributor has supplied neither order programs or bank guarantee, and has not paid its debts on due date; CA Versailles, 22 March 2016, LawLex201600000689JBJ; CA Paris, 3 April 2019, LawLex201900000488JBJ.

Cass. com., 23 October 2001, LawLex200200005008JBJ.

CA Paris, 6 December 2001, LawLex200200004637JBJ.

CA Paris, 17 April 2013, LawLex201300000766JBJ; Cf. T. com. Paris, 22 October 2014, LawLex201400001130JBJ ruling that late deliveries delays which concerned all the distributors and are due to a problem of conformity attributable to the manufacturer not the importer, are not the responsability of the latter.

CA Colmar, 17 April 2012, LawLex201200000908JBJ.

CA Reims, 8 September 2003, LawLex200700001330JBJ: a supplier must compensate for the loss suffered by its exclusive distributor where it does not comply with the supply volumes for which it has undertaken to prefer other outlets; CA Dijon, 13 April 2017, LawLex201700000712JBJ, upheld by Cass. com., 25 September 2019, LawLex201900001139JBJ, holding that that the supplier who is unable to manufacture and deliver nearly 12% of the goods ordered and paid for by the exclusive distributor incurs the termination of the contract.

CA Paris, 9 March 2016, LawLex201600000649JBJ.

CA Paris, 29 September 2021, LawLex202100005455JBJ.

Cass. com., 28 January 2004, LawLex200400000238JBJ.

Cf., where the discontinuation of the product in question was announced in advance to the distributor, CA Douai, 29 June 2023, LawLex202300008827JBJ.

CA Versailles, 7 December 2006, LawLex200800000857JBJ.

Cass. com.. 23 September 2008, LawLex200800001818JBJ.

Duty to supply.

The supplier guarantees the distributor against foreclosure in accordance with Article 1626 of the Civil Code. The Amiens Court of Appeal has thus held that the supplier commits a wrongdoing by supplying the distributor with products which may expose the latter to an action for infringement . By contrast, this guarantee cannot be relied upon by distributors selling a counterfeit product in full knowledge of the facts insofar as the harm suffered is attributable to them in that case . 

In its capacity as manufacturer, the supplier must also guarantee the distributor against any latent defects in the product. The purchaser of a good distributed by the exclusive network may take action against either the distributor or the supplier against whom it has direct recourse  governed by the contractual liability rules . The distributor's capacity as professional reseller does not exempt the supplier from its warranty duty . However, the distributor cannot decide on its own initiative to extend the warranty due by the supplier . Further, a contract can be terminated under the supplier's liability where he provides goods to his distributor which do not function and are unfit for sale, and where the supplier is unable to remedy the defects in question  even if credit notes have been issued to the distributor . The supplier who delivers defective high-end products to the distributor cannot reproach the latter for suspending all sales pending their reformulation . On the other hand, the supplier is not bound by warranty against latent defects when the defects found do not stem from a latent defect in the products supplied but from their assembly by the distributor together with other elements in order to install them on equipment for which they are not designed .

Since the transposition of the Directive of 25 July 1985 on liability for defective products , the Civil Code makes a distinction between warranty for latent defects and liability for defective products. The warranty for latent defects provided for in Article 1641 covers the defects of the sold good which make it improper for the use to which it is intended, or which reduce the use in such a way that the purchaser would not have purchased it or would have purchased it at a lower price. The action is intended to obtain compensation for the harm suffered by the product itself by reason of a defect affecting it. Defective product liability laid down in Article 1245 (former Article 1386-1) provides that the producer is liable for the harm caused by a defect of its good regardless of the nature of its relationship with the end-user. The object of the claim is to compensate for the harm resulting from the obstacle to the safety of a person or to a good other than the defective product. That notion, which has been widely interpreted by the courts, can sometimes serve as a substitute for the warranty against latent defects .

CA Amiens, 11 October 2012, LawLex201200002177JBJ.

Cass. 1re civ., 15 October 1996, LawLex201000000960JBJ.

Council Directive No 85/374/EEC of 25 July 1985 on the approximation of the laws, regulations and administrative provisions of the Member States concerning liability for defective products.

Cass. 1re civ., 1 July 2015, LawLex201500000871JBJ.

The sub-purchaser's action to compensate for the harm suffered due to the defective good is governed by the rules on contractual liability: Cass. 1re civ., 27 January 1993, LawLex200300003081JBJ.

Cass. com., 20 June 1995, LawLex200500003698JBJ. 

CA Paris, 14 November 2012, LawLex201200002324JBJ; CA Orléans, 22 November 2012, LawLex201200002394JBJ; CA Paris, 8 February 2017, LawLex201700000301JBJ.

CA Paris, 19 June 2019, LawLex201900000845JBJ.

CA Paris, 15 January 2020, LawLex202000000086JBJ.

CA Lyon, 27 September 2018, LawLex201800001439JBJ.

French Distribution Law

90. Foreclosure guarantee, latent defects and defective products.

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Les notions juridiques connexes

90. Foreclosure guarantee, latent defects and defective products.

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

Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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au contenu exclusif Livv – juristes d’entreprise