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

Pursuant to Article 1193 (former Article 1134) of the Civil Code, the fixed-term exclusive distribution contract must be performed until its term. Under the law in force prior to the reform brought by the Ordinance of 10 February 2016, only a breach by one of the parties could justify a judicial termination before term (former Article 1184 Civil Code). Thus, the supplier who terminates before term …

Unilateral termination before term.

Pursuant to Article 1193 (former Article 1134) of the Civil Code, the fixed-term exclusive distribution contract must be performed until its term. Under the law in force prior to the reform brought by the Ordinance of 10 February 2016, only a breach by one of the parties could justify a judicial termination before term (former Article 1184 Civil Code). Thus, the supplier who terminates before term a contract having converted to a fixed-term by reason of a novation incurs its liability .

However, in case of serious breach, the termination may, according to the Court of Cassation, be implemented unilaterally without the court's prior intervention, at the risks of the party initiating the termination . Thus, a distributor may terminate the contract before term where the supplier breaches the contractual good faith obligation by omitting to inform it of the existence of an infringement action concerning the contract goods . The trial courts must however ensure that the conduct penalized is sufficiently serious to justify unilateral termination. Article 1158(1) of the draft new Civil Code should provide that option.

The principle of unilateral early termination of fixed-term contracts has been strongly criticized by legal commentators. However, efficiency requires that critical and economically harmful situations be promptly denounced. The solution is retained by the laws of the major developed countries and by the Vienna Convention on the international sale of goods, the Unidroit principles of international trade and those of European law established by the Lando Commission. The reform of contract law has enshrined in the principles upheld by the Court of Cassation. New article 1226 of the Civil Code provides that “the creditor may, at his/her own risk, rescind the contract by way of notification”. However, the text provides that, “except in the event of urgency”, the defaulting debtor must be enjoined by formal notice “to fulfill its obligations within a reasonable period of time”. The fact that the termination is at the risks of the person who decides it and that the significant amount of damages that the author of the termination might have to pay in the event that the wrongful character of the contracting party's conduct has been wrongly assessed, are a sufficient guarantee against the risk of abuse. The seriousness of the breach must be very clearly established given the rigorous nature of the case law in decisions rendered on the basis of Article L. 442-1, II (former Article L. 442-6, I, 5°) of the Commercial Code, which requires a serious breach for a termination without notice to be valid.

Cass. com., 14 June 1994, LawLex200200005400JBJ, approving CA Paris, 17 June 1992, LawLex200200005933JBJ.

Cass. 1re civ., 13 October 1998, (medical cooperation contract); 20 February 2001 (expertise contract).

Cass. com., 23 September 2008, LawLex200800001818JBJ.

French Distribution Law

113. Unilateral termination before term.

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113. Unilateral termination before term.

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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au contenu exclusif Livv – juristes d’entreprise