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

No right to the maintaining of the contractual situation is attached to the indefinite-term contract. Such contracts must be able to be terminated at any time due to the principle of prohibition of obligations in perpetuity. This freedom of the right to terminate was entrenched by the Conseil constitutionnel which ruled that “the freedom stemming from Article 4 of the Declaration of Human and Civi …

Obligation to comply with notice period.

No right to the maintaining of the contractual situation is attached to the indefinite-term contract. Such contracts must be able to be terminated at any time due to the principle of prohibition of obligations in perpetuity. This freedom of the right to terminate was entrenched by the Conseil constitutionnel which ruled that “the freedom stemming from Article 4 of the Declaration of Human and Civic Rights of 1789 justifies the possibility for either contracting party to unilaterally terminate a private law indefinite-term contract” . The distribution contract has a necessarily precarious character where it is provided for an indefinite term. Each of the parties may terminate it at any time, provided they comply with the reasonable time-period and do not commit any abuse of right . There is no duty to state the reasons for a decision to terminate . The courts therefore apply general principles of law to exclusive distribution contracts.

Only a serious breach by one of the parties may exempt the other from the duty to comply with a notice period . This is the case for aggressive conduct by the supplier , the absence of financial guarantees of the purchaser as part of a judicial reorganization , acts of unfair competition , refusal to comply with the contractual payment terms despite calls to order , payment delays and insufficient canvassing of customers . When assessing whether the failure of a party to fulfill their obligations is sufficiently serious, the trial courts may take account of facts occurring even after the filing of the document instituting proceedings and up to the day the judgment is handed down .

Article L. 442-1, II of the Commercial Code, which provides for the liability of the perpetrator of a sudden termination of an established commercial relationship without written notice period taking account of the duration of the commercial relationship, also applies to the parties to a distribution contract. Case law rendered under that provision shows the increasing, and therefore challengeable, review of contracts by the courts. Courts now assess whether the freely determined notice period is reasonable  and do not hesitate to challenge the principle of freedom of the parties not to renew a fixed-term contract . However, the provision retains the breach of contract scenario, which allows one of the partners to terminate the relationship without giving any notice period to the partner in breach : case law now subjects the enforcement of a resolutory clause agreed between the parties to the requirement that the fault or non-performance triggering the clause constitutes a serious breach of contractual obligations .

Cons. const., 9 November 1999, No 99-419 DC.

CA Versailles, 14 December 1995, LawLex200200005516JBJ: the termination without notice of an indefinite-term distribution contract is abusive by reason of its sudden character; Cass. com., 20 January 1998, LawLex200200005089JBJ; 7 October 1997, LawLex200200005053JBJ.

CA Lyon, 10 April 2003, LawLex200300002497JBJ; CA Versailles, 20 February 2003, LawLex200600001172JBJ, upheld by Cass. com., 31 January 2006, LawLex200600000620JBJ; CA Paris, 16 October 2008, LawLex200800001896JBJ.

CA Versailles, 14 October 2004, LawLex200500003779JBJ; CA Paris, 29 November 2007, LawLex200800002226JBJ. Contra, See CA Paris, 29 May 2008, LawLex200800002248JBJ: the renewal of a fixed-term distribution contract twice, which expressly excludes any tacit renewal does not allow the dealer to rely on the existence of an established commercial relationship within the meaning of Article L. 442-1, II of the Commercial Code by reason of hazard existing at the expiry of each contract.

CA Paris, 1 July 2009, LawLex200900003591JBJ; CA Versailles, 20 February 2003, LawLex200600001172JBJ, upheld by Cass. com., 31 January 2006, LawLex200600000620JBJ.

Cass. com., 9 July 2013, LawLex201300001101JBJ.

CA Paris, 12 May 1995; Cass. com., 7 October 1997, LawLex200200005053JBJ; 6 June 2001, LawLex200200004370JBJ; 6 May 2002, LawLex200200004621JBJ; 1 July 2003, LawLex200300002868JBJ.

Cass. com., 14 April 1992, LawLex200200005909JBJ; 6 July 1999, LawLex200200005232JBJ; 20 May 2003, LawLex200300002282JBJ.

Cass. com., 5 March 1996, LawLex200200005546JBJ: the supplier's aggressive conduct justifies the immediate termination of the contract, despite the provision of a three-month notice period.

CA Versailles, 23 March 2000, LawLex200200005005JBJ.

CA Lyon, 6 February 2003, LawLex200300004121JBJ.

Cass. com., 20 May 2003, LawLex200300002282JBJ. 

Cass. com., 3 November 2004, LawLex200400002748JBJ.

Cass. com., 2 February 2016, LawLex201600000641JBJ.

French Distribution Law

120. Obligation to comply with notice period.

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Les décisions de justice citées dans ce paragraphe :

120. Obligation to comply with notice period.

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

Les décisions de justice citées dans ce paragraphe :

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