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

Where the notice granted is insufficient, the victim of the termination may bring an action demanding the pursuit of the relationship, subject to periodic penalty payment for non-compliance, or, as is more often the case, to compensation for the harm suffered. Traditionally, if the claimant was able to find a new supplier during the notice period, the trial courts would reduce the required notice  …

Sanction for insufficient notice.

Where the notice granted is insufficient, the victim of the termination may bring an action demanding the pursuit of the relationship, subject to periodic penalty payment for non-compliance, or, as is more often the case, to compensation for the harm suffered. Traditionally, if the claimant was able to find a new supplier during the notice period, the trial courts would reduce the required notice period or even conclude that no harm had been suffered . 

The Court of Cassation now considers that the appropriate notice period should be assessed having regard to the duration of the business relationship and the circumstances prevailing at the time of the notification of termination . The Court has thus held that account should not be taken of events subsequent to the termination such as the distributor switching to other business . It has also stated that “in the case of insufficient notice, the resulting harm is assessed with regard to the duration of notice judged to be necessary”. This means that the amount of the loss suffered is evaluated on the day of termination according to the notice that ought to have been granted, even if, due to the fact that the other party has been able to find new business in the meantime, it is not needed. This solution seems questionable. Notice of termination of a contract is intended to give the terminated party the opportunity to find new business; it is not an end in itself but rather a means to achieve that end. Now determining the length of the notice period without ensuring whether that objective has already been achieved lacks coherence. The courts will also sometimes award compensation for loss of profits that would have been made in the months for which notice has not been granted relative to the duration of the notice period as assessed on the day of the termination and without taking account of subsequent events.  Such a remedy amounts to awarding an automatic indemnity to a distributor having, as is frequently the case in practice, found a new supplier, for losses that he has not suffered. In such cases, this is no longer “compensation” granted on the basis of liability but a lump sum payment. Such a deviation is cause for concern and would appear unfounded having regard to Article L. 442-1, II (former Article L. 442-6, I, 5°) of the Commercial Code which clearly provides for a liability action based on the compensation of the harm suffered, not automatic compensation. The solution is in any case contrary to the principles of civil liability which require an assessment of the injury on the day of the court ruling and not on the day when the event that gave rise to the damage occurred.  Not only is it unjust but it also undermines the efficiency of distribution networks by leading to reduced flexibility in contractual relationships which are already subject to too many legal constraints. The Paris Court of Appeal maintained its opposition to this case law finding it appropriate to take into account the reorganization of the ousted partner when assessing the duration of the notice period . More recently however, it appears to have moved closer to the Court of Cassation's position in holding that account cannot be taken, to reduce the duration of the notice period, of invoices after the termination which show only that the distributor was able to receive supplies directly from the supplier, for modest amounts, when the order date is not specified , before falling completely into line by excluding the possibility to take account of any post-termination factors .  The Court has also held that the fact that the notice period granted by the supplier has allowed the distributor to redevelop its activity does not necessarily mean it is sufficient in light of Article L. 442-1, II of the Commercial Code .

Furthermore, the Court of Appeal in Paris has ruled against not only insufficient notice, but also a complete lack of notice. It pointed out that while a supplier is free to decide to stop distributing its products with its exclusive reseller in order to protect its partner and consequently terminate the commercial relationship, it cannot do so without notice unless it can identify and demonstrate a sufficiently serious breach of the company's obligations, but is liable on the basis of Article L.442-1,II of the Commercial Code .

See CA Versailles, 14 February 2012, LawLex201200000283JBJ; CA Rennes, 13 March 2012, LawLex201200000367JBJ; CA Nancy, 3 October 2012, LawLex201200002189JBJ.

Cass. com., 9 July 2013, LawLex201300001090JBJ, quashing CA Rennes, 13 March 2012, LawLex201200000367JBJ.

Cass. com., 6 November 2012, LawLex201200002304JBJ.  See also CA Paris, 12 November 2014, LawLex201400001315JBJ.

CA Paris, 28 January 2016 (2 judgments) and 29 January 2016, LawLex201600000225JBJ, LawLex201600000227JBJ and LawLex201600000284JBJ.

CA Paris, 7 February 2018, LawLex201800000276JBJ.

CA Paris, 15 March 2018, LawLex201800000515JBJ.

CA Paris, 4 July 2018, LawLex201800001042JBJ; 28 November 2018, LawLex201800001873JBJ.

CA Paris, 30 April 2025, LawLex202500003763JBJ.

French Distribution Law

140. Sanction for insufficient notice.

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

140. Sanction for insufficient notice.

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