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

Any selective distribution network relies on a series of contracts necessary to its organization and entered into by the manufacturer with its distributors. The manufacturer undertakes to supply each distributor while the distributor may undertake, inter alia, not to sell the contract goods in any place other than from the agreed location or to avoid selling them to parallel distributors or to res …

Standard form contracts.

Any selective distribution network relies on a series of contracts necessary to its organization and entered into by the manufacturer with its distributors. The manufacturer undertakes to supply each distributor while the distributor may undertake, inter alia, not to sell the contract goods in any place other than from the agreed location or to avoid selling them to parallel distributors or to reserve those goods a space guaranteeing their trademark image.

The setting-up and organization of the network imply a concordance of wills, the conditions of which are however rarely negotiated by the parties. Selective distribution contracts are standard-form contracts . This qualification derives less from the different economic power between a manufacturer and its distributors than from the very nature of selective distribution. Manufacturers select distributors from qualitative and, where appropriate quantitative criteria that they have previously defined. The obligation for a non-discriminatory application of those qualitative criteria could not be observed without the existence of a standard contract in order to harmonize the contract relations between the manufacturer and each of its resellers. The use of standard contracts cannot therefore constitute per se an obstacle to competition . This case law, which is favorable to parties who are members of a network and have signed a standard-form contract, does not however protect them from being sued if they implement clauses contained in the contract which prove to be unlawful, notably on the basis of  Article L. 442-1, I, 2° of the Commercial Code.

Selective distribution contracts fall within the general law on commercial contracts. They are therefore not subject to any specific rules as to form, except the requirement to provide pre-contractual information where the selection is exceptionally associated with a territorial exclusivity arrangement  or an exclusive or quasi-exclusive purchase obligation . The Competition Commission (Commission de la concurrence) however imposed the drafting of a written document in order to control the uniform application of the selection criteria . This requirement was justified by the fact that it described distribution contracts as commercial cooperation agreements in that case. Subsequently, the Court of Cassation also requested that a selective distribution contract be in writing. Once again, the circumstances were specific to the case as a written document was indispensable to justify a possible refusal to sell by the existence of a selective distribution network . Even if essential, there is no requirement that a selective distribution contract be in writing for it to be valid . The manufacturer's requirements are moreover often described only in its general sales terms. However, the existence of a written document is useful as evidence particularly to establish the non-discriminatory application of the selection criteria. A manufacturer who bears the burden of proof, and therefore the risk , must, in all disputes relating to the existence or validity of a selective distribution network, establish the existence of a standard contract entered into with all the selected distributors. The provisions of that contract are binding on everyone, including on the court, where the dispute is between the manufacturer and one of the selected distributors. By contrast, the contract cannot be enforced as a legal act against third parties in conflict with the supplier as the contract is not binding on them, but only as a legal fact in respect of such third parties. Lastly, standard-form contracts bind a supplier to a distributor only on the condition that they relate to significant points, such as the selection of goods to be promoted, territory, sales outlets etc .

See Competition Council decision No 02-D-36 of 14 June 2002, LawLex200200002181JBJ, which, by drawing the consequences of such a description, established a presumption of non-participation of authorized resellers to the preparation of the agreement, and thus exempted them from all liability in presence of unlawful clauses.

CA Paris, 25 October 1991, LawLex200200004424JBJ.

CA Paris, 23 September 2015, LawLex201500001152JBJ, Voiding the contract on the basis of Article L. 330-3 of the Commercial Code  because of the lack of clarity in the pre-contractual information document on the existence of other members of the network in the area.

CA Paris, 8 June 2016, LawLex201600001094JBJ, holding that the failure to achieve results mentioned in the estimates provided by the head of the network do not constitute deception insofar as the candidate had actively participated in its development and as former bank executive  bank, was able to assess the propriety of it. In this case, the court also rejected the complaint of mistake as to profitability, when it was not established came within the scope of the contract.

Competition Commission Decision, 27 May 1982.

Cass. com., 4 January 1985, LawLex201000000526JBJ: “the Court of Appeal, who found that Guerlain, on the one hand, submitted neither a standard contract, nor the contracts entered into with other distributors in force on the French territory at the time of the request expressed by Mrs. Vallerand and, on the other hand, did not claim the qualitative selection, and which noticed that this company did not bring evidence of the registration of Mrs. Vallerand in a waiting list, could deduce that the refusal given by Guerlain to Mrs. Vallerand was prohibited by the Order of 30 June 1945”.

Cf. CA Paris, 2 November 2016, LawLex201600001816JBJ, holding that a reseller does not establish the existence of an oral selective distribution agreement when it does not produce the selection criteria that would have permitted its approval and cannot show that it is bound by objectives relating to turnover, stocks, promotion or training, the rules defining the right of use of the trade mark, or an obligation to provide an activity report, which are characteristic of this type of contract.

CA Caen, 21 October 2004, LawLex200600002166JBJ, upheld by Cass. com., 3 October 2006, LawLex200600002104JBJ: an agreement in principle on secondary issues whereas the significant issues, such as the selection of products to be promoted, territory, sales outlets, remain to be determined, does not make it possible to form a selective distribution contract, all the more so since it falls within unsuccessful negotiations tending to the conclusion of an exclusive distribution contract.

French Distribution Law

228. Standard form contracts.

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

228. Standard form contracts.

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