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

Although the only sanction provided for by Article R. 330-2 of the Commercial Code is a 5th category offense (contravention de 5e classe), it is settled case law that the supplier who fails to perform its pre-contract information duty incurs the nullity of the contract . In effect, the purpose of the required document is to allow the candidate to commit itself “in full knowledge of the facts”, so  …

Sanction.

Article L. 330-3 of the Commercial Code requires a supplier, who, in return for an undertaking of supply exclusivity or quasi-exclusivity, provides its name to a distributor, to give that distributor a document allowing it to commit to the contract in full knowledge of the facts. This provision was fully applicable to motor vehicle distribution until Regulation No 1400/2002 of 31 July 2002 imposed absolute multi-branding in order to qualify for block exemption . Since 1 June 2013, Article L. 330-3 is once again likely to apply, since Regulation No 330/2010 and its successor Regulation 2022/720 of 10 May 2022, authorize non-compete obligations in the context of single-branding under certain conditions, without calling into question the benefit of the block exemption. 

Pre-contract information is mandatory only in the context of the signing of a contract. Article L. 330-3 cannot be relied on by a distributor to attack its supplier for failure to disclose its reorganization plan where no new contract has been signed . Likewise, where a third party purchases shares in the dealer undertaking, the manufacturer is not required to provide it with the mandatory pre-contract information . On the other hand, the Court of Cassation considers that when a dealer sells its business, and with it, the commercial relationship, the supplier is required, insofar as the purchaser of the business has been authorized as a new dealer, to provide that new dealer with the information necessary to allow him to contract in full knowledge of the facts . The merger in the person of the manufacturer also will not trigger the Article L. 330-3 mechanism, where the new contract submitted to the dealer contains no major change in relation to the previous contract and the dealer, who is a member of the network, has knowledge of the elements necessary for its own information . By contrast, after some hesitation , the courts have recently held that Article L. 330-3 applies at the time of the renewal .

Regulation No 1400/2002 of 31 July 2002, OJEC L 203 of 1.8.2002, Article 5(1)(a).

CA Paris, 13 September 2002, LawLex200300001106JBJ.

CA Paris, 14 November 1997, LawLex200200005065JBJ.

Cass. com., 21 February 2012, No 11-13.653, LawLex201200000299JBJ.

CA Paris, 18 October 1996, LawLex200200005606JBJ upheld by Cass. com., 23 May 2000, LawLex200200005307JBJ; CA Paris, 23 October 2002, LawLex200500003782JBJ.

T. com. Nanterre, 10 February 2005, LawLex200500004285JBJ.

CA Versailles, 27 January 2000, LawLex200200005275JBJ.

Scope of application.

Article L. 330-3 of the Commercial Code requires the supplier to specify the age and experience of the undertaking, the state and prospects for development of the market concerned, the size of the network of operators, the terms and conditions of renewal, cancellation and assignment of the contract and the scope of the exclusive rights. Article R. 330-1 of the Commercial Code gives details on the content of the provision of information obligation. In addition to various terms relating to the supplier and the network, the document must, in particular, include a presentation of the general and local state of the market of goods or services which are the subject-matter of the contract and the prospects for development of that market. There is no obligation for the manufacturer to deliver a forecast of estimated profits and losses for the candidate to the dealership. Accordingly, a dealer cannot accuse the manufacturer who has in fact drawn up such forecasts which then prove to be too optimistic, of improper performance of its duty to provide pre-contract information . The only available recourse is an action for tort liability or to try to have the contract voided for deception, although, where applicable, its capacity as an experienced merchant might be an obstacle to the exercise of such action .

T. com. Paris, 30 September 1997, LawLex200200005048JBJ.

CA Rennes, 12 January 2000, LawLex200200004740JBJ.

Object.

The information must be notified “at least twenty days before the signature of the contract or, where applicable, before the payment of the sum” required, “prior to the signature of the contract”, “particularly to obtain the reservation of an area”. The date to be taken into consideration is not the effective date of the contract, but that of its signing . Evidence of the disclosure of the information may be brought by any means .

Cass. com., 17 July 2001, LawLex200200004365JBJ.

CA Rennes, 12 January 2000, LawLex200200004740JBJ, finding that evidence is brought by the fact that the documents signed by the dealer certify such disclosure. However, that interpretation was called into question by the Court of Cassation in relation to a franchise, Cass. com., 10 January 2018, LawLex201800000066JBJ.

Date of disclosure of the information.

Although the only sanction provided for by Article R. 330-2 of the Commercial Code is a 5th category offense (contravention de 5e classe), it is settled case law that the supplier who fails to perform its pre-contract information duty incurs the nullity of the contract . In effect, the purpose of the required document is to allow the candidate to commit itself “in full knowledge of the facts”, so that if such is not the case, its consent may be vitiated. However, nullity is not automatic: it can be ordered only if the dealer establishes that its consent is not genuine. This is not the case where it is established that on the day of the signing of the contract, it was already an experienced merchant and was assisted by a chartered accountant , or has an excellent knowledge of the local market since it has already represented several motor vehicle brands on the granted territory . The statute of limitations of actions brought on the basis of Article L. 330-3 of the Commercial Code starts when the distributor discovers that the information provided by the manufacturer is erroneous .

In addition, dealers may, according to the courts, bring a civil liability action against the manufacturer. In effect, non-performance of a legal obligation is a fault that the manufacturer must compensate for if it has caused harm. However, most of the time and as is the case for fraudulent conduct, these actions will turn on the dealer being a well-informed merchant or person capable of assessing the scope of the provided information . An action can also fail if the dealer is unable to show that the forecasts established by the manufacturer are impossible to achieve .

See, regarding franchise, Cass. com., 2 December 1997, LawLex200200005073JBJ; 19 October 1999, LawLex200200004387JBJ.

TGI Paris, 13 May 2004, LawLex200400001275JBJ, approved by CA Paris, 7 March 2007, LawLex200700000296JBJ.

CA Chambéry, 17 February 2004, LawLex200400000488JBJ.

Cass. com., 10 May 2000, LawLex200200005304JBJ; TGI Paris, 2 April 2001, LawLex200300000831JBJ; CA Chambéry, 15 October 2002, LawLex200400002108JBJ; 17 February 2004, LawLex200400000488JBJ.

TGI Metz, 26 October 2004, LawLex200400002599JBJ.

French Distribution Law

267. Sanction.

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Les décisions de justice citées dans ce paragraphe :

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267. Sanction.

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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