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

As with any commercial contract, automobile distribution contracts are, at the time of their formation, subject to the general principles of contract law. First, under the principle of contractual freedom, formally enshrined in Article 1102 of the Civil Code, each party is free to contract or not to contract, to choose their co-contractor, and to determine the content and form of the contract with …

Ordinary contract law

As with any commercial contract, automobile distribution contracts are, at the time of their formation, subject to the general principles of contract law. First, under the principle of contractual freedom, formally enshrined in Article 1102 of the Civil Code, each party is free to contract or not to contract, to choose their co-contractor, and to determine the content and form of the contract within the limits set by law, and in particular by mandatory public policy provisions. This principle, combined with the prohibition of perpetual commitments, notably precludes the recognition of a right to be accepted by a former member of a distribution network .

Next, Article 1104 lays down a rule of public policy: contracts must be negotiated, formed, and performed in good faith. According to the Court of Cassation, the obligation of contractual good faith does not require the head of a distribution network to define or organize a selection process for distributors based on defined and objectively established criteria, nor to apply such criteria in a non-discriminatory manner . Furthermore, a manufacturer’s alleged failure to act in good faith when entering into a new distribution agency agreement with a fixed and non-renewable term—when the previous agreement was for an indefinite period - cannot result in the annulment of the agreement unless it vitiated the agent’s consent, particularly where the agent was informed prior to signing of the change in duration, nor does it give the judge the freedom to modify the contested provisions . Finally, a party’s consent must not have been obtained through a defect in consent. Duress cannot be upheld against a car manufacturer where the agent claiming to be in a position of dependence was in fact free to diversify their activities in the absence of an exclusivity clause .

Moreover, according to Article 1113, a contract is formed by the meeting of an offer and an acceptance by which the parties manifest their intention to be bound. However, the manufacturer’s letter - sent after terminating the current contract with two years’ notice and inviting its distributor to enter into negotiations for the future conclusion of a fixed-term distribution contract, based on a draft contract marked “specimen” and subject to fulfillment of selection criteria at the end of the notice period - cannot be regarded as a firm offer to contract .

Cass. com., 16 February 2022, LawLex202200001052JBJ and LawLex202200001051JBJ.

Cass. com., 27 March 2019, LawLex201900000420JBJ, quashing on this point CA Paris, 24 May 2017, LawLex201700000919JBJ; see also Cass. com., 16 February 2022, LawLex202200001051JBJ, cited above.

Judicial Court, Paris, 17 September 2024, LawLex202400006694JBJ.

CA Paris, 13 March 2024, LawLex202400002410JBJ.

French Distribution Law

268. Ordinary contract law

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

268. Ordinary contract law

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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