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 agreement has an indefinite term, block exemption was subject to the ordinary termination period of at least two years for both parties (Regulation No 1400/2002, Article 3(5)(b)) . Since 1 June 2013, ordinary termination has no longer been subject to a fixed notice period to benefit from the block exemption. The obligation to comply with a reasonable notice period is nevertheless still t …

Contractual or reasonable notice period.

Where the agreement has an indefinite term, block exemption was subject to the ordinary termination period of at least two years for both parties (Regulation No 1400/2002, Article 3(5)(b)) . Since 1 June 2013, ordinary termination has no longer been subject to a fixed notice period to benefit from the block exemption. The obligation to comply with a reasonable notice period is nevertheless still the rule. In effect, each party may terminate an indefinite-term contract at any time provided that it complies with a reasonable notice period and does not commit an abuse of right . Furthermore, the use of the two-year notice remains commonplace; on the one hand, a number of contracts concluded under Regulation No 1400-2002 are still in force, and on the other, the codes of practice of the ACEA  and JAMA  associations recommend a notice period of two years.

Compliance with the contractual notice period is in principle sufficient to validate the termination of the contract , unless the duration of the contractual notice period is less than the legal notice required by Article L. 442-1, II (former Article L. 442-6) of the Commercial Code. In general, this should not be the case, given the two-year notice period that remains the norm. Until the entry into force of Regulation No 1400/2002, it was accepted that compliance with the notice period exempted the manufacturer from any obligation to justify the termination  or at least made it irrelevant whether or not the reasons given were accurate . In particular, the dealer's good results were not sufficient to render unfair a termination notified in compliance with the contractual notice period . Compliance with the notice period also exempted the manufacturer from any liability by reason of investments incurred by the dealer shortly before the notification of the termination , provided that they were spontaneous investments by the dealer which could be re-used as part of another exploitation , and not investments required by the manufacturer and specific to the brand. If it had complied with the contractual notice period, the manufacturer could neither be blamed for having not kept its dealers informed of its reorganization projects  nor of having compromised the terminated dealer's chances of reconversion by placing it in an inferior negotiating position with a purchaser of its business, insofar as the purpose of the notice period is precisely to allow it to begin its reconversion . By contrast, the termination of a distribution contract by reason of the termination of the contract between the manufacturer and the importer does not constitute a force majeure event that justifies shortening the contractual notice period where the importer has obtained the continuation of the supplies under specific conditions . These solutions remain applicable post 1 June 2013 as the vertical restraints regulation does not provide for any obligation of a contractual nature.

What will happen when a distributor terminates the contract without complying with the contract notice period? According to the trial courts, the distributor who fails to comply with the notice period is not liable where the notice was given solely in the distributor's interest and the supplier was able to find a new distributor rapidly . More reasonably, other courts have accepted the existence of harm for the supplier, to which however they award compensation not according to the loss of gross margin but to the expected profit on sales where the measure occurs in the context of a recession . In other circumstances, the harm is compensated on the basis of the manufacturer's loss of margin on variable costs until the appointment of a new distributor or the normal term of the relationship .

The systematic non-application of the obligation of compliance with the notice period, which is disadvantageous for the supplier and favors the distributor, seems abnormal. It goes against the principle of the binding force of contracts which applies to both parties and seeks to minimize the disruption of the supplier's sales due to the distributor's failure to comply with the notice period when leaving the network. 

Where the agreement did not fall within the scope of European competition law, the parties could set a notice period of less than two years, see CA Aix-en-Provence, 26 October 2001, LawLex200300000568JBJ; CA Paris, 2 September 2010, LawLex201000000988JBJ.

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

T. com. Paris, 25 October 1999, LawLex200200005245JBJ; CA Paris, 4 June 2003, LawLex200300002288JBJ; 15 September 2004, LawLex200400002112JBJ. Contra, See T. com. Paris, 29 November 1999, LawLex200200005255JBJ.

Cass. com., 6 May 2002, LawLex200200004624JBJ. See also CA Paris, 4 June 2003, LawLex200300002288JBJ.

CA Paris, 5 February 2003, LawLex200300002863JBJ.

CA Chambéry, 8 April 2014, LawLex201400001871JBJ.

CA Grenoble, 22 February 2018, LawLex201800000358JBJ.

CA Paris, 12 September 2018, LawLex201800001295JBJ.

European Automobile Manufacturers Association.

Japanese Automobile Manufacturers Association.

T. com. Paris, 28 September 1989, LawLex200200005758JBJ; CA Paris, 22 October 1999, LawLex200200005244JBJ.

CA Paris, 11 December 1990, LawLex200200005815JBJ; TGI Paris, 27 November 2002, LawLex200300000640JBJ.

CA Paris, 26 January 2005, LawLex200500003766JBJ.

CA Paris, 1st June 2022, LawLex202200002842JBJ.

CA Paris, 19 May 1993, LawLex200200006004JBJ; 4 July 1996, LawLex200200005590JBJ.

CA Versailles, 15 May 1998, LawLex200200005128JBJ approved by Cass. com., 6 June 2001, LawLex200200004370JBJ; 2 July 1998, LawLex200200005137JBJ, approved by Cass. com., 22 May 2001, LawLex200200004906JBJ; CA Paris, 4 June 2003, LawLex200300002288JBJ; 19 June 2003, LawLex200400000778JBJ.

French Distribution Law

296. Contractual or reasonable notice period.

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296. Contractual or reasonable notice period.

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