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

Since the ordinary law on mandates did not prove protective (2), motor vehicle agents have tried to claim the benefit of the status as commercial agents (1).
1) Non-application of the status of commercial agent.
The main activity of the motor vehicle agent is most often to repair cars and not to represent the dealer for the sale of new motor vehicles. Very often, the agency contract expressly excl …

Agents.

Unlike the general law mandate, the common interest mandate cannot be freely revoked. It may be terminated only by mutual consent of the parties, or for legitimate cause, or in accordance with a contractual provision. An indemnity is further owed to the agent to compensate for investments that have become pointless due to the termination. The interest for a distributor bound by an indefinite-term concession contract in having its contract qualified as a common interest mandate is understandable. Article L. 330-3 of the Commercial Code  seems to be in favor of this type of claim by introducing into French law the concept of a contract entered into in the common interest of the parties. Most of the trial courts dismissed such actions  as they considered that motor vehicle concession contracts had no general interest character , and they underlined that this concept was specific to the mandate contract . The Court of Cassation has finally set aside any hope of new qualification by laying down the principle that the concession contract is not a common interest mandate and that a dealer cannot therefore be compensated for the unilateral termination of its contract . In effect, the dealer, unlike the agent, is an independent trader who purchases for resale and assumes all the legal and financial risks of the transaction. The termination of the concession contract is therefore not subject to any formality other than compliance with a reasonable notice period. Although some courts have considered that such a qualification does not prevent the dealer from requesting compensation specific to it for loss of customers and which represents the fruit of efforts made during the concession period , case law as a whole refuses all compensation .

Former Article 1 of the Law of 31 December 1989, referred to as the Doubin Law.

See, however, TGI Carpentras, 10 January 1997, LawLex200200005624JBJ.

CA Paris, 12 May 1995, LawLex200200005466JBJ.

CA Paris, 27 November 1996, LawLex200200002518JBJ.

Cass. com., 7 October 1997, LawLex200200005053JBJ; see also CA Paris, 1 March 2006, LawLex200600001064JBJ.

CA Paris, 5 October 2005, LawLex200600001175JBJ.

CA Paris, 14 December 2005, LawLex200600000549JBJ; T. com. Versailles, 9 June 2006, LawLex200600001373JBJ.

Dismissal of the qualification of common interest mandate.

Since the ordinary law on mandates did not prove protective (2), motor vehicle agents have tried to claim the benefit of the status as commercial agents (1).

1) Non-application of the status of commercial agent.

The main activity of the motor vehicle agent is most often to repair cars and not to represent the dealer for the sale of new motor vehicles. Very often, the agency contract expressly excludes the status as commercial agent, which is not automatically applicable to the motor vehicle agent . Article L. 134-15 of the Commercial Code authorizes such clauses : “When the activity of commercial agent is carried out under a written contract, signed by the parties, which is principally for another purpose, the parties may decide in writing that the provisions of this chapter do not apply to the part corresponding to the commercial agency activity […], this renunciation shall be invalid if the performance of the contract reveals that the commercial agency activity is actually being carried out as the principal or decisive element”. As a result, the ancillary activity of the sale of new motor vehicles by motor vehicle agents does not entitle them to benefit from the status , or to receive compensation in the event of termination . The ancillary character of the sales activity may be established from the review of accounting documents  or the turnover achieved by the agent for that activity , or result from the fact that the repaired vehicles are not necessarily those sold by the agent or do not necessarily bear the represented manufacturer's brand . Conversely, an agent may claim the status of commercial agents where, in view of the turnover achieved and despite the contractual provisions , its main activity consists in selling new motor vehicles and not repairing and selling spare parts .

As the status of commercial agent is not in most cases applicable to motor vehicle agents, claims for compensation fall within the ordinary law on mandates. However, termination clauses without compensation in favor of the principal having complied with the termination notice period are in this case perfectly valid .

Cass. com., 28 September 2004, LawLex200400002203JBJ.

CA Besançon, 5 January 2000, LawLex200400000251JBJ; CA Paris, 26 March 2002, LawLex200200004625JBJ; T. com. Nanterre, 1 June 2004, LawLex200400001651JBJ; T. com. Rennes, 10 May 2005, LawLex200500005700JBJ and LawLex200500005699JBJ.

CA Bordeaux, 15 January 1997, LawLex200200004814JBJ; CA Versailles, 8 January 1998, LawLex200200005086JBJ.

T. com. Limoges, 25 June 2003, LawLex200300002860JBJ approved by CA Limoges, 10 March 2004, LawLex200400000949JBJ.

CA Limoges, 10 March 2004, LawLex200400000949JBJ.

CA Aix-en-Provence, 14 January 2004, LawLex200400000252JBJ; Cass. com., 12 July 2005, LawLex200500007356JBJ: the sale activity represented only 1% of its turnover; CA Rennes, 28 November 2006, LawLex200600002462JBJ: activity representing only 0.62% of the turnover; CA Versailles, 16 October 2007, LawLex200700001583JBJ: sale activity representing only a very low proportion of the agent's turnover.

CA Versailles, 16 January 2007, LawLex200700000110JBJ.

CA Grenoble, 8 November 2001, LawLex200300003907JBJ.

CA Nîmes, 17 April 2003, LawLex200300004332JBJ.

CA Versailles, 30 March 2000, LawLex200300002991JBJ, approving T. com. Versailles, 21 June 1996, LawLex200300002992JBJ.

French Distribution Law

324. Agents.

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Les décisions de justice citées dans ce paragraphe :

324. Agents.

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Les décisions de justice citées dans ce paragraphe :

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au contenu exclusif Livv – juristes d’entreprise