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

Former Article 1131 of the Civil Code provided that the obligation without cause, or with a false cause or an unlawful cause could not have any effect. Although Ordinance 2016-131 of 10 February 2016 for the reform of the law of contracts has formally removed cause, it subsists in other forms so that the former solutions will not necessarily disappear. New Article 1128 of the Civil Code merges the …

Defined and lawful content.

Former Article 1131 of the Civil Code provided that the obligation without cause, or with a false cause or an unlawful cause could not have any effect. Although Ordinance 2016-131 of 10 February 2016 for the reform of the law of contracts has formally removed cause, it subsists in other forms so that the former solutions will not necessarily disappear. New Article 1128 of the Civil Code merges the old concepts of “cause” and “object” with the “content” of the contract, which must, under penalty of nullity, be defined and lawful ("certain et licite"). In addition, new Article 1169 provides for the invalidity of any contract for valuable consideration “when, at the time of its formation, the agreed consideration for the benefit of the contracting party is illusory or insignificant”. Finally, new Article 1170 states that “any contract term which deprives a debtor’s essential obligation of its substance is deemed unwritten”.

Franchise agreements are characterized by the availability of a distinctive sign used to win customers over, the disclosure of original know-how and the permanent provision of commercial assistance. It has been held that the lack of originality , sufficient testing  or consistency  of the know-how or the assignment of the network by the franchisor only two months after the conclusion of the contract, which results in the disappearance of the know-how , deprived the contract of cause. The same applies for the lack of reputation ,the non-existence  or the lack of protection of the brand , which constitutes one of the essential elements of the franchise agreement . Now such situations could fall under Article 1170. By contrast, the lack of administrative authorization necessary to develop the franchisor's activity would not be actionable where a true franchise network relying on a specific concept exists or where it does not deprive the payment of the entry fee of its purpose, which is offset by the training provided, the right to use the franchisor's distinctive marks and advertising services . The same applies to the franchisor’s lack of ownership of the trademarks, where he holds an operating license with sublicensing rights , or to his lack of experience in the field of the sale of businesses, when he can rely on proven know-how in the residential real estate sector, which is partially similar . The invoicing, by a third-party service provider, of an online ordering service does not lack consideration when this remuneration does not duplicate that paid under the franchise agreement for the use of the sign and assistance . Finally, an exclusive purchasing clause requiring the franchisee to procure only from the franchisor, where the latter’s prices may not be competitive, is not devoid of consideration, insofar as it is clearly stated that price is only one of several criteria for selecting suppliers .

The content of the franchise agreement must be lawful. Accordingly, a franchise contract that has as its cause the illegal practice of medicine must be annulled . The same applies to a contract that provides for the supply to the franchisee of spectrometers that do not comply with national regulations, in violation of mandatory rules, thereby placing the franchisee in a situation of illegality . The courts are somewhat flexible however: where the franchised business requires a professional qualification, it may be exercised by an employee holding that qualification . They have not resolutely interpreted French law in the light of European Union law in order to reject claims that the activity is unlawful .

Cass. com., 26 June 2007, LawLex200700001168JBJ: the entry fee received by a franchisor has no cause where the transmitted know-how cannot be distinguished from the rules of the bakery trade; Cass. com., 14 September 2010, December 2010, No 270,  overturning a Court of Appeal ruling for lack of transfer of know-how.

CA Poitiers, 9 July 2024, LawLex202400005385JBJ.

CA Montpellier, 30 April 2024, LawLex202400003533JBJ.

CA Paris, 12 November 2014, LawLex201400001322JBJ.

Cass. com., 1 June 2022, LawLex202200003005JBJ.

CA Caen, 26 November 2020, LawLex202000003450JBJ.

CA Orléans, 5 April, 1994, LawLex200200005386JBJ upheld by Cass. 1re civ., 11 June 1996, LawLex200200005574JBJ: the franchise contract having as its cause the illegal practice of medicine must be cancelled.

CA Rennes, 18 June 2024, LawLex202400004620JBJ.

CA Paris, 27 June 1996, LawLex200200005585JBJ upheld by Cass. com., 6 April 1999, LawLex200200004393JBJ.

CA Aix-en-Provence, 20 December 2018, LawLex201900002045JBJ and Cass. crim., 31 March 2020,  LawLex202000000410JBJ, regarding pulsed light hair removal; Cass. 1re civ., 19 May 2021, LawLex202100003028JBJ and LawLex202100003099JBJ; CA Aix-en-Provence, 24 November 2022, LawLex202200010664JBJ; CA Montpellier, 27 September 2022, LawLex202200007916JBJ; CA Aix-en-Provence, 28 September 2023, LawLex202300012031JBJ.

CA Paris, 12 September 2018, LawLex201800001331JBJ.

CA Paris, 25 March 2009, LawLex200900002614JBJ.

Cass. com., 6 May 2003, LawLex200300002256JBJ.

CA Paris, 12 September 2018, LawLex201800001331JBJ, cited above.

See inter alia Cass. com., 8 July 1997, LawLex200200005035JBJ: an eight-day technical assistance and the use of a business name are sufficient to characterize the existence of a franchise contract.

CA Reims, 8 November 2000, LawLex200300000703JBJ.

French Distribution Law

381. Defined and lawful content.

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Les décisions de justice citées dans ce paragraphe :

381. Defined and lawful content.

Demandez un accès gratuit au contenu exclusif Livv – juristes d’entreprise

Les décisions de justice citées dans ce paragraphe :

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au contenu exclusif Livv – juristes d’entreprise