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

Article L. 134-15 of the Commercial Code makes it possible to dispense with the status of commercial agent where the representation activity is exercised under a written contract concluded between the parties “which is principally for another purpose”. The concept of ancillary activity does not refer to the other autonomous activities of the agent but rather to activities that are ancillary to the completion of the transactions principally agreed upon with the principal. The commercial agent's activity is then no longer exercised on a permanent basis. By contrast, it is on occasion added to the usual activity of the agent, which is the main purpose of the contract. The power to waive the status of commercial agent finds its expression in the absence of one of the criteria which characterizes it. Ancillary activities conducted by the representative, which are closely linked to the mandate, are not sufficient to disqualify the contract even if they are similar to a distributor's duties .

Dispensing with the commercial agent status is strictly regulated by Article L. 134-15 of the Commercial Code. A written document must provide for the express waiver in favor of the law governing commercial agency ancillary to the main purpose of the contract concluded between the parties. Article L. 134-15(2) specifies that the dispensation is null and void “where the performance of the contract shows that the commercial agency activity is in fact carried out as the principal or decisive element” . A clause dispensing with the commercial agent status is lawful if the comparison between the turnover objectives provided for by the cooperation contract concluded between the parties and the fees received shows that the commercial agent activity is not carried out as the principal or decisive element .

Whether an activity is carried out “as the principal or decisive element” raises difficulties for motor vehicle agents since the service agency contract cannot validly exclude the status of commercial agent as far as the activity of sale of new motor vehicles in concerned unless that activity is ancillary .

CA Paris, 20 October 2004, LawLex200400003390JBJ and LawLex200400003391JBJ.

For an application, see CA  Rennes, 14 January 2020, LawLex202000000069JBJ.

Cass. com., 3 March 2004, LawLex200400000681JBJ, approving CA Caen, 10 January 2002, LawLex200400000690JBJ.

T. com. Nanterre, 1 June 2004, LawLex200400001651JBJ.

Ancillary agency activity.

Article L. 134-15 of the Commercial Code mainly concerns motor vehicle agents whose principal activity is to repair the manufacturer's motor vehicles and who may, as an ancillary matter, carry out sales . The sale of new motor vehicles has an ancillary character in terms of turnover volume with respect to the activities of maintenance, repair and sales of spare parts . In order to avoid disrupting the distribution of motor vehicles, the legislator has therefore made it possible to renounce this status and to exclude the possibility for providers of motor vehicle services to claim the protective commercial agent's status, particularly in order to be able to demand an indemnity on termination of the contract .

This waiver implies that the agency activity is merely ancillary to another activity carried out under a main contract concluded with the same manufacturer . The waiver may be declared null and void if the agency activity is “actually being carried out as the principal or decisive element”. The use of the word “decisive” implies an assessment of the activity which is not only quantitative but also qualitative.

It has sometimes been considered that a motor vehicle agent, whose principal activity is nonetheless repair and maintenance in terms of turnover, could rely on the protective status of the commercial agent where his activity of the sale of new motor vehicles was decisive for his principal activity . However, the “decisive” character of the agency activity does not only depend on the status as an agent of the manufacturer. The sale of motor vehicles of the brand is not necessarily decisive for the repair and maintenance activity. Some “service agency” networks do not sell new motor vehicles or sell a limited number of them, but are specialized in the repair and maintenance of motor vehicles . In each case, the court must therefore look at whether the ancillary activity is actually decisive for the principal activity. Where the activity of agent for the resale of motor vehicles is only carried out as an ancillary matter, the contractual clause that excludes the benefit of the commercial agent status is fully effective . Generally, the activity of representative in the sale of new motor vehicles is carried out only as an ancillary activity and not as a decisive element by virtually all motor vehicle agents. Most often, the activity of intermediaries in the sale only represents a small turnover in relation to the activity of maintenance, repair, sale of parts and second-hand vehicles carried out under the contract. Furthermore, where the motor vehicle agents repair motor vehicles of the brand of which they carry the sign, which is not specific to the sale of motor vehicles, they repair both motor vehicles that they have had a part in selling and vehicles sold by the whole network.

Along the same line: Ministerial Reply No 15793, OJ Sénat, Q, 19 September 1991, 2010.

Cass. com., 17 July 2005, LawLex200500007356JBJ: a motor vehicle service agent whose representation activity only generates 1% of his turnover cannot claim to be a commercial agent; CA Rennes, 28 November 2006, LawLex200600002462JBJ: a motor vehicle service agent cannot claim the status of commercial agent where the activity of the sale of new motor vehicles on behalf of the dealer, which only represent 0.62% of his turnover, has an ancillary character in relation to his repair activity.

CA Besançon, 5 January 2000, LawLex200400000251JBJ: an agency contract may validly exclude the right to goodwill compensation (indemnité de clientèle) at the end of the contract where the sale of new motor vehicles is only ancillary for the agent; T. com. Limoges, 25 June 2003, LawLex200300002860JBJ: a motor vehicle agent cannot benefit from the compensation for termination set forth in Article L. 134-12 of the Commercial Code where he carries out duties of representation only on an ancillary matter and his contract expressly excludes the status as a commercial agent.

CA Versailles, 16 October 2007, LawLex200700001583JBJ: the waiver to the commercial agent status of a motor vehicle agent is valid where it is established that the activity of sale of new motor vehicles only represent a very small proportion of his turnover, which mainly results from his activities of after sale service, sale of spare parts and second-hand motor vehicles.

Ministerial Reply No 15793, OJ, National Assembly, Q, 19 September 1991, 2010; See also CA Grenoble, 8 November 2001, LawLex200300003907JBJ: the motor vehicle agent must benefit from a termination compensation where it is established that the sale agency, unlike the contractual provisions, has a principal character given the turnover generated by the whole brand-related activity; CA Nîmes, 17 April 2003, LawLex200300004332JBJ: a services agent may claim the status of commercial agent where his principal activity is the sale of new motor vehicles and not the repair and sale of spare parts; Cass. com., 14 June 2005, LawLex200500006644JBJ: a motor vehicle agent benefits from the commercial agent's status where it is established that he has carried out his representative activity in an independent and permanent manner.

CA Rennes, 16 January 2007, LawLex200700000110JBJ: the status of commercial agent is not applicable to the motor vehicle service agent whose principal activity is the provision of after-sale services without the repaired motor vehicles necessarily being those he sells or those of the manufacturer's brand; confirming T. com. Rennes, 15 May 2005, LawLex200500005700JBJ.

CA Paris, 26 March 2002, LawLex200200004625JBJ.

French Distribution Law

465. Ancillary agency activity.

466. Motor vehicle agents.