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. 134-4 of the Commercial Code provides, “the relationships between commercial agents and principals shall be governed by an obligation of loyalty and a reciprocal duty of information”.
The obligation of loyalty is inherent in any activity of permanent representation carried out in the mutual interest of the parties. The obligation borne by the commercial agent is the necessary considerat …

Obligation of loyalty.

Article L. 134-4 of the Commercial Code provides, “the relationships between commercial agents and principals shall be governed by an obligation of loyalty and a reciprocal duty of information”.

The obligation of loyalty is inherent in any activity of permanent representation carried out in the mutual interest of the parties. The obligation borne by the commercial agent is the necessary consideration for the specific trust that the principal gives him in the relationships with customers, which he maintains in an autonomous and independent manner (hiring of sub-agents, handling commercial transactions on his own behalf, etc.), although he does not own the clientele. In any event, he must not harm his principal's interests .

Nothing precludes an agent from running a commercial undertaking as long as it is not in competition with the principal , or from using the corporate name of his principal as a domain name in accordance with the agreement between the parties, i.e. without any risk of confusion  or from publishing advertisements on behalf of his principal but appearing to come from an individual in order to have customers place orders . He may also receive commercial brochures, even orders, for competing products without violating his loyalty obligation where he has not made sales on behalf of third parties  or where the products of the same type but of a superior category do not target the same customers as his principal . More controversially, it has even been held that the fact that a commercial agent, during the term of the contract, establishes contacts with third parties with a view to his future activity and attempts to persuade other agents to follow him does not constitute a breach of the loyalty clause, which only refers to the poaching of employees and not of agents, or of the legal obligation of loyalty .

On the other hand, the commercial agent's obligation of loyalty precludes him, without the principal's consent, from contacting his principal's rivals , distributing  or representing competing products - including when he developed them himself  - or from canvassing customers on behalf of a competitor . Nor may he provide a competitor of the principal with information that enables the competitor to conclude a deal with one of the principal's customers  or divert a customer in order to offer the principal's goods for sale in his own name . He must also inform the principal if his partners become employees of a competing undertaking .

Compliance with the obligation of loyalty also requires the agent to refrain from discrediting his principal , by publicly challenging the principal's honesty and competence , by making libelous comments  or by informing customers of the bankruptcy proceedings concerning the principal . The agent's disloyal conduct is a serious fault and may justify the termination of the contract by the principal without notice or compensation for termination .

CA Paris, 18 June 1999, LawLex200200005226JBJ: a commercial agency contract must be terminated without compensation for serious misconduct of the agent where the latter receives hidden payments in violation of his obligation of loyalty and which harm the principal's interests. 

CA Paris, 20 January 1995, LawLex200200005437JBJ.

CA Bordeaux, 9 January 2017, LawLex201700000086JBJ.

Cass. com., 25 January 2005, LawLex200500004064JBJ.

CA Metz, 29 June 2023, LawLex202300008847JBJ.


CA Versailles, 14 September 2023, LawLex202300012459JBJ.

CA Rennes, 25 June 2013, LawLex201300001075JBJ.

Cass. com., 25 June 2002, LawLex200200004208JBJ.

CA Versailles, 19 May 1995, LawLex200200005468JBJ.

Cass. com., 17 March 1998, LawLex200200005108JBJ.

CA Paris, 12 March 2004, LawLex200400001519JBJ, confirmed by Cass. com., 8 November 2005, LawLex200500010088JBJ.

Cass. com., 20 February 2001, LawLex200200004892JBJ: the termination of the contract at the principal's initiative is attributable to the commercial agent where he has not been loyal and refuses to comply with the instructions of the one he represents; Cass. com., 16 October 2001, LawLex200200004883JBJ, upholding CA Bordeaux, 24 November 1998, LawLex200200004963JBJ; T. com. Béziers, 17 May 1999, LawLex200200005214JBJ.

TGI Bordeaux, 12 May 1999, LawLex200200004974JBJ.

TGI Grasse, 8 January 1998, LawLex200200004174JBJ, confirmed by CA Aix-en-Provence, 12 October 1999, LawLex200200004631JBJ and Cass. com., 3 April 2002, LawLex200200004633JBJ.

Cass. com., 14 November 2006, LawLex200600002439JBJ, quashing CA Bordeaux, 6 December 2004, LawLex200700000172JBJ.

CA Nîmes, 1 June 2006, LawLex200600002469JBJ.

CA Nîmes, 26 January 2024, LawLex202400000726JBJ.

CA Pau, 6 October 1999, LawLex200200004666JBJ: the exclusive commercial agent who conducts searches in the principal's archives and resorts to the principal's contractors for carrying out competing works, commits acts of unfair competition depriving him of the compensation for termination of his contract; CA Aix-en-Provence, 20 December 2002, LawLex200300003624JBJ: the search by a commercial agent of substitution activities and the fact that he contacts many persons for the development of an activity which is intended, in the future, to compete at least partly and indirectly with his principal, does not constitute serious misconduct but justifies a decrease in the amount of his termination compensation.

T. com. Béziers, 17 May 1999, LawLex200200005214JBJ: a commercial agent who fails to comply with his obligations of loyalty and information by distributing competing products without his principal's consent, commits a serious misconduct which justifies the termination of the contract without indemnity.

CA Paris, 7 February 2007, LawLex200700000447JBJ.

French Distribution Law

471. Obligation of loyalty.

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

471. Obligation of loyalty.

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

Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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