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

The Hague Convention of 14 March 1978, which came into force on 1st May 1992, defines the law governing the contracts of intermediaries and representatives. Pursuant to Article 1, the convention applies to commercial agents whose relationships with their principals or third parties have an international character. 
In principle, the governing law is determined by the parties according to Article 5 …

Governing law: The Hague Convention of 14 March 1978 and Rome (I) Regulation.

The Hague Convention of 14 March 1978, which came into force on 1st May 1992, defines the law governing the contracts of intermediaries and representatives. Pursuant to Article 1, the convention applies to commercial agents whose relationships with their principals or third parties have an international character. 

In principle, the governing law is determined by the parties according to Article 5 of the Convention which provides that, “The internal law chosen by the principal and the agent shall govern the agency relationship between them”. The case law in France has thus concluded that French law therefore applies each time it has been expressly chosen by the commercial agent and his principal . On the other hand, the public policy nature attached to certain French provisions does not make them mandatory rules applicable in the international order capable of setting aside the application of a clause making the contract at issue subject to a foreign law . Thus, a French commercial agent cannot claim compensation pursuant to French law where the parties have chosen US law as the law governing the contract, as under the latter no compensation is awarded to the agent in the event of termination of his contract .

Within the EU, the choice of applicable law is governed by Regulation No 593/2008 of 17 June 2008, known as Rome (I), which replaced the Rome Convention of 19 June 1980 on the law applicable to contractual obligations . Article 3 of the regulation, like the Hague Convention, enshrines the parties' freedom of choice: “A contract shall be governed by the law chosen by the parties. The choice shall be made expressly or clearly demonstrated by the terms of the contract or the circumstances of the case. By their choice the parties can select the law applicable to the whole or to part only of the contract”. Article 21 expressly allows the provisions of the regulation to be disapplied in favor of any public policy provisions of the forum, and effect to be given to the public policy provisions of the country in which the obligations arising from the contract must be or have been performed insofar as those public policy provisions render performance of the contract illegal.

The Court of Justice has held that the provisions of Articles 17 and 18 of Directive No 86/653 of 18 December 1986 on the compensation of the commercial agent and which play a role in the protection of the principle of freedom of establishment and undistorted competition constitute mandatory rules which apply in the international order. These provisions therefore prevail over clauses purporting to subject the contract to the law of a non-member country . Clarifying the extent of the court's authority in the matter, the ECJ restated that the chosen court may disregard the law of a Member State, which meets the requirement for minimum protection laid down by Directive No 86/653 and which has been chosen by the parties to a commercial agency contract in favor of the law of the forum on the ground of the mandatory nature, in the legal order of that Member State, of the rules governing the position of self-employed commercial agents where it finds that, in the course of that transposition, the legislature of the State of the forum held it to be crucial, in the legal order concerned, to grant the commercial agent protection going beyond that provided for by the directive, taking account in that regard of the nature and of the objective of such mandatory provisions . 

The French courts remain divided on the matter. The Paris Court of Appeal does however seem to be moving towards accepting the mandatory provision qualification, at least in the European legal order. The Paris Court of Appeal has specified that the provisions of Article L. 134-12 of the Commercial Code, which transpose Directive No 86/653 into French law, constitute a public policy provision in the European legal order the application of which is expressly stipulated in Article 16 of the Hague Convention and Article 7 of the Rome Convention . On the other hand, in the international legal order, the Court of Cassation  followed in that regard by the Paris Court of Appeal , still frequently rules that the “the Law of 25 June 1991 codified in Articles L. 134-1 and following of the Commercial Code, protective status of internal public policy, [is] not a mandatory provision applicable within the national legal order”.

Where the parties have not specified the applicable law, Article 6(1) of The Hague Convention designates the law of the State where, at the time of formation of the contract, the agent has his business establishment or, if he has none, his habitual residence . This is also the case in the context of Regulaton No 593/2008, which provides in Article 4 for the application of “the law of the country where the service provider has his habitual residence” for contracts for the provision of services as is the case in an agency agreement or “the law of the country where the party required to effect the characteristic performance of the contract has his habitual residence” . 

Thus, where the contractual provisions are too vague to determine the applicable law, the agency contract concluded between a principal established in Germany and his agent for France, is governed by French law where the contract has the closest links with France. In effect, at the time of the signing of the contract, the agent was domiciled in France where the contract was to be performed with French customers .

However, where the intermediary carries out his activity mainly in the country where the principal has his business establishment, the law of that State is applicable . Lastly, where the principal or the agent has more than one business establishment, Article 6(3) of the Convention designates the law of the establishment with which the agency relationship is most closely connected.

CA Paris, 12 September 1997, LawLex200200004876JBJ: a French commercial agent cannot claim compensation as provided for under French law where, under the choice of law clause, his contract is governed by US law, which grants no compensation to the agent in case of termination of his contract; CA Colmar, 9 September 1998, LawLex200200005728JBJ: the parties to an international commercial agency contract may choose to subject their relationships to French law despite the fact that the commercial agent is not registered in France; Cass. 1re civ., 29 September 2021, LawLex202100005457JBJ, ruling that the choice of French law in relations between a French principal and its Algerian commercial agent can be inferred from the presence, in the contract concluded in France, of a clause attributing jurisdiction to a French court, the option for French law in the general terms and conditions of both the intermediary and the principal, the fact that France is the country of origin of the products, the country of payment of commissions and the country of validation of quotations, and the use of French currency in previous agreements between the parties; 20 March 2024, LawLex202400002547JBJ, holding that Articles L. 134-1 et seq. of the Commercial Code apply to an agency agreement even if the agent carries out its activity outside the EU, provided that the parties have made their relations subject to French law.

Cass. com., 28 November 2000, LawLex200200004875JBJ; CA Douai, 14 November 2012, LawLex201200002328JBJ; Cass. com., 5 January 2016, LawLex201600000051JBJ.

See CA Orléans, 3 March 2016, LawLex201600000592JBJ ; CA Paris, 28 February 2018, LawLex201800000369JBJ

 Cass. com., 27 April 2011, LawLex201100000855JBJ, upholding CA Versailles, 3 September 2009, LawLex201000000318JBJ; CA Douai, 30 September 1996, LawLex200200004710JBJ.

The Hague Convention of 14 March 1978, Article 6(2):"However, the internal law of the State where the agent is primarily to act shall apply if the principal has his business establishment or, if he has none, his habitual residence in that State".

CA Paris, 12 September 1997, LawLex200200004876JBJ.

Although the regulation does not affect the application of international conventions to which the Member States are party such as the Hague Convention, it prevails over conventions concluded exclusively between two or several of the Member States insofar as they concern matters governed by the regulation. This is not the case in relation to representation, which is excluded by Article 1(2)(g) and remains subject to the rules of the Hague Convention, even in cases of conflicts involving two Member States.

Case C-381/98 Ingmar GB [2000] ECR I-9305, LawLex200900000602JBJ: “Articles 17 and 18 of Council Directive 86-653-EEC of 18 December 1986 on the coordination of the laws of the Member States relating to self-employed commercial agents, which guarantee certain rights to commercial agents after termination of agency contracts, must be applied where the commercial agent carried on his activity in a Member State although the principal is established in a non-member country and a clause of the contract stipulates that the contract is to be governed by the law of that country”.

Case C-184/12 United Antwerp Maritime Agencies NV, Judgment of 17 October 2013, LawLex201300001533JBJ.

CA Paris, 12 February 2013, LawLex201300000185JBJ.

Cass. com., 5 January 2016, LawLex201600000051JBJ; 28 November 2000, LawLex200200004875JBJ.

CA Paris, 23 October 2012, LawLex201200002280JBJ, taking the view that the provisions of Article L. 134-12 of the Commercial Code, which are not mandatory provisions of international law, cannot be relied on against an international conviction when their application is invoked by an agent who operates only in the Middle East; 13 February 2020, LawLex202000000243JBJ.; 13 February 2020, LawLex202000000243JBJ; 23 November 2021, LawLex202100006023JBJ; 10 March 2022, LawLex202200001461JBJ; 4 July 2023, LawLex202300008844JBJ. See also CA Aix-en-Provence, 7 October 2021, LawLex202100005640JBJ. 

See, for example, CA Lyon, 6 November 2007, LawLex200900001240JBJ; CA Orléans, 25 March 1999, LawLex200200004981JBJ: where there is no express choice of the parties or choice resulting with reasonable certainty from the contract and the circumstances of the case, the law applicable to an international commercial agency contract is that of the State in which the agent is domiciled at the time of the formation of the contract; CA Paris, 22 May 1991, LawLex200400002759JBJ: where the parties have not clearly determined the law applicable to disputes arising out of the contract, those disputes are subject to the law of the country in which the commercial agent carries out his activity; CA Paris, 22 June 2021, LawLex202100004101JBJ: where the agent is established in Israel at the time the agreement is formed and his services are performed exclusively there, the law applicable to the commercial agency agreement is Israeli law in accordance with Article 6 of the Hague Convention of 14 March 1978.

French Distribution Law

529. Governing law: The Hague Convention of 14 March 1978 and Rome (I) Regulation.

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529. Governing law: The Hague Convention of 14 March 1978 and Rome (I) Regulation.

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Les décisions de justice citées dans ce paragraphe :

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