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

Lease management ("location-gérance") - or free management ("gérance libre") - refers to a contract pursuant to which the owner of a business does not operate the business himself but rents it to a manager who operates it on his behalf. Unlike the salaried manager (see No 8.28), the free manager is a merchant. Initially, this type of contract was used for the operation of businesses that owners could not operate themselves . Likewise, the potential purchaser of a business of which the owner wished to retire could in this way “try out” the business before deciding whether to purchase it.

In order to combat speculation which was prevalent after World War II - those with capital would purchase businesses to rent and this could lead to price rises and bad business practices - the legislator adopted the Law of 20 March 1956 to govern that practice. Lease management is currently governed by Articles L. 144-1 to L. 144-13 of the Commercial Code.

According to the Court of Cassation, the operation of a business by a company legally distinct from the owner of the business, at its own risks and in their common interest, is a lease management contract .

For example, a minor who inherits a business, or a person who carries out a function that is incompatible with the status of trader.

Cass. com., 23 March 1999, LawLex200200005195JBJ.

533. Context.