You built a distribution or supply relationship in France from abroad, orders flowed for years, and one morning your French partner announces it is over, effective immediately, or cuts your volumes by eighty percent without warning. From London, New York or Dubai you wonder whether a French court will even hear you, what a reasonable notice period looks like when no contract fixes one, and how damages are counted when part of the business survived. French law answers these questions with a single powerful mechanism: liability for the sudden termination of an established commercial relationship, now codified in the Commercial Code, applied daily by the Paris Court of Appeal and policed by the Commercial Chamber of the Court of Cassation. This article explains, for a foreign company operating in France from abroad, when the relationship counts as established, how judges measure the missing notice, how the lost gross margin over that notice period becomes your damages, and which court and emergency procedure to use before the evidence goes cold. Our founding guide to setting up a company in France as a foreign founder covers the company itself; this article covers what happens when the French partner walks away.

I. Your French business relationship is protected even without a written French contract

A. How French courts identify an established commercial relationship run from abroad

Many foreign founders assume that without a signed French distribution agreement, or with a contract that allows termination at any time, the French partner owes them nothing. That assumption is dangerous. The Commercial Code provides that the sudden termination, even partial, of an established commercial relationship, without written notice that takes account of the length of the relationship, by any person carrying on production, distribution or service activities, makes its author liable and obliges that author to compensate the harm caused. The current text is Article L442-1 II of the Commercial Code, which took over from the former Article L442-6 I 5 with the same substance, and it applies whether you run a French subsidiary, a registered branch, or sell into France from your home company while directing everything from abroad.

Three conditions open the protection, and each of them is read in a business-friendly way. First, the relationship must be commercial, meaning it connects activities of production, distribution or services. The Court of Cassation gives this requirement a wide scope. In a 2023 decision concerning a shopping-centre co-owners association, a body with civil legal personality that had hired a security company for fire safety and surveillance, the Court approved the finding that the association had acted in the interest of operating its members’ retail businesses, holding word for word that “la cour d’appel a exactement retenu que le syndicat, bien que de nature civile, avait entretenu une relation commerciale avec la société Securitas, entrant dans le champ d’application de l’article L. 442-6, I, 5° précité” (Cass. com., 28 June 2023, No. 21-16.940). For a foreign principal, the lesson is direct: even where your contractual counterpart looks non-commercial on paper, such as an association, a public-sector buyer acting for traders, or a purchasing platform, the court looks at the economic reality of the flow of goods or services, not at the legal label.

Second, the relationship must be established, which means stable, regular and significant, not occasional or experimental. Judges examine the duration, the regularity of orders or deliveries, the share of your turnover it represents, and the investments you made for it: stock, staff hired in France, marketing, certification, or a warehouse. A twenty-three-year relationship with a quarter of turnover was treated as plainly established in the Decathlon litigation decided in 2025 (Cass. com., 19 March 2025, No. 23-23.507), but relationships of two or three years with steady monthly orders regularly qualify before the Paris Court of Appeal, whose specialised Pôle 5, Chambre 4 hears most of these cases. Keep every purchase order, invoice, delivery note, email discussing forecasts, and your French VAT returns showing the flow: from abroad, your paper trail is your presence.

Third, the break must be sudden, meaning no sufficient written notice, or a notice that exists on paper but is emptied of substance. A letter that says the relationship ends in twelve months but immediately diverts all volumes elsewhere, degrades your prices, or stops sharing the forecasts you need to redeploy, is not effective notice. The Court of Cassation stated the rule bluntly in 2025: “Il résulte de l’article L. 442-6, I, 5°, du code de commerce, dans sa rédaction antérieure à celle issue de l’ordonnance n° 2019-359 du 24 avril 2019, que le préavis accordé à la suite de la rupture d’une relation commerciale établie doit être effectif, de sorte que, sauf circonstances particulières, la relation commerciale doit se poursuivre aux conditions antérieures pendant l’exécution du préavis, ce qui implique que les modifications qui peuvent lui être apportées ne doivent pas être substantielles” (Cass. com., 19 March 2025, No. 23-23.507). In plain English: during the notice period, business must continue on the previous terms, and only minor adjustments are tolerated.

Two traps catch foreign companies in particular. The first is the buyer who takes over your distributor’s business and claims the old relationship died with the old company, so no notice was due. The Court of Cassation rejected that shortcut in 2021: “En matière de rupture brutale d’une relation commerciale établie, la seule circonstance qu’un tiers, ayant repris l’activité ou partie de l’activité d’une personne, continue une relation commerciale que celle-ci entretenait précédemment ne suffit pas à établir que c’est la même relation commerciale qui s’est poursuivie avec le partenaire concerné, si ne s’y ajoutent des éléments démontrant que telle était la commune intention des parties” (Cass. com., 10 February 2021, No. 19-15.369). Read both ways, this protects you if you acquire a French business and the supplier claims you inherited its notice obligations without your agreement, and it protects you if your distributor sells its assets to a competitor who then pretends your history started from zero. Intention proved by documents decides, not the mere continuation of orders.

The second trap is the partial rupture dressed up as a commercial adjustment. A buyer who slashes orders by half or more, launches repeated tenders designed to squeeze you out, or shifts volumes to a sister company while keeping a symbolic trickle with you, can commit a partial sudden termination. Since the current Article L442-1 II of the Commercial Code expressly covers substantial reductions in order volumes, including temporary ones, where their scale, unusual character or circumstances threaten the balance of the established relationship, you should treat a dramatic volume drop exactly like a termination letter: send a formal demand for written notice, record the previous twelve months of volumes, and have counsel assess the case while the data is fresh. The Wipelec decision of January 2025, where a high-technology parts buyer drastically cut orders from mid-2018 without the six months’ notice it owed, shows courts condone no such disguise (Cass. com., 29 January 2025, No. 23-19.972).

Note the two statutory exits, which the author of the break will always invoke. No notice is required where the other party failed to perform its obligations or in cases of force majeure, and the current text adds a ceiling: once eighteen months’ notice has been given, liability for insufficient duration can no longer be pursued. Your defence file from abroad must therefore show clean performance on your side: deliveries on time, goods conforming, invoices properly issued under French electronic-invoicing rules. Any documented breach by your company hands the partner the one argument that kills the claim at birth.

B. How the judge measures the notice you should have received

French courts do not award a fixed number of months per year of relationship. They ask a practical question: how much time did the abandoned company reasonably need to redeploy its business, find another partner or an alternative solution. The Commercial Code directs the judge to consider the length of the relationship, trade usages or interprofessional agreements, and, for price purposes during the notice, the economic conditions of the market where the parties operate (Article L442-1 II of the Commercial Code). In practice the Paris courts weigh a familiar checklist, and a foreign company should score itself on each item before writing any demand letter.

Duration is the starting point but never the whole answer. A twenty-year relationship points toward twelve to eighteen months, a five-year relationship toward six to twelve, a two-year relationship toward three to six, yet each of these moves up or down with the other factors. Dependence matters more than founders expect: the share of the turnover achieved with the departing partner, the proportion of your French revenue it represents, and whether alternative outlets realistically exist for your product in France. In the Decathlon case the Court approved reasoning that a twenty-three-year relationship with only twenty-four percent of turnover, no exclusivity, on a narrow electrostimulation market with no proven dedicated investment, justified a shorter notice than the victim claimed, which is why the partial cassation turned on other points (Cass. com., 19 March 2025, No. 23-23.507). Read that as a warning: long relationships with low dependence and easy reconversion get modest notice periods, while high dependence with dedicated tooling gets long ones.

Exclusivity and reconversion costs push the period upward. If your French partner required you to reserve capacity, hold consignment stock near Lyon, obtain French certification, hire a technician, or refrain from selling to competitors, each of these facts adds months, because they lengthen the redeployment time the notice is supposed to buy you. Document them with contracts, emails imposing the requirement, payroll records of the French hires, and the certification invoices. Conversely, the author of the rupture will argue you could have replaced the volumes quickly, that your product is standard, that you sell the same goods in other countries, and that you already prospect new French outlets. Prepare answers: standard products still need listings with French retailers, whose referencing cycles run once a year; export sales elsewhere do not absorb French-language packaging or France-specific certification; and a few exploratory emails are not a replacement contract.

Contractual notice clauses do not have the last word. French contract law states that lawfully formed contracts stand as law between the parties (Article 1103 of the Civil Code) and that contracts must be negotiated, formed and performed in good faith, a provision of public policy (Article 1104 of the Civil Code), yet the statutory notice for established commercial relationships overrides a shorter contractual clause whenever the clause leaves the victim without the redeployment time it reasonably needed. A one-month termination clause in a five-year exclusive distribution arrangement will not survive contact with the statute. Symmetrically, a contract that grants eighteen months or more closes the debate on duration by statute, though you can still dispute brutality in execution, such as degraded conditions during the notice.

From abroad, act on notice arithmetic within days, not quarters. First, freeze the evidence: export your ordering platform history, save the EDI logs, download the invoices issued and paid, and ask your French accountant for the monthly sales ledger with this partner over the last three years. Second, have counsel compare your situation with the usages of your sector, because interprofessional agreements in food retail, automotive supply or publishing sometimes fix reference periods the Paris court will consult. Third, send the partner a registered letter, by a French bailiff-commissioner if volumes justify it, recording that no written notice accounting for the relationship’s duration was given and reserving all rights. That letter both starts settlement pressure and fixes the date from which your damages thinking begins. It costs little and it prevents the partner from later claiming you acquiesced.

One final measurement point: where several distinct commercial relationships exist with the same group, for example a supply contract plus a separate logistics contract, each rupture carries its own notice assessed against its own duration, as the Court recalled when censuring a global assessment in the Franciaflex litigation (Cass. com., 10 February 2021, No. 19-15.369). If your French partner terminates two streams on different dates, build two notice files, not one.

II. How a foreign company turns a sudden cut-off into damages and emergency orders

A. How damages are calculated from the missing notice and the lost gross margin

French law compensates only the brutality, not the rupture itself. Your partner was entitled to leave; it was not entitled to leave overnight. Damages therefore equal the margin you would have earned during the missing notice period, had business continued on prior terms, and nothing else. Restructuring costs, layoffs, the hypothetical value of ten more years of relationship, and pain-and-suffering style claims are excluded. The general contract principle behind this is that even for serious fault, damages cover only what is an immediate and direct consequence of non-performance (Article 1231-4 of the Civil Code), applied here to the missing notice months.

The computation runs in three steps that your French accountant can prepare remotely. Step one: determine the monthly gross margin on variable costs with this partner over a representative reference period, usually the last twelve months, sometimes the last three years if the business is seasonal. Gross margin means turnover minus variable costs such as raw materials, subcontracting and transport directly tied to those sales; fixed overhead is not deducted at this stage, because the point is what the notice months would have contributed. Step two: multiply that monthly margin by the number of missing notice months, meaning the reasonable notice the court would have set minus the notice actually granted. Step three: where the rupture was only partial, subtract the margin actually earned on the surviving orders during those same missing-notice months. The Court of Cassation imposed exactly this method in January 2025, holding word for word: “En statuant ainsi, alors qu’en cas de rupture partielle d’une relation commerciale établie, le préjudice résultant du caractère brutal de la rupture s’évalue en considération de la diminution de la marge brute escomptée pendant la seule durée du préavis, la cour d’appel a violé le texte et le principe susvisés” (Cass. com., 29 January 2025, No. 23-19.972), then fixing the award itself at 79,770.71 euros by multiplying a monthly margin of 15,261 euros by six missing months and deducting the margin earned in the second half of 2018.

Worked through with round numbers, the logic is transparent. Suppose your French distributor generated 100,000 euros of monthly turnover at an 85 percent margin on variable costs, hence 85,000 euros of monthly margin, and the court finds twelve months’ notice was due while only two were granted. The missing ten months yield 850,000 euros before any deduction. If the relationship continued at a trickle producing 11,795 euros of margin during those ten months, that sum is deducted and the award falls to about 838,000 euros. The arithmetic is simple; the fight is always over the inputs, which is why forensic-quality accounting evidence decides these cases. Have your expert prepare a monthly margin table, reconcile it with the filed accounts and VAT returns, and disclose the method, because Paris judges distrust black-box averages handed over without workings.

Three recurring battles deserve preparation. The reference period battle: the author of the rupture pushes for a depressed recent period, such as months already affected by its announced disengagement, while you argue for the last full normal year. The margin-rate battle: variable versus fixed cost classification moves the rate by tens of points, so align your expert with French accounting usage before the first exchange of submissions. The mitigation battle: the partner argues you replaced the volumes quickly and suffered nothing, while you prove the replacement customer took eight months to list you and at lower volumes. None of these is decided by assertion; each is decided by dated documents, which a foreign company can assemble through its French accountant, its bank statements showing incoming payments, and its customer relationship records, without anyone boarding a plane.

Interest and ancillary claims complete the picture. Contractual penalty clauses between merchants must respect the written-convention framework of Article L441-4 of the Commercial Code where it applies, and judges reduce penalties that punish rather than compensate. Late-payment penalties and recovery costs on invoices already issued survive the rupture and follow their own regime. Legal costs recovery under Article 700 of the Code of Civil Procedure rarely covers the full bill, so budget the case as an investment whose return is the margin award, and calibrate any settlement floor against the three-step computation rather than against anger.

B. Which court to seize from abroad, which deadline applies and which proof wins

Jurisdiction first, because suing in the wrong court wastes the months your evidence stays fresh. Claims for sudden termination of an established commercial relationship belong to the specialised courts: eight designated judicial courts and commercial courts hear them at first instance, with the Paris courts the natural venue for most international supply chains, and the action can be brought by any person with standing, the public prosecutor, the Minister for the Economy or the President of the Competition Authority, while any interested person can seek both an order ending the practice and compensation (Article L442-4 of the Commercial Code). Check your contract’s jurisdiction clause before filing: a valid clause designating, say, the courts of Milan does not automatically defeat the French specialised jurisdiction for this statutory tort claim, but litigating the clause adds a year, so have counsel assess it before you commit filing fees. Where your contract contains an arbitration clause, the analysis is even more delicate and must be done first, not after the writ is served.

Limitation is the second trap. Commercial obligations between merchants, or between merchants and non-merchants, expire after five years unless a shorter special period applies (Article L110-4 of the Commercial Code), and the clock for sudden termination runs from the rupture, not from the first difficulties. Five years sounds comfortable until you realise memories fade, buyers change jobs, ordering portals are purged, and your French accountant archives the ledgers. File, or at minimum put the partner on formal notice and open settlement talks that interrupt or suspend the clock, within months. From abroad, a French lawyer with a power of attorney does everything: the writ, the filings, the hearings. Your personal attendance is almost never required at first instance, and videoconference arrangements exist for the hearings where the court wants to hear the director.

Evidence wins these cases, and the hierarchy of proof is stable. At the top sit contemporaneous business records: the full order and invoice history, delivery confirmations, the partner’s forecasts, joint business plans, emails announcing the cut, and your Kbis extract plus registration data proving who contracted with whom. The Kbis is the official identity certificate of a French company, issued by the greffe, the registry office of the commercial court, and every filing or publication about the company appears in the BODACC, the official bulletin of civil and commercial announcements; cite the correct entities from these documents, because suing the wrong group company is a classic foreign-company error. Next come the dependence proofs: share of turnover tables certified by your accountant, investment invoices, hiring records, exclusivity correspondence. Last come witness statements from the departed buyer’s former staff or from fellow suppliers, useful but never sufficient alone.

Emergency relief exists but must be requested with precision. The president of the judicial court, ruling in summary proceedings even where a serious dispute exists, can order conservatory or restoration measures to prevent imminent damage or stop a manifestly unlawful disturbance, and where the obligation is not seriously disputable, can grant an interim payment or order performance of the obligation, even an obligation to act (Article 835 of the Code of Civil Procedure). In rupture cases, courts use this route to order the temporary continuation of deliveries, the release of tooling or stock held hostage, or an interim payment on account of the final damages where the brutality is obvious and documented. Frame the request narrowly: keep the trucks rolling for three months, release the moulds this week, pay a quantified provision. Asking the summary judge to decide the whole notice-duration debate fails, because that debate is seriously disputable by nature; asking for targeted preservation usually succeeds where the documents are clean.

Run the procedure from abroad in this order. Week one: preserve everything, instruct French counsel, and send the formal notice demanding written notice and continuation on prior terms. Weeks two to six: file for summary relief if trucks, tooling or perishable stock are at stake, while the accountant builds the margin table. Months two to six: serve the writ on the merits before the competent specialised court, attach the margin computation and the dependence file, and propose a court-supervised settlement conference, which Paris judges favour in these matters. Throughout, keep trading correspondence factual and in writing; angry phone calls create no record, and in a system where the paper trail decides, the calm party with complete exhibits usually collects.

Conclusion

A French partner can end the relationship, but it cannot end it overnight, and it cannot empty a notice period of its substance, slash volumes in disguise, or hide behind a takeover to erase your history. For a company run from abroad, the winning reflex is procedural: recognise the established relationship early, demand written notice that matches its duration, keep business running on prior terms through that notice, and convert the missing months into a margin-based damages claim supported by accountant-certified tables. The statute gives you up to eighteen months of protected redeployment time, the case law tells you exactly how courts count it, and the summary judge can keep the essentials alive while the merits case runs its course. Put the evidence under seal in the first week, have the margin arithmetic ready in the first month, and negotiate from the resulting number rather than from frustration. Distance is no handicap in this litigation; incomplete records are.

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