Distribution agreement lawyer Paris: for resellers and distributors.

Yes, to a large extent, and the reseller should know this before incurring costs. The Court of Cassation dismissed the appeal of an excluded car repairer, holding that “Neither European competition law nor national competition law prohibits the mere refusal, by the operator at the head of a qualitative selective distribution network, to approve distributors that meet the selection criteria” (Cass. com., 16 February 2022, No. 20-11.754) (our translation). The same judgment states that the requirement to apply the criteria uniformly is a matter of competition law and not of contractual good faith. In an earlier case, it had set aside the judgment that criticised the manufacturer, in the name of good faith, for not having selected its distributors on objective criteria (Cass. com., 27 March 2019, No. 17-22.083). Both solutions are unfavourable to the rejected candidate. The refusal becomes open to challenge where it reflects a discriminatory application of the criteria, or where the refusal itself has the object or effect of restricting competition within the meaning of Article L. 420-1 of the French Commercial Code, where it reveals an abuse of the right not to contract, which the 2022 judgment dismissed on the facts, or where it ends an already established commercial relationship without sufficient notice. The firm therefore examines the earlier relationship, the published criteria and the treatment of the other members before advising on any action.

An outright ban is problematic. Article 4(e) of Regulation (EU) 2022/720 removes the benefit of the exemption from agreements whose object is to prevent the buyer or its customers from effectively using the internet to sell the products, because such a clause restricts the territory or the customers. The same text nevertheless leaves the supplier able to impose other restrictions on online sales, as well as restrictions on online advertising that do not entirely prevent the use of a channel. A supplier may therefore set quality requirements for the reseller’s website or regulate the use of certain platforms, without closing off access to e-commerce. The analysis also depends on the market share thresholds of Article 3: above 30%, the automatic exemption no longer applies and the clause must be assessed under Article 101 of the Treaty, subject to Article 8(d), which maintains the exemption for two calendar years where the threshold is crossed during the agreement. The firm reads the clause, the internet charter and the exchanges on marketplaces, then distinguishes what is an accepted qualitative requirement from what amounts, in practice, to preventing online sales. The Regulation expires on 31 May 2034, under its Article 11.

The answer depends on the recipient. In a selective distribution system, Article 4(c)(ii) of Regulation (EU) 2022/720 removes the benefit of the exemption from agreements that restrict cross-supplies between members of the network, whether they operate at the same or at different trade levels. An authorised reseller may therefore, in principle, sell to another authorised reseller. By contrast, the supplier may prohibit active or passive sales to non-approved distributors located in the territory where the system is operated, under Article 4(c)(i)(2). A reseller that breaches this prohibition risks termination of its agreement, and a third party that participates in the breach incurs liability under Article L. 442-2 of the French Commercial Code, provided that the agreement is exempted. The supplier must then prove its network: the Versailles court of appeal upheld the rejection of its claims based on harm to the network, on the ground that “demonstrating the lawfulness of a selective distribution network first requires establishing the very existence of that network” (CA Versailles, ch. com. 3-1, 24 June 2026, No. 24/03109) (our translation). The same decision did, however, find trade mark infringement for uses of the mark that were unrelated to designating the products. The firm checks the status of the buyer, the agreements applicable on the date of the sales and the evidence that the products were lawfully acquired.

The agreement does not automatically follow the brand. The Court of Cassation holds that “The transfer of a business including the transfer of ownership of rights in trade marks does not entail the transfer of the exclusive distribution agreement for products bearing those marks” (Cass. com., 19 October 2022, No. 21-16.169) (our translation). On that point, the distributor lost. The same judgment nevertheless opens another route, on the basis of Articles 1200 and 1240 of the French Civil Code: “a third party to a contract who becomes complicit in a party’s breach of its contractual obligations incurs tort liability” (Cass. com., 19 October 2022, No. 21-16.169) (our translation). On remand, the Paris court of appeal set aside former Article L. 442-6, I, 6°, now L. 442-2, which targets the non-approved distributor and not the manufacturer, then held the acquirer that knew of the exclusivity liable, noting that “This transfer of the business, which took place during performance of the exclusive distribution agreement, made its performance until its term impossible” (CA Paris, pole 5, ch. 5, 22 February 2024, No. 22/19027) (our translation). The exclusive distributor should therefore keep evidence that the acquirer knew of the agreement, and act against the transferor for the non-performance itself.

Notice is measured against the relationship, not only the agreement. Article L. 442-1, II, of the French Commercial Code requires written notice that takes account in particular of the length of the commercial relationship, by reference to trade usage or inter-trade agreements. In the version in force since 20 August 2026, it adds that the price applicable during the notice period takes account of the economic conditions of the market in which the parties operate. The same text sets a limit: where the party terminating has given eighteen months’ notice, it cannot be held liable on the ground of insufficient duration. It also preserves termination without notice in case of non-performance by the other party or force majeure. The judge assesses the appropriate length of notice by reference to the length of the relationship, the share of turnover made with the supplier, exclusivity and dedicated investments. In the case decided on 19 March 2025, a twenty-three-year relationship without exclusivity, representing 24% of the turnover of the supplier excluded by its distributor, called for ten months’ notice according to usage; thirty-five months had been granted and the claim was rejected (Cass. com., 19 March 2025, No. 23-23.507). The firm reconstructs these elements before calculating the missing notice.

It can, where the commercial relationship is established. A fixed-term agreement reaching its term does not, by itself, create a right to renewal. But a succession of agreements may amount to a stable relationship whose termination must be preceded by sufficient notice, within the meaning of Article L. 442-1, II, of the French Commercial Code. In a dispute between a trade mark owner and its exclusive licensee, the Court of Cassation approved the court of appeal, which had found an established relationship of twenty-eight years, made up of successive agreements renewed on broadly identical terms, ended by the exercise of an early termination option before the stipulated term. The approved judgment noted that “the fact that termination during performance is legally possible does not mean that it is foreseeable in fact” (Cass. com., 19 March 2025, No. 23-22.182) (our translation). The absence of a tacit renewal clause remains a factor of instability that the supplier will invoke. The outcome therefore depends on the facts: number of renewals, any competitive tendering, genuine or purely formal renegotiations, warnings given before expiry. The exclusive distributor gathers the successive agreements, amendments and renegotiation exchanges in order to show the concrete stability of the relationship. In the judgment cited, that stability allowed the licensee to expect the relationship to continue until the end of the last amendment; the Court does not rule there on a simple refusal to renew at expiry.

The fate of the stock is settled first by the agreement: a buy-back clause in favour of the supplier, a right to sell off the stock for a limited period, or silence that will have to be interpreted. The reseller should take an inventory of the stock and value it as soon as termination is notified, with purchase dates and prices. A sell-off period is not always the same as notice. In the judgment of 19 March 2025, the court of appeal had held that the distributor, authorised to sell off its stock after the end of the notice period, was subject to significant restrictions, in particular a ban on continuing manufacture and an obligation to sell all the stock within six months. The Court of Cassation approved the idea that “the post-contractual stock sell-off phase did not have to be counted towards the notice period due” (Cass. com., 19 March 2025, No. 23-22.182) (our translation). The proceeds of that sell-off were not deducted from the compensation for the insufficient notice. This solution requires concrete proof: it must be shown that the conditions of the sell-off period did not allow the reseller to reorganise. Where possible, the firm negotiates a buy-back at purchase price or a sell-off timetable compatible with the reseller’s redeployment, then factors it into the calculation of the loss if the negotiation fails.

In principle, no, at least not substantially. The Court of Cassation recalls that “notice given following the termination of an established commercial relationship must be effective, so that, save in particular circumstances, the commercial relationship must continue on the previous terms during the notice period” (Cass. com., 19 March 2025, No. 23-23.507) (our translation). That reasoning, given under former Article L. 442-6, I, 5°, applies whoever is the party terminating. In that case the roles were reversed: it was the distributor, as the party terminating, that had gradually reduced its purchases from its supplier. Thirty-five months’ notice, two years more than the ten months found according to usage, was a particular circumstance allowing it, since it had announced this from the outset, no longer to maintain the previous terms after the first year. The claim of the excluded supplier was rejected. Since 20 August 2026, Article L. 442-1, II, also covers a substantial reduction in the volume of orders sent to a commercial partner, in the course of negotiating a contract, even a temporary one, if its scale, unusual nature or circumstances compromise the balance of the established relationship. That provision protects first the party that receives the orders; the reseller whose deliveries decrease relies rather on the requirement of effective notice. The reseller should therefore track its volumes month by month, compare pricing and logistics terms before and after notification, and challenge any deterioration in writing as soon as it appears.

It is valid only if it remains proportionate, and the burden of proving this falls on the party relying on it. The Court of Cassation stated this in respect of a non-solicitation clause agreed between competing hardware retailers belonging to the same buying group, laying down a principle valid for any stipulation that interferes with freedom to work or freedom to undertake business: “a party relying on such a clause must show that it is proportionate to the legitimate interests to be protected having regard to the purpose of the contract” (Cass. com., 23 September 2026, No. 24-21.805) (our translation). For networks binding the operator of a retail store, Article L. 341-2 of the French Commercial Code deems unwritten any clause restricting its activity after the end of the agreement, unless it concerns competing products, is limited to the premises operated, is indispensable to protecting substantial, specific and secret know-how, and does not exceed one year. The Court of Cassation approved the setting aside of a non-re-affiliation clause that “was not indispensable to protecting the franchisor’s know-how and that it excessively interfered with the franchisee’s freedom to carry on its business” (Cass. com., 5 June 2024, No. 23-15.741) (our translation), in an estate agency franchise network. Under competition law, Article 5 of Regulation (EU) 2022/720 excludes from the exemption non-compete obligations of indefinite duration or exceeding five years, except where the buyer sells from premises and land owned by the supplier or leased by it from third parties, and, outside the strict conditions of its paragraph 3, those that outlast the agreement.

Yes, where it makes a trade name, trade mark or sign available while requiring a commitment of exclusivity or quasi-exclusivity. Article L. 330-3 of the French Commercial Code then requires a truthful information document to be provided, with the draft agreement, at least twenty days before signature or, where applicable, before payment of any sum required in advance, in particular to reserve a zone. This document states in particular the age of the business, the state and prospects of the market, the size of the network, the duration, the conditions of renewal, termination and transfer, and the scope of the exclusivities. A formally complete document is not always enough. In a franchise network, the Court of Cassation set aside a judgment that had confined itself to the conformity of the document, without examining “whether Ucar had not deliberately kept silent on the insolvency proceedings that occurred in the network after delivery of the DIP and before signature of the franchise agreement” (Cass. com., 26 June 2024, No. 23-14.085) (our translation). The judgment concerns fraudulent misrepresentation (dol), which the distributor must prove. Not every distribution agreement falls within the provision: an authorised reseller that has not entered into any exclusivity and does not use the sign does not necessarily come within it. The firm first checks this scope, then compares the information received with the real situation of the network.

A sudden termination cannot be pleaded before just any commercial court. Article L. 442-4 of the French Commercial Code refers to courts whose seat and territorial jurisdiction are set by decree, and Article D. 442-2 designates the competent commercial courts and Article D. 442-3 the competent judicial courts, while the Paris court of appeal alone hears appeals against their decisions. The Court of Cassation abandoned the former approach based on an inadmissibility objection by holding that the rule “establishes a rule of exclusive subject-matter jurisdiction and not an inadmissibility objection” (Cass. com., 18 October 2023, No. 21-15.378) (our translation). It follows that an error as to the court is now treated as a question of jurisdiction, and not as an inadmissibility that caused the claim to be lost. The choice remains strategic: a claim based on non-performance of the agreement may fall before a different judge, and a jurisdiction clause or a prior mediation clause may appear in the agreement. For a distributor based in Paris or in the Paris region (Île-de-France), the firm checks the specialised court for the area, coordinates the contractual claims with the claim based on Article L. 442-1, then checks the applicable limitation period before any writ of summons.

These grounds require demanding proof. Article L. 420-2, paragraph 2, of the French Commercial Code prohibits the abusive exploitation of a client undertaking’s state of economic dependence, where it is liable to affect the functioning or structure of competition. Ruling on appeals against the judgment concerning a penalty imposed by the French Competition Authority (Autorité de la concurrence) on a manufacturer and its wholesalers, the Court of Cassation recalls that this state is assessed according to the reputation of the brand, its market share and its share in the reseller’s turnover, and “the impossibility for the latter of obtaining, within a reasonable time, a solution that is technically and economically equivalent to the contractual relationships it has entered into with that supplier” (Cass. com., 13 May 2026, No. 22-22.623) (our translation). The appeals were dismissed. Significant imbalance under Article L. 442-1, I, 2°, requires subjecting or attempting to subject the other party to unbalanced obligations; and such subjection “implies demonstrating the absence of effective negotiation of the clauses complained of” (Cass. com., 20 November 2019, No. 18-12.823) (our translation), a judgment unfavourable to the claimant, for lack of proof. The reseller therefore keeps its negotiation exchanges, the successive versions of the agreement and any trace of a refusal to discuss the clauses.