French business law

M. Buchberger
• https://agorassas.u-paris2.fr/course/view.php?id=31430

• Clé: 22L1S1DR23
Bibliography
- France : business law, taxation, social law, Éditions Francis Lefebvre ; 2004
- French distribution law, L. et J Vogel, Bruylant, 2020 (en ligne sur site de la bibliothèque Cujas)
- French competition law, L. Vogel, Bruylant, 2020 (en ligne sur le site de la bibliothèque Cujas)
- Law and business in France, C. Mesnooh, 1994
- Corporate insolvency law : a comparative textbook, Bork, Reinhard ; 2020
- Introduction to French law, 2008 (en ligne sur le site de la bibliothèque Cujas)
- French Law. A Comparative Approach, Oxford University Press, 2010
- The reform of French contract law, edited by B. Fauvarque-Cosson and G. Wicker, 2019
• Warning concerning the translation of French legal notions

• Commerçants = « Merchants »?
Historical background of French business law
• From commercial law (droit commercial) to business law (droit des
affaires, droit de l’entreprise)
• Commercial code of 1807
• Statutes for commercial companies (« sociétés ») in 1867 and 1925
(SARL: société à responsabilité limitée)
• 1909: specific rules for going concern (« fonds de commerce »)
• 1926 and 1953: specific rules for commercial leases (« baux
commerciaux)
• Less and less differences
• Some rules which applied only to merchants now apply to other
professionals.
• “Prescription”
• Insolvency law
• Some rules were created from the beginning not only for merchants,
but for all professionals
• Competition law
• Status of “entrepreneur individuel” (EI): Law of 14 Fébruary 2022
• Topic 1 : identification of the different professionals in business law,
and presentation of the specific assets they may own
• Topic 2 : Company law
• Topic 3 : Competition law
• Topic 4 : Distribution law
• Topic 5 : Insolvency law
 Topic 1: Identification of the different
professionals in business law, and presentation
of the specific assets they may own
Title 1: Identification of the different
professionals
• « Merchants » (commerçants)
• « Craftsmen » or « artisans » (artisans)
• « Liberal professionals » (professions libérales)
• « Farmers » (agriculteurs)
Chapter 1: Merchants (les commerçants)

Section 1: Who are the merchants?

• Art. L. 121-1 Commercial code

• Merchants = those who carry out commercial acts as their usual
profession.
• Art. L. 110-1 Commercial code
• Lettre de change (« bill of exchange »)
• Movable (meuble) ; Immovable (immeuble)
Section 2: Specific rules applying to
merchants
• Rules of proof: règles de preuves
• Joint and several engagement is presumed (as opposed to article
1310 Civil code): présomption de solidarité
• Commercial courts (art. L. 721-3 commercial code): Tribunaux de
commerce
• Arbitration (art. 1442 Code of Civil Procedure): L’arbitrage
= act of entrusting a private person with the task of settling a dispute

• Arbitration clause (clause compromissoire)

= agreement by which the parties to a contract promise in advance to submit to arbitration

any disputes that may arise in connection with that contract" (Art. 1442 (new) CPC).

Art. 2061 Civ. Code: valid only between proessionals

• Arbitration agreement (le compromis)

= agreement by which the parties to a dispute which has arisen submit it to arbitration (Art.
1442 new CPC)

Art. 2060: valid between all persons

• Protection of the personal Patrimony

• Entrepreneur individuel à responsabilité limité (EIRL): Limited Liability Sole

Proprietorship

• “Special purpose patrimony” or “free standing estate” (patrimoine

d’affectation)

• law of February 14, 2022: new status of individual entrepreneur

(“Entrepreneur individual”: EI)

• Content
 Rights
Professional
Patrimony
Debts

EI
Rights
Personal
Debts Patrimony
 Rights Profesional
créditors
Claim only on the
Debts Professional
Patrimony

EI
No claim on the personal
patrimony

Rights

Debts
Chapter 2: The other professionals

Section 1: Farmers
• Article L. 311-1 of the Rural and Maritime Fishing Code : "all
activities corresponding to the control and exploitation of a biological
cycle of a plant or an animal and constituting one or more stages
necessary for the development of this cycle, as well as activities
carried out by a farmer which are an extension of the act of production
or which are supported by the farm", are considered agricultural.
• Agricultural activities are civil activities
• Fonds agricole (agricultural going-concern)
Section 2: Craftsmen (artisans)
• Manual work (activity of production, transformation or provision of
services)
• Personal work
• No speculation on the other production factors of the business (not
too many machines or too many employees, or too many sub-
contractors (« sous-traitants »))

• Butchers, locksmiths, plumbers/heaters, bakers, pastry cooks, garage

owners, fishmongers, hairdressers
• Fonds artisanal (« craft going concern »)
Section 3: Liberal professions
• Article 29 of the law of March 22 2012: "the liberal professions group
together persons exercising on a regular basis, independently and
under their responsibility, an activity of a generally civil nature whose
purpose is to provide, in the interest of the client or the public,
services that are mainly intellectual, technical or care services, by
means of appropriate professional qualifications and in compliance
with ethical principles or professional deontology.”
• Doctors, surgeons, lawyers, notaries, architects, private teaching
• Cass. 1ère civ. 7 nov. 2000: possibility to transfer a civil clientele and
recognition of a liberal going concern
Title 2: The specific assets that the merchants
may own

Chapter 1: The going concern (le fonds de

commerce)
Section 1: Notion of going concern
• Asset which includes all the movable (but not the immovable)
properties used for the exercise of the commercial activity
• An intangible movable property
• A “de facto Universality” (Universalité de fait), as opposed to a “de
jure Universality” (Universalité de droit)
Section 2: The composition of the going
concern

§1. Tangible movables (éléments corporels)

• Equipment and tools
• Merchandise (stocks)
§2. Intangible movables (éléments
incorporels)
A. The commercial name (nom commercial)
• May be: family name, a fancy name, or the name of the company
(société) if the business is carried out by a company.
• Risk to be sued for unfair competition (check on the INPI website)
• Commercial name is an intangible property (See Bordas case)
B. The external sign (l’enseigne)
C. The clientele or customer base (la
clientèle)
D. The right to a lease, the commercial property
(le droit au bail, la propriété commerciale)

E. Licenses and authorisations

F. Industrial property rights (droits de
propriété industrielle)

1. Patents (brevets)
• A solution to a technical problem
• INPI (Institut national de la propriété industrielle)
• Confer an exclusive right of exploitation for 20 years
(monopoly)
• Conditions (art. L. 611-10 of the Intellectual Property
Code):
• an invention which is new (not “part of the state of the art”),
• which results from an inventive activity,
• and which is likely to have industrial applications.
• Filing date is very important: protection starts from this
date
• Infringement action (action en contrefaçon)
2. Trademarks (les marques)
• Sign used to distinguish the goods or services of a natural or legal
person from those of other natural or legal persons, and which must
be represented in the national trademark register in such a way as to
enable any person to determine precisely and clearly the object of the
protection conferred on its owner (art. L. 711-1 CPI).
• Protection for 10 years
• Infringement action
3. Designs and models
• Monopoly conferred on any new industrial design, shape or object.
• Max. protection: 25 years
• Infringement action
Section 3: The operations on the going
concern
§1. The lease of the going concern (la
location-gérance)
• "a contract by which the owner of a going concern (known as the
lessor: “le bailleur”) grants the lease, in whole or in part, to a
manager (known as the lessee: le “locataire-gérant”) who runs it at
his own risk“: art. L. 144-1 C. com.
A. Conditions of the lease
• Lessee (locataire-gérant): must have commercial capacity (special
conditions to exercise commercial activities)
• Lessor (bailleur): Must sell a going concern which exists
• Contract must be published in a legal advertisement within 15 days of
its conclusion.
• Until it is published, the owner remains liable for the debts generated by the
operation of the business (Art. L. 144-7 C. com.).
B. Effects of the lease of the going concern

1. Between the parties

• Obligations of the owner (the lessor = le bailleur)

• Obligations of the lessee
2. With regard to third parties
• Creditors of the lessor (art. L. 144-6 Com. Code): at the time of the
lease, the creditors of the owner of the business may, if they justify
that the lease puts at risk the payment of their debts, ask the
commercial court to declare their debts immediately payable

• Creditors of the lessee (art. L. 144-7 Com. Code): until the going
concern lease contract is published, the owner of the business (the
lessor) is jointly and severally liable for the debts incurred during the
operation of the business.
C. Termination of the going concern lease
• No right for the lessee to get the renewal of the contract
• The lessee cannot claim compensation for the increase in value that
he has brought to the going concern.
• At the end of the lease, the lessee must pay immediately all his debts
§2. The sale of the going concern

A. Conditions of the sale

• Conditions for a valid contract

• Express references required (art. L. 141-2 Com. Code)
B. Effects of the sale
• Transfer of property of the going concern

• Obligations of the seller

• Warranty of deliverance (obligation de délivrance)
• Warranty of quiet enjoyment (garantie d’éviction)
• Warranty against hidden defects (garantie contre les vices cachés)

• Obligations of the buyer

• Effects with regard to third parties

Chapter II: The commercial lease
• Art. L. 145-1 and following

Section 1: Conditions of application of the

status
§1. Conditions concerning the parties
• In principle, the lessee must be a merchant registered with the RCS or
a craftsman registered with the “repertoire des métiers”, which is a
specific register for craftsmen (art. L. 145-1 C. com.).

• However, in certain cases, a person may benefit from the status of

commercial leases even though he is not registered.
 Lease of the Lease of the
premises Lessee of the
Owner of premises/
going concern Lessee of
the Owner of the the going
premises (commercial going concern concern
Lease)
§2. Conditions concerning the going concern
and the premises
• There must be a commercial activity (or a craft activity) operated by
the lessee
• the lease must concern a building or premises intended for the
exercise of the commercial activity
§3. Conditions concerning the contract

A. Short-terms agreements

• Leases of less than three years

• Seasonal rents (locations saisonnières)
B. Long-term agreements
• Long leases (baux emphytéotiques)
Section 2: Rules applying to commercial
leases
§1. Rules applying during the lease
A. Duration of the lease
• 9 years
B. Lessee’s right
• Déspécialisation (modification of the activity)
• Déspécialisation partielle
• Déspécialisation plénière

• Subleasing (sous-location)

• Transfer of the lease (cession de bail)

C. Lessee’s obligations
• Rent revisions every 3 years
• Principle for the new rent:
• fixed according to the rental value (valeur locative)
• Rental value takes into account:
• the specific nature of the premises,
• the use of the premises,
• the respective obligations of the parties,
• the local market factors (“les facteurs locaux de commercialité”: the commercial
attractiveness of the neighborhood)
• the prices obtained in the immediate neighborhood.
• But the amount of the revised rent cannot exceed a “legal platform” (un
plafond legal), which is “l’indice des loyers commerciaux”, or “l’indice
des loyers des activités tertiaires” (Commercial rent index or rents for
tertiary activities index).
§2. Rules applying at the end of the lease
• Right to a renewal of the contract or right to an eviction indemnity
(indemnité d’éviction).
 Topic 2
Company law

• SNC: société en nom collectif = « General partnership »

• SARL: société à responsabilité limitée = « Limited liability company »
• SA: société anonyme = « Corporation »
• SAS: société par actions simplifiée = Simplified shares company
Title 1: Main characteristics of companies
(sociétés) in French law
Chapter 1: Main characteristics of company
contract (contrat de société)
• Art. 1832 C. Civ. : « A company is created by two or more persons
who agree by contract to assign property or their industry to a
common purpose with a view to sharing the profit or benefiting from
the economy that may result therefrom.
• It can be created, in the cases provided for by the law, by the will of a
single person.
• The shareholders undertake to contribute to the losses ».
Section 1: The existence of two or several
shareholders
• Shareholders = associés
• When the company issues « actions » (i.e. sociétés anonymes (SA) and
Sociétés par actions simplifiées (SAS)), the shareholders are called
« actionnaires ». But you can also use the word « associés », which is more
general.
• Principle: two or more shareholders are required.
• Exception: Single shareholder companies
• EURL (« entreprise unipersonnelle à responsabilité limitée », that is a « single
owner” or “single shareholder” SARL)
• SASU (Société par actions simplifiée unipersonnelle, that is a “Single Shareholder”
SAS
Section 2: The contribution (l’apport)

§1. Importance of the contribution

• Capital (capital social) = sum of all the contributions (except contributions of services)
• In exchange of the contribution, the shareholders receives some « rights in the
capital » : « droits sociaux » (shares)
• Some companies (les sociétés par actions) issue shares which are called « actions »:
SA, SAS, etc…
• The other companies issue shares which are called « parts sociales » (« interest-
shares »: SNC, SARL, société civiles.
 Droits sociaux
(shares)

Parts sociales
Actions (« interest-
(shares): SA, shares »): SNC,
SAS, … SARL, sociétés
civiles…
§2. Different kinds of contribution
• Cash contributions (apport en numéraire)
• Contributions in kind (apport en nature)
• Contribution in services (apport en industrie)
Section 3: The sharing of profits and losses
(la participation aux résultats)
• The sharing of profits = la participation aux bénéfices
• The sharing of losses = la contribution aux pertes
• In companies with no limited liability: shareholders are liable for the
company’s debts (obligation aux dettes)
Section 4: The will to act in the company
(« l’affectio societatis »)

• Willingness of shareholders to work together as equals for the success

of the joint venture.
Chapter 2: The company as a legal entity
Section 1: Acquisition of the legal personality
(la personnalité morale)
• Articles of the company (les statuts)
- Articles must contain:
- The contribution of each shareholder
- The legal form of the company (that is SNC, SARL, SA, ou SAS)
- The purpose of the company (L’objet social)
- The name of the company (la dénomination sociale).
- The registered office or « head office » (Le siège social)
- The company’s capital
- The company’s duration (99 years maximum)
- The rules governing the company’s functioning

-
Section 2: Consequences of the legal
personality
• Risk of abuse of company’s assets : « abus de biens sociaux »
• The lift of the corporate veil (lever le voile de la personne morale)
Title 2: Forms of companies

Section 1: Commercial companies

• Art. L. 210-1 Com. code.

• Commercial companies « by their form » (sociétés commerciales par
la forme)
 Section 1: The SNC (sociétés en nom
collectif)
• ≈ « General partnership »
• Characteristics:
• At least 2 shareholders
• Company « of persons » (« sociétés de personnes » ≠ « sociétés
de capitaux »): intuitus personae
• Shareholders (associés) are merchants who need commercial
capacity
• Principle of unanimity in general meetings (assemblées générales)
• Shareholders receive « interest-shares » (parts sociales)
• Permission is required to sell the shares

• Contributions of services (apports en industrie) are allowed.

« Industrial »-shares (parts d’industrie) in exchange. No minimum capital
is required

• They are jointly and severally (“solidairement”) liable for the companies’
debts (obligation aux dettes)

• Managers of the SNC are called « gérants »

• Have all powers to act on behalf of the company

• Company is only bound to the acts which fall within the company’s
stated purpose (“actes qui entrent dans l’objet social)
 Section 2: The SARL (sociétés à
responsabilité limitée)
• ≈ Limited liability companies
• Characteristics
• Most common commercial company
• 1 to 100 shareholders (associés).
• Between « sociétés de personnes » and « sociétés de capitaux »
• Contributions of services are allowed
• Contributions in kind are allowed, but specific rules must be observed
(valuation by a “commissaire aux comptes” (external auditor)
• No minimum capital is required

• Shareholders receive “parts sociales” and not

“actions”. Sale to a third party requires an
agreement.

• Limited liability of the shareholders

• Decisions in general meetings require in principle

only a majority of vote
• Managers of the company are called “gérants”

• Managers have all powers to act on behalf of the company

• Company is bound by the act not taken within the

company’s purpose (“actes qui n’entrent pas dans l’objet
social)
 Section 3: The SA (sociétés anonymes)

§1. The shareholders of the company

• 2 or more shareholders (actionnaires). 7 at least if the SA is a listed
company
• SA can be a listed company (shares are admitted on a regulated
financial market)
• Minimum capital: 37 000 euros
• Capital company (société de capitaux)
• Contributions of services (apports en industrie) are not allowed
• Contributions in kind are allowed, but (at some
conditions) subject to the valuation by an external
auditors (commissaire aux comptes).
• Shareholders receive shares which are called
« actions ». SA is a « société par actions »
• Shareholders’liability is limited
• Decisions in general meetings require in principle only
a majority of vote
 §2. Management of the SA
• Structure with administrative board (conseil
d’administration):
• chaired by a president, the chairman (président du conseil
d’administration), known as the « PDG » (président directeur
général)
• Possibility of a general director, chief executive officer
(directeur général)

• The president of the administrative board, or the general

director, binds the company by the contract he signs, even if
the contract is not within the scope of the company’s purpose
• Structure with directorate (directoire) and
supervisory board (conseil de surveillance)
• Used by some CAC 40 companies (i.e. Vivendi)
Section 4: The SAS (société par actions
simplifiée)
• Freedom to organise the company, its management and its
functionning
• Single shareholder SAS is possible (SASU = Société par actions
simplifiée unipersonnelle)
• Contributions of services are possible
• Contributions in kind are possible
• No minimum capital
• Shares of the shareholders are called « actions », and the
shareholders are called « actionnaires »
• Limited liability of the shareholders
• General meetings are hold according to the rules provided in the
articles of the companies. Decisions in general meetings require in
principle only a majority of vote
• Manager is called the « president », CEO of the company
• Binds the company by the contracts wich do not fall within the
company’s purpose
Chapter 2: Non-commercial companies
(sociétés civiles)
• Most famous: société civile immobilière (SCI)
• 2 shareholders (associés) or more
• Société de personnes
• Principle of unanimity
• Shares are called « parts sociales ». An agreement of the other
shareholders is in principle required to sell the shares.
• Contribution of services are allowed (in exchange of « parts
d’industrie »)
• Shareholders are jointly (but not severally) liable for the company’s
debts (« obligations aux dettes »)
• Manager of the company is called « gérant »
• Power of the manager: company is only bound by contracts
concluded within the company’s purpose
 Topic 3
Competition law
(Droit de la concurrence)

• Key concept: «Enterprises »

Title 1: Protection against competition
Chapter 1: Non-competition clauses (clauses
de non-concurrence)
• One person undertakes not to compete with the beneficiary of the clause
• Exception to the principle of freedom of trade (« liberté d’entreprendre »
ou « liberté du commerce et de l’industrie »)
• Valid under certain conditions
• the prohibition must be limited in time and space
• The ban must be legitimate and proportionate
• in an employment contract, there must be financial compensation for the clause
Chapter 2: Unfair competition (concurrence
déloyale)
• Art. 1240 Civil code
• Disorganisation/disruption
• Disparagement (dénigrement)
• Pejorative statements
• Disparagement is directed either at a business or at its products or services
• must concern an identifiable person or business
• Statements must be public

• Comparative advertising is allowed

• https://www.facebook.com/lidlfrance/videos/deux-jaime-mais-pas-au-m%C3
%AAme-prix/1403105909718519/
• Imitation leading to confusion
• Parasitic behaviour
• Recent example: Cass com. 9 June 2015 n° 14-11.242, Sté Auchan France c/
Sté Cora: about the slogan (Grands volumes, petits prix)
Title 2: Protection of competition
Chapter 1: Control of operations and
practices which reduce competition

• Preventive control (a priori control): control of concentrations

(opérations de concentrations)
• A posteriori control: control of anti-competitive practices (sanction
des pratiques anticoncurrentielles)
• Competition Authority (autorité de la concurrence)
Section 1: The control of concentrations
• Combination of enterprises
• Before a concentration, enterprises involved in the operation must
notify the concentration to the Competition Authority.
§1. Scope of the control

A. Concept of concentration

• Art. L. 430-1 Com. C.

1. Mergers
1. Mergers

Absorbing Absorbed
Company Company
(société (société
absorbante) absorbée)

D
C
A
B
 Merger –absorption

Absorbing
Company

A D
B C
2. Control acquisition

3. Creation of a joint-venture (entreprise

commune)

• Most common joint-venture: joint subsidiary (filale commune)

• The join-venture must performs " all the functions of an autonomous
economic entity on a lasting (long-term) basis".
B. Thresholds of control (« seuils de
contrôle »)
• Art. L. 430-2 Com. C.
• Two cumulative thresholds must be met to trigger concentration
control:
- The combined pre-tax turnover worldwide of all the businesses
involved in the operation must exceed 150 million Euros.
- at least two of the participating legal or natural persons must have a
pre-tax turnover in France of at least 50 million.
§2. Assessment criteria (critères
d’appréciation)

A. Definition of the relevant market

• Products or services which may be substituted one for another given

(in view of) their characteristics, price, or use
• Case law about Roquefort and blue cheeses (for instance, bleu
d’Auvergne, fourme d’Ambert) (see next slide)
• Geographical limits of the market
B. Effects of the concentration
• Negative effects on competition
• Compensation by contribution to economic progress
Section 2: Control of anti-competitive
practices
§1. Cartels/anti-competitive agreements
(« ententes »)

• Art. L. 420-1 Commercial code prohibits all forms of agreement that

“have the purpose, or could have the effect of preventing, restraining
or distorting free market competition”.
 A. Principle of prohibition
• All kind of businesses can be involved in a anti-competitive cartel.
• The parties to the agreement do not have to be competitors.
• The agreements prohibited may be of various forms.
• It must have the purpose or the effect to reduce competition
• Thresholds for agreements which have the effect to reduce competition
• Vertical agreements :No control in principle if the parties hold less than 15% of
market share
• Horizontal agreements: non control in principle if the parties hold less than 10%
of market share
B. Limits to the prohibition
• Economic progress (art. L. 420-4 Com. code)*
• 4 conditions:
• An economic progress (best distributions practices, or creating or maintaining
jobs)
• The benefit of the economic progress is not only for the parties to the anti-
competitive agreement
• The harm to competition must not exceed what is necessary to reach the
economic progress
• The agreement must not eliminate competition
§2. Abuses of dominant position
• Art. L. 420-2 Com. C.
A. First condition: a dominant position
• The relevant enterprise must dominate the relevant market or a
substantial part of it.
B. Second condition: an abuse
• Anticompetitive abuse (abus de structure ou d’exclusion): practices
that have as their object or effect the elimination of competitors
• Abuse of exploitation (abus de comportement ou abus
d’exploitation)
Chapter II: Control of restrictive practices
(pratiques restrictives de concurrence)
• Prohibition per se
• DGCCRF : « Direction Générale de la concurrence, de la
consommation et de la répression des frauds” (General Directorate
for Competition, Consumer Affairs and Fraud Control)
Section 1: Restrictive practices on pricing

§1. Resale below cost (revente à perte)

• Art. L. 442-5 Com. C.
• Resale below cost threshold: purchase price
• Only resale of unaltered goods (biens revendus « en l’état »)
• Exceptions:
• Winter or summer sales (les soldes)
• Termination of the activity (Liquidation totale)
• Products that have been re-supplied at a lower
price
• The need to realign prices with other traders
operating in the same geographic zone
• Fine: 75000 euros (375 000 euros for legal entities)
§2. Minimum resale price/ Resale price
maintenance (prix minimum imposés)
• Art. L. 442-6 Com. c.
• Recommended prices are allowed
• Maximum prices are allowed
• Fine : 15000 euros
Section 2: Abuses
• Ordinance of 24 April 2019
• Art. L. 442-1 Com. C.
§1. Obtaining a benefit without consideration or which is manifestly disproportionate
to the service rendered (avantage sans contrepartie ou manifestement disproportionné)

• Article L. 442-1, I, 1° Com. C.

• Ex: Fictitious commercial cooperation
• “Têtes de gondoles” (“head of the aisle”)
§2. Obligations creating a significant
imbalance (“déséquilibre significatif”) in the
rights and obligations of the parties
• Article L. 442-1, I, 2° Com. Code
• Article L. 212-1 Consumer code
• Article 1171 Civil code: “In a standard contract, any non-negotiable
clause which is determined in advance by one of the parties that creates
a significant imbalance between the rights and obligations of the parties
to the contract is void ab initio [deemed unwritten]. Appraisal of the
significant imbalance concerns neither the main purpose of the contract,
nor the adequacy of the price to the service rendered”
§3. Sudden termination of established
relationship
• Art. L. 442-1, II Com. code
• Established duration
• Single long contract, without any definite duration (contrat à durée
indéterminée)
• Succession of fixed-term contracts (contrats à durée déterminéé)
§4. Illicit terms of the contract
• Art. L. 442-3 Com. C.
• Clauses or contracts which allow retroactive rebates (rabais),
reductions or commercial cooperation agreements are considered
null and void (ex.: wedding basket (corbeille de la mariée))

• Most favored nation clause

 Topic 4
*
Distribution law
• Distribution networks (réseaux de distribution)
• Supplier (fournisseur)
• Retailer or wholesaler (commerçant détaillant ou
grossiste)
• Distributor (distributeur)
• Agent (mandataire)
 Title I: Distributors on their own behalf
Chapter 1: Exclusive purchase agreement
(exclusivité d’approvisionnement)
• An exclusive purchase agreement obliges one contracting party to
buy specific products for resale only from the other contracting
party
• Problem with competition law
• Protection of the distributor:
• art. L. 330-1 Com. C. : max. 10 years
• Protection against restrictive practices
 Chapter 2: Exclusive supply (exclusivité de
fourniture)
Section 1: Exclusive distribution contracts
(concession exclusive)
• An exclusive distribution agreement is one in which “a
supplier (concédant) grants the distributor the right to be
the sole distributor (concessionnaire) for the products on a
given territory defined by the agreement”
Section 2: Selective distribution contracts
(distribution sélective)
• With this agreement, the distributor will be selected, according to
criteria which enable the supplier to be sure that the image of its
products will not be damaged because of the distribution.

• Art. L. 442-2 Com. C.: when there is in the contract a prohibition of

non-network resale (“revente hors reseau”) the fact for a third party
to contribute to the violation of the contract is a wrongdoing.

• But parallel import is in principle not prohibited.

Chapter 3: Franchising
• A specific know-how (= savoir-faire ») was developed by an undertaking
(the franchisor = franchiseur) to distribute its products, and this
undertaking grants independent traders (the franchisees= les
franchisés), for a fee (une redevance), the right to establish themselves
in other markets, using its business name and the business methods
that have made it successful

• Art. L. 330-3 Com. C.: when a supplier imposes its contractors a

purchase exclusivity clause, in exchange of the right to use its
trademark, its tradename or its know-how, the exclusivity clause must
give precise information provided by this article, at least 20 days before
the signing of the contract.
Title 2: Distributors on behalf of the supplier
Chapter 1: « Non-merchant » intermediaries
(intermédiaires non-commerçants)
Secrion 1: Sales representatives (= VRP
(« Voyageurs représentants placiers »)

• Labor Contract
• Conditions of the status
• VRP must represent his employer’s product on a professional basis
• Contract with the employer must cover certain mandatory issues
• must perform his activity on an exclusive and full-time basis
• Protection when the contrat terminates
• Minimum notice period
• Termination indemnity
Section 2: Commercial agents (agent
commercial)
• Mandate contract (contrat de mandat)
• Commercial agents is a « mandataire ». The other party (« the
principal ») is the « mandant ».
• Sell products in the name and on behalf of the principal
• Paid with commissions
Section 3: Managers
• A branch (une succursale)
• Difference between a branch and a subsidiary (filiale)
• Different kinds of managers
§1. Non-salaried manager of branches o retail food businesses
(Gérant non-salarié de succursale de commerce de détail
alimentaire)

• https://www.franchise-groupecasino.fr/devenir-franchise/
• Articles L. 7322-1 and following of the Labour Code
• Conditions of application
• Must be autonomous
• A food retail business activity
• Remuneration by « discounts »
• Content of the status
• The manager must manage the branch
• Remunaration in proportion of the turnover achieved
• Protection by Labor Law
• Minimum wage (« SMIC »)
• Right to obtain financial compensation for a non-competition clause
• Dismissal indemnity

• Liable for inventory shortfall (déficit d’inventaire)

§ 2. Branch managers (Gérants de
succursales)
• Art. L. 7321-2 and following of the Labor Code
• Conditions of application of the status
• Article L. 7321-2 of the Labour Code
• Must sell goods that he receives exclusively or almost exclusively
from the same company
• The activity must be carried out in premises provided or approved
by the principal
• Products must be sold under the conditions and at the prices
imposed by the principal
• Content of the status
§3. Managing agents
• Art. L. 146-1 Com. code
• Natural or legal person, registered within the RCS
• Going-concern or craft going concern
• Remuneration: commission proportionate to the turnover
• Freedom of the manager
• Protection of the managing agent
• Minimum commission provided in a framework agreement (une convention
cadre)
• Termination indemnity
Chapter 2: Merchant intermediaries
Section 1: The commission agent (les
commissionnaires)
• Art. L. 132-1 and L. 132-2 Com. code
• article L. 132-1 Commercial code, « the commission agent (le
commissionaire) acts in its own name but on behalf of the commission
principal (le commettant) ».
• The principal and the client are legally alien to each other
• The commission agent and the client are bound by the contract.
• The principal and the commission agent are governed by the commission
contract
Section 2: The brokers (les courtiers)
 Topic 5
Insolvency Law

• « Droit des entreprises en difficultés », better expression than « Droit

des procédures collectives » or « Droit des faillites »?
• Insolvency Law better expression than Bankruptcy law?
(« Banqueroute ») ? « Banqueroute is a Criminal offence.
• Distinction between the fate of the enterprise and the fate of the
entrepreneur

• Directive 2019/1023/EU of 20th June 2019 transposed into French law

by Ordinance n° 2021-1193 of the 15th September 2021
Title 1: Out-of-court proceedings
• Alert Proceeding (procédure d’alerte)

• Ad hoc agent (mandataire ad hoc)

• Voluntary and confidential proceeding
• Conciliation proceeding
• In case of an actual or foreseeable legal, economic or
financial difficulty
• The enterprise must not have been in suspension of
payments (cessation des paiements) for more than 45
days
• Definition of suspension of payment (art. L. 630-1 Com.
code): when the debtor is unable to pay its due and
payable debts (passif exigible) out of its available assets
(actif disponible) (« le débiteur ne peut pas faire face à
son passif exigible avec son actif disponible »)
• Agreement “recorded” (constaté)
• Agreement “approved” (homologue)  “Conciliation
privilege”
Title 2: In-court proceedings
• « Procédures collectives »
• Automatic staut of all creditor payment (« suspension des
poursuites »)
• Creditors must declare their claims (« déclaration de créances »)
Chapter 1: Safeguard proceeding (procédure
de sauvegarde)
Section 1: Opening of the safeguard
proceeding
• Art. L. 620-1 Com. code
• The debtor must not be in suspension of payment
Section 2: Consequences of the proceeding
• Management of the enterprise
• Insolvency Judge (juge-commissaire)
• Administrator (administrateur judiciaire)
• Creditors’ representative (mandataire judiciaire)

• Two steps after the opening of the proceeding

• 1st step: « période d’observation » (observation period)
• 2ns step: adoption of a safegard plan (« plan de sauvegarde »)
Chapter 2: Rehabilitation proceeding
(redressement judiciaire)

Section 1: Conditions of opening

• Art. L. 630-1 Com. Code

• Requires a suspension of payment
• The debtor must ask for the opening of a rehabilitation proceeding at
the latest 45 days after the suspension of payments.
Section 2: Consequences of the proceeding
• Rehabilitation plan
• Sale plan (auction(s) to sell the enterprise or its assets
Chapter 3: The liquidation proceeding
• Art. L. 640-1 Com. Code
• « Dessaisissement du débiteur »