Distribution agreements in France: exclusivity, termination and compensation

France has no statute written for distribution agreements, but it has one rule every supplier meets at the end: whoever breaks off an established commercial relationship without written notice that reflects how long the relationship lasted must pay damages (Code de commerce, article L442-1 II).

Putting it simply: the contract you sign decides exclusivity, targets and exit, within French contract law and EU competition law. When the relationship ends, a French court will ask whether the notice was long enough for the relationship's age, whatever the contract says, and 18 months' written notice is the statutory point beyond which the length of notice can no longer be attacked. Distributors have no statutory goodwill indemnity; that right belongs to commercial agents. Other French rules touch the draft: a 10-year cap on exclusive purchasing, an information document when your brand comes with exclusivity, and a ban on minimum resale prices.

This page is general information as of 8 November 2026, not legal advice. Have the draft reviewed by a lawyer qualified in France.

Which law governs the agreement

Competition law sets the outer frame. Regulation (EU) 2022/720 (the vertical block exemption, VBER) exempts exclusive and selective distribution agreements where neither party's market share exceeds 30% (article 3), unless the agreement contains a hardcore restriction: fixed or minimum resale prices (article 4(a)), bans on passive sales outside the permitted exceptions (article 4(b)), or preventing the effective use of the internet to sell (article 4(e)). The exemption expires on 31 May 2034. The Commercial Agents Directive 86/653/EEC covers intermediaries who negotiate on behalf of a principal (article 1(2)); a distributor buys and resells in its own name, so its protection is a matter of national law.

Inside France, the agreement is an unnamed contract under the Code civil, which requires good faith in negotiation, formation and performance as a rule of public order (article 1104), with the Code de commerce rules on exclusivity clauses and restrictive practices on top.

Under Rome I (Regulation 593/2008) the parties may choose the governing law (article 3); without a choice, a distribution contract is governed by the law of the country where the distributor has its habitual residence (article 4(1)(f)), so French law for a French distributor. Article 9 lets a court apply the overriding mandatory provisions of its own law whatever the parties chose. Whether article L442-1 II is such a provision has been argued in French courts for years; as of 8 November 2026 we could not confirm a Cour de cassation ruling that settles it for distribution contracts under Rome I, so assume a French court may apply it even if you chose another law.

On jurisdiction, Brussels I bis (Regulation 1215/2012) gives effect to a written choice of court (article 25). The Court of Justice held in Granarolo (C-196/15, 14 July 2016), interpreting the predecessor Regulation 44/2001, that a claim for abrupt termination of a long-standing business relationship is not a matter relating to tort where a tacit contractual relationship existed between the parties. For international jurisdiction outside the scope of EU law, the Cour de cassation treats the same claim as tortious (1re civ., 12 March 2025, n° 23-22.051). It has also upheld a foreign jurisdiction clause in a distribution contract covering any dispute born of the contract, even where French mandatory provisions might apply to the merits (1re civ., 22 October 2008, n° 07-15.823). Inside France, disputes under article L442-1 go only to eight designated commercial courts (Marseille, Bordeaux, Tourcoing, Fort-de-France, Lyon, Nancy, Paris and Rennes for commercial parties), with appeals to the Paris Court of Appeal (articles L442-4 III and D442-2, annex 4-2-1). Since 1 January 2025 twelve commercial courts, including those of Marseille, Lyon, Nancy and Paris, have been renamed tribunaux des activités économiques on an experimental basis (law n° 2023-1059).

Exclusivity and territory

The VBER vocabulary is the working one. Under an exclusive system you may stop the distributor from actively selling into territories or customer groups reserved to you or allocated to up to five other exclusive distributors (article 4(b)(i)); "active sales" means targeting customers by visits, letters, e-mails, calls or targeted advertising, online or offline (article 1). You may not stop passive sales, meaning responses to unsolicited requests, and you may not block the distributor's website.

One French rule caps the distributor's side: a clause by which the buyer of goods undertakes not to use similar or complementary goods from another supplier is valid for at most ten years (article L330-1), and later analogous agreements between the same parties end on the date of the first (article L330-2). The VBER is tighter: a non-compete over five years or of indefinite duration falls outside the exemption (article 5(1)(a)).

If you make your trade name, trade mark or shop sign available to the distributor and require exclusivity or quasi-exclusivity for its business, article L330-3 (the Loi Doubin) obliges you to hand over a pre-contractual information document and the draft contract at least 20 days before signature. Its contents are listed in article R330-1, and late delivery is a fifth-class offence (article R330-2). Whether a plain reseller of your branded goods falls within this text is a question for the lawyer; ask early, because the 20 days affect your timetable.

Term, termination and notice

The Code civil gives the baseline. Perpetual commitments are prohibited (article 1210). An indefinite-term contract can be ended by either party at any time with the contractual notice or, failing that, a reasonable notice (article 1211). A fixed-term contract must be performed until its term, and nobody can demand its renewal (article 1212); if the parties carry on after the term, it is tacitly renewed (article 1215).

Article L442-1 II then applies to any established commercial relationship, whatever the contract says. Breaking it off brutally, even partially, without written notice that takes account in particular of the length of the relationship, by reference to trade usage or inter-professional agreements, makes the author liable for the loss. A substantial cut in order volumes that compromises the relationship's balance can also engage liability. Where the parties disagree on notice length, the author cannot be held liable for insufficient notice if it gave 18 months. Termination without notice remains possible for the other party's failure to perform or for force majeure.

How long is enough is decided case by case. In a 2012 decision, the Cour de cassation upheld a ruling that seven months' notice given to an exclusive distributor of agricultural machinery after almost fifteen years, with around 80% of its turnover tied to the brand, was insufficient; the court of appeal set the required notice at 20 months and awarded damages for the 13 missing months (Com., 6 November 2012, n° 11-24.570). The case concerned notice of non-renewal, and only the loss caused by the brutality was compensated. It predates the 18-month rule.

For breach, the Code civil allows termination through an express termination clause, by notification for a sufficiently serious breach, or by a court (article 1224). An express clause must name the obligations whose breach triggers it, and a formal notice must mention the clause expressly (article 1225); termination by notification requires a prior formal notice giving a reasonable time to perform, except in urgency (article 1226). We found no registration requirement for a distribution agreement in France; notice under article L442-1 II must be written.

Compensation at the end

There is no statutory goodwill or clientele indemnity for distributors in France. The end-of-contract indemnity in article L134-12 belongs to commercial agents, who lose it unless they notify the principal within one year, and cannot contract it away to their detriment (article L134-16). A distributor buying and reselling in its own name sits outside that chapter. A distributor that in practice negotiates on your behalf rather than reselling may be treated as an agent, so keep the roles clean in the contract and in practice.

What a distributor can claim at the end is damages under article L442-1 II if the notice was too short, measured on the notice it should have had (see the 2012 decision above), plus any contractual remedies such as a stock buy-back. The practical protection is written notice proportionate to the relationship, up to the 18-month mark.

Other clauses the local lawyer will look at

• Non-compete: during the term, the ten-year cap of article L330-1 and the VBER five-year limit; after the term, the VBER exempts only a one-year restriction limited to competing goods, to the premises the distributor used, and indispensable to protect your know-how (article 5(3)).
• Resale prices: imposing a minimum resale price or a minimum margin, directly or indirectly, is punishable by a €15,000 fine (article L442-6), and it is also a VBER hardcore restriction. Maximum and recommended prices are allowed under the VBER if they do not work as fixed prices.
• Significant imbalance: a clause that creates a significant imbalance in the parties' rights and obligations, or an advantage with no real counterpart, engages liability (article L442-1 I).
• General terms and the annual agreement: your conditions générales de vente must be given to any professional buyer who asks and are "le socle unique de la négociation commerciale" (article L441-1). Articles L441-3 and L441-3-1 require a written agreement between supplier and distributor or wholesaler recording the outcome of the negotiation; under article L441-3 it runs for one, two or three years and is concluded by 1 March.
• Payment terms: agreed terms cannot exceed 60 days from the invoice date, or 45 days end of month if expressly agreed (article L441-10). The France playbook covers e-invoicing.
• Language: the Loi Toubon makes French mandatory in the designation, offer, presentation, instructions for use and warranty terms of goods, and in invoices (article 2). Article 5 requires French for contracts to which a public-law entity or a private body performing a public-service mission is party; it does not cover a contract between two private companies, which may be in English.
• Stock, trade marks and domain names: agree the fate of stock and the .fr domain at the end; register the mark in your own name.
• Disputes: commercial disputes may be sent to arbitration by agreement (article L721-3).

A first-draft checklist

• State that the distributor buys and resells in its own name and does not negotiate for you.
• Choose the governing law and courts expressly, and assume article L442-1 II may still apply before a French court.
• Write a notice period that grows with the relationship's age, and cap the scale at 18 months.
• Give every notice of termination or non-renewal in writing and keep proof of the date.
• Define the territory and customer groups, list the reserved ones, and restrict active sales only.
• Keep any non-compete within five years during the term and within VBER article 5(3) after it.
• Check whether article L330-3 applies and, if so, send the information document and draft 20 days before signature.
• Use recommended or maximum resale prices only.
• Set minimum purchase targets with a stated consequence, such as loss of exclusivity, rather than a vague right to terminate.
• Draft an express termination clause naming the obligations whose breach triggers it.
• Agree stock buy-back, return of materials, the domain name and trade mark ownership at the end.
• Keep the agreement, price conditions and annual terms consistent with your French conditions générales de vente.

What this means for a manufacturer

In France the cost of ending a distribution relationship comes from short notice. Plan the exit when you sign: a written notice scale tied to the relationship's age, a clean distributor role, and VBER-compliant exclusivity cover most of the risk. Check early whether the 20-day information document applies, and have a French lawyer review the draft.

Where Cresques fits

Cresques shows the companies that already win public contracts for your category in France, with the award notices as evidence, and their profiles, so you know who you are negotiating with before the contract stage. It also drafts a first message in French for the lawful channel. Start from the France market page and the France playbook.

This is not legal advice; have the draft reviewed by a lawyer qualified in France.