Distribution Agreements in France: Which One to Choose

A foreign producer that wants to sell into France through a local intermediary faces a threshold question that French law answers less tidily than most expect: which contract? To sell, businesses generally rely on intermediaries described in practice as "distributors", but that single commercial word covers several very different legal figures — approved distributors, sales representatives (VRP), branch managers, commercial agents, commission agents, concessionaires and franchisees. Each performs the same economic function, yet each carries the intermediary under a distinct set of rights and duties toward the producer.

The starting point, and the point most often missed, is that there is no autonomous definition of "the distribution contract" in French law (CA Reims, 4 Oct. 2010). No code article sets out what a distribution agreement is or must contain. What exists instead is a menu of contractual forms, shaped partly by statute, partly by decades of case law, and constrained by a layer of public-order rules that apply regardless of the label the parties choose. Because the forms share so much — the definition of the products, the use of the supplier's trade mark, the territory to prospect, whether exclusivity is granted, the selling obligations, the delivery terms — it is tempting to treat them as interchangeable. They are not: the form determines who bears the commercial risk, who owns the customer relationship, how prices may be set, and what happens when the relationship ends.

This guide maps the forms, isolates the single criterion that distinguishes a distributor from a commercial agent, explains the legal reasons for preferring one contract over another, and sets out the mandatory rules that bind every distribution relationship connected to France.

Is there such a thing as "a distribution contract" in French law?

Not as a named, self-standing contract. French law contains no autonomous definition of the distribution contract (CA Reims, 4 Oct. 2010), and — for most of the forms — no dedicated statutory regime. The provisions that govern these relationships sit in Book IV of the Commercial Code (Articles L 410-1 and following), which regulates freedom of prices and competition, but the shape of the individual contract is largely left to the parties.

That freedom is real but bounded. Two of the forms are imposed by law the moment their factual conditions are met, and cannot be contracted around: the salaried status applies as soon as the intermediary answers the legal definition of a VRP or a salaried branch manager; and the statutory commercial-agent regime of Articles L 134-1 and following applies as soon as the intermediary meets those conditions. The remaining forms — the common-law commercial agent, the commission agent, the concessionaire and the franchisee — are imposed by no provision. Here the parties are free, subject only to ordinary public order, and in particular the rules protecting free competition in distribution and governing purchase exclusivities.

One practical warning follows from this. A given commercial technique — an entry fee, a quota, a stock obligation — should not be assumed to carry a fixed legal meaning simply because it is habitually used with one form of contract. Many such terms are independent of the legal qualification. The qualification is fixed by the substance of the arrangement, not by the name on the cover or by the presence of familiar clauses.

What forms can distribution take in France?

The intermediaries that carry out distribution in France fall into a recognised set of legal figures. They divide first by a fundamental line — whether the intermediary acts in the producer's name or buys and resells in its own name — and then by the presence or absence of exclusivity and selection.

The recognised figures

• The sales representative (VRP) — a salaried status imposed by law wherever its conditions are met.
• The approved distributor of a selective-distribution network.
• The statutory commercial agent, within Articles L 134-1 and following (the "statutory" agent).
• The common-law commercial agent or commercial representative, governed by the ordinary law of mandate — distinguished from the statutory agent above.
• The commission agent (commissionnaire).
• The concessionaire — the exclusive distributor proper.
• The franchisee.

Where the qualification is forced, and where it is free

The salaried status must be applied wherever the intermediary answers the legal definition of a VRP or salaried branch manager; the statutory agent regime imposes itself wherever the conditions of Articles L 134-1 and following are met. Every other regime — common-law agent, commission agent, concession, franchise — is a matter of choice, limited only by ordinary public order.

The approved distributor of a selective network, it should be noted, "buys and resells the products of the network, and in this respect acts as a concessionaire", so that the rules governing the concession contract — notably on termination — are largely transposable to it.

The clauses common to every form

Because all these intermediaries perform the same economic function, the agreements that implement distribution inevitably share a large body of identical clauses — those fixing how the producer supplies the products or services and how the distributor markets them to the target customers. In practice they address: the definition of the products or services to be distributed; the conditions of use of the trade mark protecting them, where relevant; the determination of the territory to prospect; whether or not an exclusivity is granted to the distributor; the prescriptions relating to the selling effort — method of prospection, advertising, sales promotion, sales quotas to meet, the level of stock to build and maintain; and the delivery conditions from producer to distributor. These recurring clauses are largely independent of the legal qualification, which is why their presence does not, by itself, fix the form of the contract.

Distributor or commercial agent — what is the decisive difference?

This is the first fork, and it changes everything downstream. A concessionaire — a distributor proper — is one who acts in its own name and for its own account, taking a firm purchase of the supplier's products which it then resells to its own customers (Cass. com., 13 May 1970; CA Versailles, 6 Nov. 1997). The distributor takes title, takes the stock, takes the credit risk on its customers, and keeps the margin between purchase and resale. A commercial agent, by contrast, does not buy for resale: it negotiates, and where empowered concludes, sales for the principal, in the principal's name. Between the two sits the commission agent (commissionnaire), who contracts in its own name but for the account of the principal — and who, like the agent and unlike the concessionaire, does not take a firm purchase for its own account. The dividing line, in every case, is the firm purchase for resale: it is present in the distributor and absent in the agent and the commission agent.

What does not change the qualification

The distributor's status as a firm buyer for resale is robust. It is not displaced by the fact that the supplier exercises close control over the distributor (Cass. com., 13 May 1970), that the concessionaire enjoys no sales exclusivity (Cass. com., 17 May 1976; Cass. com., 22 May 1967), or that the distributor's margin is very thin. Proof of the firm purchases is, in practice, drawn from the invoices the supplier addresses to the distributor (Cass. com., 17 May 1976; Cass. com., 15 Jan. 1979).

Where it ceases to be a distribution contract

The relationship stops being a concession the moment the supplier itself invoices the customers directly, collects payment from them, and pays the distributor a percentage (CA Versailles, 9 Apr. 1998). At that point the intermediary is no longer buying and reselling on its own account, and the arrangement slides toward agency or commission — with different consequences for customer ownership, price-setting and, above all, end-of-relationship compensation.

The characterisation also carries into private international law: for the purposes of the jurisdiction rules of Regulation (EU) 1215/2012, the concession contract has been treated as a contract for the provision of services — a point that can determine which court hears a cross-border distribution dispute.

Exclusive distribution (concession): what is it?

Exclusivity of distribution is the clause by which the producer recognises that the distributor will be the sole party entitled to sell the products in question over a defined territory. Because the courts assess its existence strictly, it is recommended that the exclusivity be expressly stipulated (Cass. com., 19 Nov. 2002; CA Paris, 8 Sept. 1995): an exclusivity that is merely assumed, rather than written, is fragile.

Underneath the exclusivity sits the concession itself: the concessionaire buys the concédant's products firm and resells them in its own name and for its own account, like a trader. There is no dedicated statutory regime; the concession is governed by the rules the courts have laid down and, for the remainder, by the ordinary law of contract.

What the exclusivity protects against

The holder of an exclusivity clause is protected not only against the supplier appointing a rival on its territory, but also against active sales made into its territory by other distributors supplied by the promoter of those sales. The distinction between active and passive selling matters here: it is an active sale, for example, for a concessionaire operating under a car-equipment banner to organise promotional operations on the car park of a hypermarket situated within the protected territory. Where a contract with these characteristics is concluded — whether with a franchisee or a concessionaire — the protection attaches, and it continues to bind even where a new distributor replaces the original one (Cass. com., 21 Feb. 2012, no. 11-13.653).

Exclusive distribution is treated in depth in its own guide; here it is enough to fix its defining features: a sole distributor, a defined territory, a firm-purchase-for-resale distributor who remains legally independent, and an exclusivity that must be written to be relied upon.

Selective distribution: what is it?

Selective distribution is the arrangement by which a supplier, anxious to preserve the reputation of its products, undertakes to sell the contract goods or services — directly or indirectly — only to distributors selected on the basis of defined criteria, and by which those distributors undertake not to resell outside the network. The approved distributor buys and resells the network's products and, in doing so, acts like a concessionaire, so that much of the concession case law transposes to it.

Selective distribution is expressly integrated into the EU block-exemption regime — Regulation (EU) 2022/720 of 10 May 2022 — and its operation must conform to French and EU competition law. A supplier cannot confer "luxury" status on ordinary goods merely by branding them: a mark is not, of itself, enough to make products eligible for a selective system (CA Paris, 28 Apr. 2000; on appeal, Cass. com., 8 July 2003, no. 00-16.726). But selective distribution has been accepted for cosmetics and skincare products (Cass. com., 21 Oct. 1997) and for Levi Strauss jeans (Cass. com., 11 Jan. 2005, no. 02-10.566). The permitted criteria can extend to protecting the brand's image: a clause in the selective distribution of luxury cosmetics forbidding advertising in favour of discount sales has been upheld, because its object is to prevent the systematic announcement of rebates that harms the products' image and undercuts the advertising the manufacturer undertakes to reinforce their reputation (CA Paris, 30 March 1992).

Protecting the network

A manufacturer can obtain compensation for the loss caused by a third party who participates, directly or indirectly, in a breach of the ban on resale outside the network by a distributor bound by an exempted selective or exclusive agreement. Sales by mere private individuals cannot constitute such a breach (Cass. com., 11 Jan. 2023, no. 21-21.847). An unauthorised reseller is liable where it sourced from an approved distributor forbidden to sell outside the network, and it cannot escape by interposing intermediary shell companies to mask the approved distributor's identity (Cass. com., 27 Oct. 1992). It may, however, exonerate itself by proving the product was lawfully acquired on a parallel network or from another approved distributor (Cass. com., 26 Jan. 1999; Cass. com., 31 March 2015, no. 14-12.272).

Location, online sales and where to sue

The criteria may reach beyond the qualities of the reseller. For a selective network of luxury products, a criterion relating to the location and environment of the point of sale — to avoid such products being sold in places wholly unsuited to their nature and quality — has been accepted, provided its concrete application is neither discriminatory nor disproportionate. On the internet, a ban preventing members of a selective network of luxury goods from using third-party undertakings visibly for their online sales has been held not to be a restriction of customers within the meaning of Article 4(b) of the block-exemption regulation (then Regulation (EU) 330/2010, since replaced by Regulation (EU) 2022/720). And where the breach of a ban on selling outside the network arises from offers made on internet sites operating in several Member States, the action lies before the court of the place where the damage occurred.

The mechanics of the selection criteria and online-sales restrictions are the subject of the dedicated selective-distribution guide.

Exclusive purchase and open (non-exclusive) distribution

Two further configurations complete the picture, defined by where the exclusivity — if any — sits.

Exclusive purchase (the tie)

An exclusive-purchase arrangement binds the distributor to source the contract products only from the supplier. It is a commitment on the buying side, distinct from an exclusivity of sale. French law caps the duration of certain exclusivity commitments: Article L 330-1 of the Commercial Code, from a law of 14 October 1943, limits "to a maximum of ten years the duration of validity of any exclusivity clause by which the purchaser, assignee or lessee of movable goods undertakes, vis-à-vis its seller, assignor or lessor, not to use similar or complementary objects from another supplier." The parties remain free, at the end of the ten years, to conclude a fresh exclusive-purchase contract for a further period not exceeding ten years, or for an indefinite term.

There is, however, an important limit on the reach of that cap. The doctrine has long stressed that Articles L 330-1 and L 330-2 cannot govern exclusive-purchase contracts in the distribution sector, because their object was to limit the duration of relationships for the purchase of materials — goods intended to be used by the buyer, not resold — the text speaking of the "use of similar or complementary objects". The application of the ten-year cap to a purchase-for-resale distribution tie is therefore contested, and such ties are tested principally under competition law. This is developed in the exclusive-purchase guide.

Where the cap does apply, the sanction for an exclusive-purchase commitment agreed for, or performed over, more than ten years is itself uncertain: the courts sometimes annul the clause fixing the excessive duration, sometimes annul the contract that contains it, and sometimes declare the clause or contract lapsed — but the tendency of the case law is rather to reduce the duration of the commitment to the legal maximum rather than to strike it down entirely.

Open, non-exclusive distribution

Where no exclusivity is granted in either direction, the arrangement is an open distribution: the distributor buys firm and resells, but the supplier remains free to appoint others and the distributor remains free to handle competing lines. The absence of a sales exclusivity does not, on its own, alter the distributor's qualification as a concessionaire (Cass. com., 17 May 1976).

How do you choose between them?

The choice is driven less by commerce than by law. As the source authorities put it bluntly, there is no commercial reason to prefer a concessionaire over a commercial agent or a commission agent, because the same distribution techniques can be written into a concession contract as into an agency. The reasons to opt for one form over another are legal, and turn on the following consequences.

• The concessionaire must buy the products firm; it therefore sells in its own name and for its own account, as a trader — taking the title, the stock and the customer risk.
• The concédant cannot impose conditions that fall foul of the prohibition on anti-competitive agreements — the competition-law ceiling applies whatever the label.
• A fixed-term concession expires at its term, and the concédant may in principle refuse renewal at its discretion, subject to observing any customary notice.
• An indefinite-term concession may be unilaterally terminated by the concédant, subject to no abuse — in particular, no abruptness — in the manner of doing so.

The same logic explains the relationship between concession and franchise. The "franchise" technique can be used in full within a concession contract; a franchise in which the franchisee buys firm and resells in its own name and for its own account is, in truth, only a concession under another name — the firm purchase for resale being the determining criterion of the concession. It is possible to protect the network and to subject the distributor to special restrictions not because the contract is a franchise, but because it comprises a set of services from the supplier that justify them. On the same footing, nothing would even prevent a concédant from requiring an entry fee from its concessionaires, provided the services it supplies justify it — the entitlement flows from the value delivered, not from the name given to the contract.

Which distribution contract fits your plan?

This orientation aid, drawn from the legal distinctions above, points to the form indicated by how you want to sell in France. It is not legal advice — the qualification ultimately turns on the substance of the arrangement. It weighs four questions: whether the intermediary should buy and resell in its own name and for its own account (taking title and risk) or act in your name so you keep the customers; whether you want a single distributor per territory or may appoint several; whether you need to control who resells on defined quality criteria or leave the resale channel open; and whether you want to tie the distributor to source only from you or leave it free to source elsewhere.

A firm purchase for resale in the intermediary's own name is the criterion that makes the relationship a distribution contract rather than an agency. Exclusivity of sale, selection of resellers and an exclusive-purchase tie are separate features that can be combined. Indicative only.

Which rules apply whatever form you choose?

Contractual freedom in distribution runs into a fixed public-order floor. Articles L 440-1 to L 444-8 of the Commercial Code, which frame commercial practices, apply to any agreement between a supplier and a buyer concerning products or services marketed on French territory, and are of public order (Art. L 444-1 A). The label on the contract does not switch them off. The assessment of commercial practices may be submitted to the Commercial Practices Examination Commission (commission d'examen des pratiques commerciales, Art. L 440-1), though the power to refer a matter to it is left to the discretionary appreciation of the trial judges (Cass. com., 15 Nov. 2023, no. 22-10.818). Four bodies of rule matter to every distribution relationship.

Transparency of commercial relations

General terms of sale (CGV) must be in writing and include the payment terms and the elements determining the price — the schedule of unit prices and any reductions — and must be communicated to any professional buyer who requests them. A seller remains free, absent abuse of right, not to sell; but once it enters commercial negotiation with an operator, it must do so on the basis of its terms of sale (Cass. com., 28 Sept. 2022, no. 19-19.768). The relationship must, in the cases the law specifies, be formalised in a written "single agreement" (convention unique) under Articles L 441-3 and following, and every professional purchase or service is invoiced under Article L 441-9, with payment within the periods fixed by Articles L 441-10 and following.

Abusive practices between businesses

Articles L 442-1 and following prohibit a set of practices that recur in distribution: obtaining an advantage that has no consideration or is manifestly disproportionate to it (Art. L 442-1, I, 1°); subjecting a partner to a significant imbalance (Art. L 442-1, I, 2°); the abrupt termination of an established commercial relationship (Art. L 442-1, II); and imposing discriminatory prices, payment periods or conditions not justified by real consideration. These are treated in detail in our fair-trading guides. The same body of rules also renders void the clauses or contracts that would allow certain unjustified advantages (Art. L 442-3), and it sanctions a failure to conduct the commercial negotiations in good faith where that failure results in no contract being concluded by the statutory deadline of 1 March (Art. L 441-3).

Freedom of prices

Prices are, in principle, freely set by competition (Art. L 410-2). The restrictions on that freedom bear directly on distribution: resale at a loss (Art. L 442-5) and imposed resale prices (Art. L 442-6) are prohibited; buying agricultural or food products at an abusively low price engages liability (Art. L 442-7); and the artificial raising or lowering of prices is criminally sanctioned (Art. L 442-9).

Logistics penalties

A written agreement between supplier and distributor, distinct from the single agreement, may fix — within a ceiling — the penalties imposed on the supplier for failing to meet contractual commitments such as late or non-compliant delivery (Art. L 441-17); and the supplier may likewise impose capped penalties on a distributor that fails to perform (Art. L 441-18).

Do you need a written contract — and what must be written?

There is no statutory form for the distribution contract as such, and no rule that a concession must be reduced to a single signed instrument. But several written elements are either required by the public-order rules or strongly advisable to secure the qualification and the protections.

• The general terms of sale must be written, and communicated to any professional buyer who asks (Art. L 441-1 framework, above).
• The single agreement (convention unique) must be concluded in writing in the cases the law specifies (Arts. L 441-3 and following).
• Any exclusivity of distribution must be expressly stipulated — the courts assess its existence strictly, and an unwritten exclusivity is precarious (Cass. com., 19 Nov. 2002).
• The firm purchases that qualify the relationship as a concession are proved, in practice, from the supplier's invoices to the distributor (Cass. com., 17 May 1976).

In short: the relationship can exist without a bespoke "distribution contract", but the features that matter most — the exclusivity, the selection criteria, the purchase tie, the price and payment terms — should be captured in writing, both to satisfy the mandatory transparency rules and to make the qualification and the protections provable if the relationship is ever tested.

How do these relationships end — and why the form matters at the exit?

The form you choose shapes not only the life of the relationship but its close, and this is where the legal — as opposed to commercial — consequences bite hardest. For the concession, no statutory regime governs the point: the concession obeys the rules specially laid down by the courts and, for the remainder, the ordinary law of contract.

Two situations recur. A fixed-term concession expires at its term, and the concédant may in principle refuse to renew it at its discretion, subject to observing any customary period of notice. An indefinite-term concession may be terminated unilaterally by the concédant, subject to there being no abuse — and, in particular, no abruptness (brusquerie) — in the manner of the termination.

That last reservation is the doorway to the most consequential exposure in French distribution: the prohibition on the abrupt termination of an established commercial relationship (Article L 442-1, II), under which a party that ends a stable relationship without sufficient written notice answers in damages for the margin lost over the notice that should have been given. A distribution relationship, whatever its label, is precisely the kind of established commercial relationship that rule protects. How the exit is handled — notice, non-renewal, leftover stock, any post-term restraint — is treated in the dedicated guide on ending a distribution agreement, and the abrupt-termination claim in its own flagship guide.