French Commercial code
In forceI.-The contract may provide for penalties to be imposed on the supplier in the event of non-performance of contractual commitments. It must allow for a sufficient margin of error in relation to the volume of deliveries provided for in the contract. Sufficient time must be allowed to inform the other party in the event of a contingency.
The penalties imposed on the supplier by the distributor are proportionate to the damage suffered with regard to the non-fulfilment of contractual commitments, up to a ceiling equivalent to 2% of the value of the products ordered falling within the product category within which the non-fulfilment of contractual commitments has been noted.
No logistics penalty may be imposed for non-performance of contractual commitments that occurred more than one year previously.
It is forbidden to refuse or return goods, except in the event of their non-conformity or failure to meet the delivery date.
When the distributor, in accordance with the first paragraph of this I, sends the supplier a logistics penalty notice due to a breach of a contractual commitment, it shall at the same time provide proof, by any means, of the breach noted and of the loss suffered. The supplier has a reasonable period of time in which to verify and, if necessary, contest the reality of the corresponding grievance.
It is forbidden to automatically deduct from the amount of the invoice drawn up by the supplier the penalties or discounts corresponding to non-compliance with a contractual commitment.
Only situations that have resulted in stock-outs may justify the application of logistics penalties. By way of derogation, the distributor may impose logistics penalties in other cases as long as it demonstrates and documents in writing the existence of a loss.
When considering the imposition of logistics penalties, account will be taken of circumstances beyond the control of the parties. In the event of force majeure, no logistics penalties may be imposed.
II.-The distributor may not require the supplier to pay the penalties referred to in this article within a period that is shorter than the payment period it applies from receipt of the goods.
III.-In the event of an exceptional situation, external to the distributors and suppliers, seriously affecting the supply chains in one or more sectors, the application of the logistics penalties provided for in the contracts concluded pursuant to this title between the distributors and the supplier or suppliers operating in these sectors and affected by the said situation may be suspended by decree of the Conseil d'Etat, for a maximum renewable period of six months.
IV.-This article does not apply to commercial relations with wholesalers within the meaning of II of article L. 441-4.
