France
- Commercial agency in France is governed primarily by the French Commercial Code, Articles L.134 1 et seq. and R.134 1 et seq., which implement Directive 86/653/EEC.
General rules of contract and representation under the French Civil Code apply insofar as they are compatible with this special statutory regime.
- A commercial agent is an agent who carries out their activities “as an independent professional” according to Article L. 134-1 of the Commercial Code. Consequently, if they are registered in the commercial agents’ registry, they are presumed not to be an employee under Article L. 8221-6 of the Labor Code.
Collective bargaining agreements do not apply directly to self-employed workers and do not cover the activities of commercial agents.
- Article L. 134-12 of the French Commercial Code provides that termination of the contract entitles the commercial agent to compensatory damages for the loss suffered due to
- Termination of an open ended contract by the principal
- Non renewal of a fixed term contract where the agent has contributed to developing the principal’s business.
The law provides limited exceptions (interpreted strictly by French courts) where the agent loses the right to indemnity (essentially mirroring Article 18 of Directive 86/653) : - Serious fault of the agent justifying immediate termination
- Termination by the agent without justified reason
- Transfer of the contract with the principal’s agreement
According to French case law and doctrine, the indemnity –of public policy– is often assessed at around two years of gross commissions, calculated on the basis of the average annual commissions earned by the agent over the last years of the relationship. The amount may be adjusted up or down depending on the circumstances (length of relationship, growth of business, investments, age of the agent, difficulty to find new mandates, etc.).
- Article L. 134-12, paragraph 2, of the Commercial Code provides for a one-year period within which the agent must notify the principal of his/her right to compensation as of the effective termination of the contractual relationship. If one year passes without clear notification to the principal, the right to indemnity is permanently forfeited.
The agent may still, if applicable, bring a claim against the principal on another legal basis (contractual liability, commissions due, etc.), subject to the statutes of limitations applicable to such claims.
- Mrs. Anne Bourdu (anne.bourdu@lext.fr) and Sylvain Beaumont (sylvain.beaumont@lext.fr)
