The decision is usually taken quickly and for sound reasons. The distributor stopped growing, it took on a competing product, you decided to go direct, the margin no longer works. The mail goes out, politely, and in France that mail can be the whole case. French commercial law makes the abrupt termination of an established commercial relationship a liability in its own right — independent of whether you breached a contract, and independent of whether a contract ever existed.
What French law treats as an established commercial relationship
What is protected is not a contract but a flow of business that was regular, significant and stable enough that the partner could legitimately expect it to continue. Successive orders over a long period, a framework renewed without anyone thinking about it, a distribution that ran for years on invoices and habit: all of that counts, and the absence of a signed document is no defence — it is closer to an aggravating fact, since nothing records what either side could expect. What falls outside is a one-off deal, a relationship always presented and understood as a trial, or a flow so irregular that no expectation could be built on it.
What sets the notice you actually owe
- The length and the steadiness of the relationship. The main factor, and the one you can no longer influence at the end. A long, regular relationship calls for a long notice, and the arithmetic of the past orders is in the other side's accounts as much as in yours.
- The partner's economic dependence. A distributor for which you are most of its turnover needs far more time to replace you than one for which you are a line in a catalogue, and a dependence you encouraged weighs more than one it chose.
- The investments it made for you. Dedicated stock, a showroom, hires, tooling, a certification taken out for your product, a team trained on your range. Investments specific to you weigh heavily; generic ones much less, because they can be redeployed.
- How long the product takes to replace. A technical or regulated product, listed slowly by the partner's own customers, takes longer to substitute than a commodity, and the notice follows the time the partner needs to find an equivalent.
- What the contract says, as a floor and not as a ceiling. A contractual notice shorter than what the relationship justifies does not protect you; the judge compares it with what was due and awards the difference. A longer one does bind you, which is worth remembering when drafting.
- The practice of the sector. Where a sector has an established practice, or where an interprofessional agreement sets notice for that kind of relationship, it is taken into account. Ask what the practice is in your sector in France rather than reasoning from your own experience elsewhere.
What an effective notice looks like
The notice has to be written, unambiguous, dated and sent to the right legal entity, and it runs from the day it is received rather than the day it was decided. Through it, the relationship continues on the terms that existed before: the same prices, the same lead times, the same access to the range, the same volumes available if the partner orders them. A notice served while orders are refused, lead times stretch, prices rise, the range narrows or the territory is quietly handed to a successor is not a notice. A court will treat the relationship as having been broken on the day the conditions changed, and the notice you thought you had given will count for nothing.
What gets compensated is narrower than most people fear and different from what they expect. It is not the loss of the business, not the investments as such, not the value of the clientele: it is the margin the partner would have earned during the notice that should have been given, less the notice actually given. The measure is built from the past flow — a gross margin over the missing period, reconstructed from the partner's own accounts. Which has a blunt practical consequence: the way to reduce the exposure is to give the notice, because the only thing you can still choose at that point is how much of the missing period remains missing.
Why this is not the indemnity owed to a commercial agent
These are separate rules for separate statuses, and confusing them produces the wrong provision in the accounts. A commercial agent — an independent intermediary who negotiates, and sometimes concludes, in your name and on your behalf — holds a protected position at the end of the contract: a right to compensation for the clientele it developed, which exists in principle even when the contract simply came to its term and even when you ended it without any fault on its part. That entitlement comes from European legislation on agency, transposed in every member state, and its details differ from one to another. Abrupt-termination liability is something else entirely: a general rule of French commercial law, open to distributors, suppliers, subcontractors and service providers, which compensates a missing notice rather than a lost clientele.
The traps sit in the qualification rather than in the rules. An intermediary called an agent that buys the goods and resells them on its own account is not an agent, whatever the contract is titled. A distributor that in practice only takes orders in your name, at your prices, without carrying the stock or the risk, may be treated as one. And the same relationship can generate both exposures if it changed character over the years without anyone rewriting the paper. The question to settle, before you terminate anything, is what the relationship actually is — which is answered by who bought, who owned the stock, who bore the unpaid invoices and whose name was on the order, not by the heading of the document.
What lets you end it without notice, and what has to be on paper
- A sufficiently serious breach by the other side. Non-payment, a serious breach of exclusivity, counterfeiting, a breach of a compliance or safety obligation. Seriousness is assessed by the judge against the whole relationship, not by you in the moment, and a breach is far more convincing when it was raised when it happened.
- Force majeure. Read narrowly, and rarely the answer to a commercial difficulty. A market that turned, a cost that rose or a decision taken in your own group is not force majeure.
- A reaction that was contemporaneous. A failing tolerated for a long time and then invoked at the end persuades nobody: prolonged tolerance is read as acceptance, and the partner will produce the orders you kept placing afterwards.
- Formal notices written at the time. A mail saying what happened, when, what you are asking for and by when, with proof of receipt. The habit matters more than the elegance of the wording, and it is the habit that is missing in almost every file.
- A file built as events happen. Late payments, returns, failed audits, unanswered complaints, missed targets, gathered as they occur. A file assembled in the week you decided to leave is dated by its own folder, and the other side will say so.
- And the notice given anyway, wherever there is doubt. It costs the margin of the period you concede. The alternative costs the margin of the period a judge decides was due, plus the proceedings, plus the years during which the provision sits in your accounts.
Write the termination before you need it, in the sense that matters: the day a distributor starts underperforming, open a file and send the mail that says so, with the request and the deadline. Then, when the decision comes, notify in writing, give a notice longer than the contract if the relationship was long, and hold every condition unchanged until the last day — no squeezed allocations, no new distributor prospecting the territory, no price change. Have the notice and its length checked by a French lawyer before it goes out: the assessment depends on facts that are specific to your relationship, and the mail you send is the document the whole case will turn on.