Practical note · Mehdi El Jamali · Paris Bar lawyer
This note addresses the French and European distribution framework. EU competition law depends, in particular, on effects on trade between Member States and competition in the internal market, not solely on where the parties are established.
Your company wants to accelerate its development. A distributor offers to market your products in a territory, a partner wants to open several outlets, or your team is considering direct sales alongside a reseller network.
Before using a contract template, describe the project. Commercial decisions will provide a framework for legal analysis and negotiation.
Clarify each partner’s role
This note primarily concerns resellers who purchase and resell products. If the partner negotiates or concludes sales on your behalf, have its role assessed before using a distribution agreement: the commercial agency framework must then be considered.
Which customers should the partner reach? In which territories and through which channels? Which sales will your company continue to make directly? These questions become concrete when several partners, an online store and a sales team approach the same customers.
Suppose a distributor requests exclusivity to support its investment. Before discussing the clause, clarify its plans, resources and your expectations. The proposed arrangements and their legal implications can then be examined.
Exclusivity does not automatically close a territory. A distributor may ask to be the only one in an area. That does not mean you can prohibit every sale by other partners into that area. European rules distinguish targeted sales efforts from unsolicited requests; permitted restrictions depend on the network and applicable exceptions.
Describe day-to-day operations
Orders, supply, stock, training, after-sales service and brand presentation: prepare the agreement with the people who will operate the relationship. Which tasks fall to the partner? What resources must your company provide?
Unclear expectations can emerge within the first months. A partner may expect more commercial support while your team assumes it already has the necessary resources. Discuss these assumptions before negotiating.
A recommended price must remain a recommendation. Under the European framework, imposing a fixed or minimum resale price removes the agreement’s benefit of the block exemption. A “recommended” or “maximum” price must not have the same effect through pressure or incentives. Examine practices too: conditional discounts, threats or control over promotions may require review. The clause’s label is not decisive.
Anticipate changes to the network
The network may expand, a partner may change strategy or results may differ from expectations. Define the information needed for monitoring and when the relationship will be reviewed.
Before changing an existing relationship or considering its termination, have the agreements and circumstances examined. The relationship’s duration, exchanges between the parties and investments made may be relevant.
Coordinate commercial and legal decisions
Competition, exclusivity, online sales and use of the brand require analysis suited to the model. Describe the project, markets and existing relationships to prepare that analysis.
For international development, define the French-law scope and matters requiring local counsel. Coordinated advice helps prepare negotiations and maintain a coherent view without assuming identical rules apply everywhere.
Reducing orders can also create risk. Under French law, an abrupt termination may be partial. A substantial reduction in orders during contract negotiations may also give rise to liability where it undermines an established commercial relationship under the statutory conditions. Review written notice and the circumstances of the reduction, rather than relying solely on the contract’s end date. Termination without notice for non-performance or force majeure requires separate assessment.