The termination of an established commercial relationship is governed by article L442-1 II of the French Commercial Code. This article stipulates that any sudden termination, even partial, without prior written notice, taking into account the duration of the commercial relationship, gives rise to liability on the part of the perpetrator, who is obliged to compensate for the damage caused. This was reiterated by the French Supreme Court in a ruling handed down on June 28.
Taking into account the nature and duration of the commercial relationship
In this case, an editorial communications agency had provided services to three companies. It had published and delivered several magazines to them over a period of almost 4 years. After these years of collaboration, the companies informed the agency of their wish to entrust a third party with the provision of the services, and the agency requested the benefit of the notice period provided for in the general terms and conditions of sale.
The general terms and conditions of sale on quotations and invoices included a termination clause stating that " the customer may not terminate its business relationship with the company without at least 6 months' written notice by registered mail with acknowledgement of receipt ".
Criticizing the companies for having terminated the relationship without respecting the contractual notice period, the editorial communications agency sued for damages.
The Court of Appeal, hearing the case, initially set at one month the notice period that should have been respected by the companies having expressed their wish to terminate the contract, given the nature and duration of the commercial relationship they had with the advertising agency.
The period of notice cannot be less than that stipulated in the contract
Dissatisfied with the Paris Court of Appeal's ruling of April 22, 2022, the agency appealed to the French Supreme Court. In a decision dated June 28, 2023, the French Supreme Court ruled in favor of the agency, criticizing the Court of Appeal for failing to set a notice period equal to or greater than that stipulated in the contract. Indeed, when judges are called upon to assess the length of a notice period in the event of termination of an established commercial relationship, they may consider that the period stipulated in the contract is sufficient, or they may grant a longer period in view of the nature of the commercial relationship maintained by the parties (volume of business, exclusivity obligation, economic dependence, etc.) and its duration. Trade practices and inter-professional agreements may be taken into account when agreeing on a minimum notice period.
Thus, in all cases, judges cannot impose a shorter notice period than that stipulated in the contract. In this case, the companies that had abruptly terminated their business relationship with the editorial communications agency were therefore ordered to pay the agency a total of 3,000 euros underarticle 700 of the French Code of Civil Procedure.