SECOND PART: DISTRIBUTION LAW

PLAN
GENERAL INTRODUCTION
I. The sales agents ................................................................................................ 2
II. The courtiers
III. The commission agents..................................................................................................... 3
IV. The centralpurchaseand of referencingt ...................................................................... 3
CHAPTER 1: THE EXCLUSIVE CONCESSION CONTRACTE ....................................... 6
Section 1: The conclusion of the concession contract.................................................................. 6
Section 2 : Theexecution of the exclusive concession contracte..................................................... 7
§ 1: The obligations of the grantor ........................................................................................ 7
§ 2: The obligations the dealer .............................................................................. 8
§ 3: Concession contracts and third parties.......................................................................... 9
Section 3: The expiration of the contract........................................................................................... 10

CHAPTER 2 THE FRANCHISE CONTRACTE .12

Section 1: The relations between the parties ................................................................................ 13
§ 1: The formation of the franchise contract............................................................... 13
The executionthe oppositet ................................................................................................. 14
§ 3 :The expirationof the contract ................................................................................................ 15
Section 2: The parties' relationships with third parties.................................................. 15
§ 1: Consumers...................................................................................................... 15
§ 2: The suppliers ........................................................................................................... 16
§ 3 : The other members of the network
§ 4: External merchants to the network......................................................................... 16
CHAPTER 3: SELECTIVE DISTRIBUTION CONTRACTS.............................. 18
Section 1: The Principle of Validity ....................................................................................... 18
Section 2: The implementation of the principle20

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 GENERAL INTRODUCTION

One of the most remarkable developments in business life is the establishment of

network. Since companies have recognized the necessity of sales in relation to
production, distribution circuits have developed. The isolated retailer tends to
disappear in favor of integration into marketing networks. The
Sellers are now striving to apply the strategy defined by a few leaders,
benefiting from a favorable image supported by intense and persuasive advertising.
suppliers and distributors indeed work with the merchants they
select. This distribution technique is called integrated distribution. It
offers many advantages. Example: The creator of the network can sell the
products or services under its brand and throughout the territory. The members of the network
also have the possibility to distribute branded products.
There are also dangers. For example, a concentration or integration that is too strong.
is likely to limit competition. It can also lead to an imbalance of
contracts. The establishment of a network occurs through the conclusion of various contracts binding
the suppliers to the distributors.
Often, the parties organize their relationships on the basis of framework agreements (of which the
clauses are well-defined, or there is no ambiguity) that allow them to define the
essential elements of their contributions, without having to set the concrete modalities.
The essential obligation of the framework contract is the conclusion of the application contracts, which ...

are integrated distribution contracts. We also have cooperation contracts.

commercial. This is a contractual contribution between a supplier and a distributor who,
as part of their respective policies, decide to join forces to increase
their commercial effectiveness
Example: advertising operations or the promotion of a product.
The commercial cooperation contract must be made in writing. The supplier must ...
special remuneration. Distribution contracts are always preceded by a phase
preliminary where intermediaries come into play.

I. Commercial agents
They are agents responsible for prospecting clients on behalf of

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 merchant. The profession of commercial agent is of a civil nature. The commercial agent
has the right to a commission fixed contractually. He also has a right of follow-up on the
clientele, that is to say that until the expiration of the commercial agent contract, his clientele

he belongs.

II. The brokers

They are independent merchants who connect two people.
wishing to relax. The broker does not conclude the contract for one of them, he is not
a representative. He operates in specialized sectors. For example: Insurance broker, in
transit and in matrimonial matters.

III. The commission agents

They contract on behalf of others. Unlike commercial agents, they do not
they do not disclose the name of their principal. They work in their own name on behalf of
their principal. The contractor has no action against the principal for this action.
do not ignore the name. The rules of the mandate govern the relationship between the principal and
the agent. Some agents must guarantee the proper execution of
contract, assuming for example the risks of insolvency of the counterparty.

IV. Purchasing and referencing centers

These are structures specific to large retail outlets. The purchase centers aim to
to buy for the account of an uncertain number of agents.
The referral centers are tasked with selecting suppliers and
products.
Distribution contracts between professionals are very varied, but they have rules.
communes. All these contracts are justified by integrated distribution. Integration is
a way for the supplier to control its sales products. Legally this
control is ensured by a series of clauses. For example: quota clauses that establish the
number of products to order; the market penetration clauses that set the
number of products to sell. It is true that distribution contracts imply a
economic dependence of distributors on suppliers, but these contracts
they share a common interest for both parties.
Thus in distribution contracts, both parties have rights over the
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common clientele. Distribution contracts often include a clause
of exclusivity. By this clause, the distributor agrees to contract only with such or
Supplier. They are required to source from only one manufacturer. On their side
the supplier or manufacturer may commit to only dealing with such and such
distributor. Exclusivity can be the supply of supplies or even
reciprocally. The exclusivity clause translates into various obligations and leads to
a restriction on the freedom to choose one's contracting party. It has 2 aspects:
It aims to intensify trade relations between the parties, but at the same time
temp prevents the debtor from engaging in business relationships with
The exclusivity clause was regulated by the law of October 14, 1943, which it
limited to a maximum of 10 years for its validity. The law has also considered the clauses

of chains, deciding that if a contract contains an exclusivity clause

follow-up between the same parties, and other similar commitments related to the same
Goods of this kind contain exclusivity clauses, which expire on the same date.
that which is mentioned in 1hecontract.
Distribution contracts pose problems in civil law, particularly regarding the
determination of the price. We wonder if the distribution contract is valid when the
the price of supplies is not set objectively and depends more or less on it.
will expressed by the supplier. If the contract only involves an obligation to do,
that is to say if it is only a preparatory contract for future orders, it is valid
(art. 1129 Civil Code)
In this case, this article does not apply. However, if the contract concerns the
delivery of products, the JP requires that their price be at least determined if not
determined by reference elements, external to the parties.
As for the expert clauses, they allow a third party the possibility to determine the
price. These clauses are certainly lawful, but are not always practicable. The courts
impose equally on the parties to provide from the outset the elements of determination
of the price. They cannot make the determination of the price subject to a later agreement. The
Price fixation elements must be known at the conclusion of the contract.
In terms of commercial law, distribution contracts cannot take place
between merchants. They are subject to all commercial law rules.
Distribution contracts are essentially of three types: contracts of

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exclusive concession, franchise, and selective distribution.

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 CHAPTER 1: THE EXCLUSIVE LICENSE CONTRACT

It is the one by which the holder of a trademark called the licensor, commits to a
given territory, to be sold only to its co-contractor or concessionaire, which
is obliged to distribute the granted goods, and only these goods,
while respecting the commercial policy defined by its partner. For example: The case of
SARI and Peugeot.
The concession is very common regarding mass products. For example: beer,
the automobile, agricultural equipment, and tools.
It allows manufacturers to sell their goods under good conditions and to
monitor the distribution through their networks. The concession contract is close to
sales contract but does not equate to a sale as it guarantees in a territory, for a
fixed term, the exclusivity of the distribution of the products of the grantor by a
dealer in the name and on behalf of him.
The concession contract is also different from the mandate. The concessionaire acts in
risks and dangers. He is a legally independent merchant who buys and
sells for his own account. He does not represent the grantor so much that the latter
is not obliged to speak about the faults and actions of its contractor. The concession contract
is not subject to any specific regulation. For some, the common law of
obligations and case law are sufficient to regulate the concession.
However, in the face of certain practices and arguments, an intervention
Legislation has been deemed necessary. Thus, it is important to consider competition laws.
In French law, there is regulation 1983-83 of June 22, 1983 on agreements of
exclusive distribution, regulation 1984-83 of June 22, 1983 on purchase agreements
exclusive, and Regulation 123-85 of December 12, 1984 on distribution agreements
of motor vehicles. Finally, it is necessary to add the French law of December 31, 1989.
which imposes an obligation of information on the grantor.
The study of the exclusive concession contract will focus on the conclusion, execution, and
end of this contract.

Section 1: The conclusion of the concession contract

It is a consensual contract formed by the mere exchange of consents. Its
the evidence is free since it involves merchants. The parties to the contract can
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 however, to draft a document to establish the main clauses of their agreement. This document
also allows to clearly inform the dealer.
In France, the law of December 31, 1989, in its article 1errequires the grantor to provide
before the contract is signed by the concessionaire, a document providing the information
sincere, which allows him to commit with full knowledge. This information relates
on the seniority and experience of the company, the state and the prospects of
development of the concerned market, the importance of the operating network, the duration,
the conditions for renewal, termination, and assignment of the contract as well as the
field of exclusivities. Failing that, one could think that the dealer can ask for
the nullity of the contract and, where applicable, damages. The information must be
provided to the dealer at least 20 days before signing the contract for him
allow to give informed consent.
The exclusivity of supply contained in the concession contract leads to the
supplier to refuse to contract with merchants outside the network
distribution. In this situation, can we not say that there is a refusal of sale occurring
On the basis of the ordinance of June 30, 1945, article 35, first?
The JP decides that the refusal is justified because any concession contract contributes to
improve the service provided to consumers. In addition, the concession contract responds
to an economic progress requirement when it allows members of
network to have a certain competition. As a result, a grantor cannot
refuse to contract when it is up to him to establish that his contract is not illegal.
regarding competition law (which encourages business freedom).

Section 2: The execution of the exclusive concession contract

It imposes numerous obligations on the parties that originate from the
sale, of the collaboration that the contractors have promised each other and of the exclusivity that they

must.

§ 1: The obligations of the grantor

The grantor must supply the products according to the terms provided in the contract;
He must respect the exclusive areas and therefore contract in the considered sector.
with their dealer;

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 He must not compete with the dealer in the sales area assigned to him.
granted;
He must not sell his products directly, nor entrust their distribution to a.
reseller other than the designated dealer for a specific sector. If not,
the grantor and the reseller engage their responsibility and must repair the damage
commercial and moral resulting from their fraudulent agreement. If the grantor does not provide
the products as planned, the dealer may obtain damages
interests. He can also request enforced execution. If the products are not
competitive, the grantor cannot be held responsible because the contract of
concession assumes that both parties have understood and accepted a risk
commercial. For the JP, the grantor cannot be held liable for compensation for a
absence of results relating to the randomness of business and especially to the decline of
market in which he has no part;
The grantor must forward to the grantee all requests that he ...
would arrive at the concession sector so that the concessionaire deals with it himself
interested persons;
The granting party also promises to assist its co-contractor and this assistance can be
either technical, e.g., supply of parts, materials, advice; or commercial, e.g.:
organization of an advertising campaign followed by management; either financial when the
The investments required for product distribution are significant;
The grantor grants the licensee the use of the product brand.

§ 2: The obligations of the concessionaire

They are heavier than those that weigh on the grantor. The concession contract
certainly ensures some security for the dealer, but at the same time confines it.
in a situation of economic dependence:
The dealer must acquire the granted products while respecting the quota clause.
included in the concession contract;
The contract often specifies that the dealer is required to establish the stocks and
to keep them for customer needs, and this to avoid being out of stock,
to avoid losing customers and to prevent the concessionaire from losing the market;
He must buy the products at the agreed price and resell them according to the instructions of
is granting. However, the grantor cannot impose a resale price but he

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 can advise one (art.34 ordinance 1erDec. 1986

The dealer must also do everything necessary to preserve the unity of

network and defend the image of the granted brand. E.g.: Bouaké Network, Network
Abidjan, each network cannot encroach on the prerogatives of the other. It obliges itself
thus to follow the commercial policy established by the grantor, to respect its
sales methods and to arrange the sales areas in such a way that the clientele
sit at home and remain loyal, and finally to train her staff so that they stay.
always competent and ensuring quality after-sales service. Indeed the
dealer, as an independent trader and reseller, must be accountable for the
warranty against hidden defects. But the customer retains direct action against the manufacturer;
The dealer must not disclose technical and commercial information.
financiers who might interest a competing company. To do this, the contract of
the concession includes severe penalty clauses or resolutory clauses;
The dealer must respect their sales area. They must refrain from manufacturing a
active sales policy in sectors where he does not have exclusivity;
The dealer must not compete with its grantor, it is failing in its obligation.
of loyalty and engages its contractual responsibility as soon as it realizes
operations outside its area. In this case, the grantor, based on
The exception of non-performance may refuse to deliver products to it or proceed with sales.
Finally, it is considered that the dealer will be guilty of an offense.
delictual for which he must answer on the basis of Article 1382, when he does in
knowledge of cause, of intrusions into the areas granted to others
members of the network.

§ 3: Concession contracts and third parties

Until recently, case law accepted that the fact for a third party to ignore in
knowledge of cause an exclusive concession contract constituted an act of
unfair competition likely to engage liability based on
Article 1382. Indeed, the exclusive concession contract is enforceable against third parties.
Certainly, the concession contract cannot create any obligations towards third parties,
but they must respect it and take for granted the rights that resulted from it
for the parties. But this JP resulted in market segmentation and restricted the
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 free competition. It has been criticized and the Court of Cassation has made a
jurisprudential renewal. From now on, judges prioritize the law of
agreement on the exclusive concession contract.
Section 3: The expiration of the contract
She raises the issue of the fate of the stocks. Is the grantor obliged to take back the stock?
products granted when the dealer leaves the network?
In principle, the dealer is the owner of his products, so he is responsible for them.
Or, if he keeps the products and decides to sell them after the end of the concession contract,
the courts decide that he will be guilty of unfair competition towards the ex
grantor. Generally, the problem is resolved by a specific agreement of the
contracting parties. In the absence of clauses, the courts could not condemn the grantor.
to resume stock except as a penalty in kind in the event of a breach
brutal and unjustified termination of the contract. The JP is hesitant to condemn the grantor when he evicts.

the network dealer. The solution in this area has evolved.

Traditionally, case law has distinguished between fixed-term contracts and permanent contracts.
indefinite duration.
If it is a fixed-term contract, it must be carried out to its conclusion and according to the agreed terms. No

the party has an obligation to renew it. The grantor who does not renew the contract
does not incur liability, unless he establishes that he had made such a commitment
renewal of the contract or if he abused his powers. For the JP, the grantor
in a exclusive concession contract, concluded for a fixed term, may
terminate this agreement before its expiration without having to justify its decision
to put an end to.
If it is a permanent contract, the parties can terminate it unilaterally, but they do not
must not commit an abuse of rights. It is up to the victim party of the breach
to report the evidence of the abuse of rights.

These case law solutions put the concessionaire in a delicate position,

favors the grantor. Recent case law and certain texts are trying to soften
these traditional solutions. It engages the will to impose on the grantor
justification of these acts.
When the contract is of indefinite duration, case law considers that there is an abuse of rights as soon as

the termination of the concession contract occurs abruptly. It requires notice.

of a sufficient duration that takes into account the length of the relationships that have existed between
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the parties and the specificity of the activities in question.

When the contract is for a fixed term, the existence of a reason for non
renewal is not, for the JP, a condition of validity of the decision.
However, this existence reinforces the validity of principle by excluding it
afterwards a characterized abuse either by an intention to harm or by a diversion
of the right to the rupture of its purpose.
The reasons for non-renewal are therefore implicitly sought after and their absence
generally justifies the existence of an abuse of rights. The concessionaire can obtain
compensation if he proves that the grantor invoked grounds for termination or
non-renewals that were illegitimate. In France, this issue has been the subject of
certain texts. Ex: Article 36 of the ordinance of 1erDec. 1986 which incriminates the refusal of
sale between professionals; art. 81erand 2eof the order of 1heDec. 1986 who represses
the act for a company or a group of companies to abusively exploit the state of
economic dependency in which a client company finds itself in relation to it that does not
does not dispose of equivalent solutions; article 7 1hefrom the Doubin law on the contract
of common interest, with this text, the termination for non-renewal of the contract of
concession no longer depends exclusively on the general theory of obligations.
public interest qualifications without implying automatic compensation in case
The termination of the contract nonetheless requires the author of the termination to justify themselves.

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 CHAPTER 2: THE FRANCHISE AGREEMENT
The franchise agreement or franchising, or also factoring, is the contract by
which a person called a franchisor commits to communicating know-how to
another person named franchisee, to enjoy his brand and
possibly to provide it in goods.
The franchisee commits to utilizing the know-how, to using the brand and
eventually to supply from the supplier. It's a very
modern financing of the supplier credit type, but it is mainly a technique
evolved commercial management. Ex: western union.
It is widely used in the temporary staffing services sector in sales.
clothes, flowers, and allows a manufacturer to set up a distribution network
under its name or under its brand, without having to bear the costs of setting up,
while the franchisee benefits from the experience of his partner, and has access to
the opening of its fund of a pre-established clientele. As for the client, they have the

certainty of finding in a few places he passes the same quality of products and
services.
The franchise contract developed in the 19thandand at 20e in the USA, on the occasion of the
trade with the UK. It was introduced in Europe in 1960 with the establishment of a
international factoring network in the UK taken from the European continent.
The franchise contract is derived from practice. In the absence of regulation, practice and
the JP tried to balance the relations between the parties. In France, the association
The French standardization organization known as AFNOR has published a standard aimed at establishing

some basic rules precisely defining the role of the contractors and
listing the information that everyone must communicate to their partner. At the level
European, there is the community regulation 4087-88 applicable to the franchise.
The franchise contract is a costly and synallagmatic contract. It is a contract
A commercial that implies a close collaboration between the parties. Franchising implies
a license of know-how. The franchise contract is based on a transfer of technology
and business processes, on recipes, on know-how. If the know-how
the transmission is inconsistent, the contract must be canceled for lack of cause or else
disqualified.
3 elements characterize the franchise:

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 the communication of know-how;
commercial assistance
the trademark license.
The franchise contract is concluded between two independent merchants. If a contract
defranchise only involves a communication of know-how, it is reduced to a
simple collaboration contract. It is a business contract aimed at the
transfer of a technique. The fundamental obligation of the contract resides in the
transmission of know-how. In return, the beneficiary undertakes to pay a
remuneration. If the contract does not include a communication of know-how, it does not
can be considered a franchise agreement. It would be a contract
supply and provision. If the agreement grants too much power to the
franchisor, it will be disqualified as an employment contract. This is the case when it is established.

that the franchisee no longer has legal authority. It is enough that the contract establishes between
the parties a close collaboration, revealing the existence of a de facto company.
Qualification is not impossible, as agreements can be established by the
rights granted by the franchisor and the franchisee industry. In addition, the collaboration
It is well of the essence of the contract and expresses itself throughout its existence.

The study of the franchise contract allows us to see the relationships between the parties on one hand, and
the relationships between the parties and the third parties on the other hand.

The relations between the parties

This relationship extends from the formation of the contract to its expiration.
its execution.

§ 1: The formation of the franchise contract

The franchise contract appears in the form of a formula. It is a standard contract.
in which the franchisor reveals what he has seen and developed as an original process of
fabrication identified by such a brand and knowing such commercial success: it is a
clothing, of a fragrance.

This information is contained in a preamble, they respond to the obligation of

information that weighs on the franchisor. The contract may be preceded by an aspect
by which the manufacturer imposes a test on the franchisee: this is called the
corner contract. In this contract, a merchant agrees to sell in their establishment.
commerce of products from a renowned manufacturer. In its store, a space will be

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 reserved for the marketing of this product according to the manufacturer's specifications. If the
products are selling well, the manufacturer can suggest to their partner to dedicate to them
the entirety of the store and to enter into a genuine franchise contract.
Aside from these decisions, the franchise contract obeys the formation rules of law.
In case of breach, the contract will be rendered null and void.

§ 2: The execution of the contract

The franchise agreement is a synallagmatic contract that contains obligations.
at the expense of both parties:
The franchisor has the obligation to conduct a site location study for the future.

store
He must then communicate his expertise and maintain it in order to enhance its value.
the franchisee, at least to maintain its image;
He must provide technical and commercial assistance to his partner and put in place
at its disposal its brand and its sign;
As for the franchisee, they commit in turn to adhere to the standards set by the
franchisor to ensure the consistency of services;
He must make every effort necessary to allow for proper operation.
maintain the establishment in good condition;
He must take out insurance policies;
He must keep accounts following the franchisor's instructions and leave
the representatives of the latter carry out the necessary checks;
He must also defend the brand image of the franchisor and do nothing that could
to compromise her;
He must collaborate in the development of the franchise, and for that, he is forbidden to
market competing products;
The franchisee must finally pay an entry fee, as well as a royalty calculated
according to the revenue generated. The determination of the fee must comply with
conditions of Article 1129 of the Civil Code: "the obligation must have as its object a
chosen at least determined as to its species, the quantity of the thing may
to be uncertain, provided that it can be determined in order to be able to

determine the turnover

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§ 3: The expiration of the contract
The franchise contract is generally a fixed-term contract. If it contains a
supply exclusivity cannot exceed 10 years. The renewal of
the agreement is not mandatory upon the deadline. However, the parties often anticipate
a tacit renewal clause. It may be preceded by a notice. The contract
can be terminated without justification before the term. If it is a CDI, the termination is valid
unless it is abusive, that is to say brutal and without warning.
The franchise agreement is a contract intuitus personae, meaning that the personality
the franchisee enters into the contractual field. Also, the contract ends in the event of death
the franchisee. But it can be continued or even transferred if the franchisee is subject to
collective procedure.
The contract terminates by court decision or based on a termination clause.
The expiration of the contract raises the issue of the non-compete clause. The case law decides
this clause is not enforceable against the rights holders of the deceased franchisee. It must be
canceled when the contract that stipulates it is terminated.

Section 2: The parties' relationships with third parties

Several categories of third parties may be involved in the franchise contract.

§ 1: Consumers
In typical franchise agreements, there is often a clause that states that the
The franchisee will be solely responsible to third parties for the guarantees he owes. But if the
goods delivered by the supplier had a hidden defect or a non-
compliance, the replacement cost would be borne by the franchisor. This clause sets
Responsibilities between franchisor and franchisee. The franchisee being a retailer.
independent, he alone assumes the risks of guaranteeing the thing. However, the
consumers often seek to establish a co-responsibility between franchisee and
franchisor. This co-responsibility is based on the fact that the franchisor is very
engaged in the organization of the franchisee.

This consumers' proposal was not retained in JP, otherwise, it ...

would remove from the franchise its original character, which is to establish a partnership between

independent businesses.

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§ 2 : The suppliers
The franchisee is an independent entity and contracts in their own name. Therefore, their
Commercial partners have no direct actions against the supplier.
the franchisor is therefore not liable for the debts contracted by the franchisee. The principle of

the relative effect of contracts which stipulates that a contract affects only the parties involved
contractors oppose it.

§ 3: The other members of the network

If the franchise does not constitute an agreement, it can have anti-competitive effects.
Restricting distributors' access to the existing network. Some clauses of the
franchises violate competition law and must be annulled. This is what is decided
the Pronuptia ruling. This decision was made by the Court of Justice of the community
European on January 28, 1986. It considers that the clauses that allow for the
franchisor to transmit its know-how, without risking that it be passed on to
competitors or those aiming to preserve the identity and reputation of the network, such as the
clauses by which the franchisee agrees to adhere to the commercial methods of
franchisor, are valid.
However, the clauses by which the franchisor imposes resale prices are null.
or the clauses that restrict competition between members of the network.
These provisions can be found in Regulation 4047-88 of the Community
European. By these provisions, the franchisee cannot engage in an active policy.
selling in the territories of other franchisees. But we cannot prohibit him from
respond to requests from users residing in other granted territories who it
solicited. Therefore, the franchisee can only benefit from a competence
relative territorial.

§ 4: External traders to the network

The franchisor is not obliged to contract with merchants outside the network.
According to the Pronuptia ruling, he has the right to freely choose the franchisees whose
professional qualifications are a condition for establishing and maintaining reputation
of the network.

The Yves Rocher ruling adds that it can exclude candidates who do not seem acceptable to it.
fulfill the professional and personal qualification conditions that they require for

16
the formula he developed. The implementation of these conditions by the franchisor
is often difficult, and it can engage his liability for refusal to sell.
If the franchise is accompanied by territorial exclusivity, it is considered that the products
requested are unavailable, which justifies the refusal of sale.

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 CHAPTER 3: DISTRIBUTION CONTRACTS
SELECTIVE
The Nina Ricci principle ruling of November 3, 1982 provides a definition of distribution.
selective.
The selective distribution contract is one by which a supplier undertakes to
supply in a specific sector, one or more merchants that he
choose based on the objective criterion, of a qualitative nature without discrimination and
without unjustified quantitative limitation, and by which the distributor is authorized to
sell other competing products.
This contract therefore consists of selecting a certain number of distributors based on
objective criteria related to the product brand. Retailers have no rights.
exclusivity. Selective distribution essentially grants luxury products, of
prestige, brand.
Perfumes, furs.
This marketing method appeared in the 1970s. It allows for
manufacturers to market their products under good conditions.
Distributors have the advantage of being sellers in title. Selective distribution involves
attacks on free competition among commercial agents and does not promote a decrease in
price. It poses two essential problems:
the legality of this form of distribution;
- the application of this principle.
Section 1: The principle of validity
French case law inspired by the Courts of Justice of the European Community reveals
two conditions for the validity of the selective distribution contract:
The selection of distributors must be done objectively and not subjectively.
discriminatory.
For this, it is necessary to take into account professional qualifications and competence.
of personnel, the layout of the commercial space and its location;
The refusal of the other merchants in the network must be justified solely by the
brand promotion. Any other purpose leads to the cancellation of this contract. The
selective distribution must lead to the improvement of marketing and
stimulate competition. It should not be used to close distribution channels

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 to other merchants. The legality of selective distribution depends on compliance
of competition law.
In the selective distribution system, the distributor is not free to follow the
trade policy that he wants. He must adhere to the manufacturer's guidelines to
that the product is always marketed under good conditions. It must
maintain the standard of the point of sale, present the products in such a way,
have competent staff, maintain a minimal stock, enhance the
mark by practicing a certain price range, and forbidding oneself to sell by
correspondence or self-service.
In case of non-performance of one of these obligations, the manufacturer may request the

termination of the contract or even going to the ban on resale outside of authorization. Thus the
a distributor cannot sell in a store that does not have or no longer has the approval
from the manufacturer.

The distributor cannot sell to unauthorized retailers either.

Generally, compliance with these obligations is ensured by a resolutory clause.

The selective distribution contract can legitimize a refusal to sell. Thus, the refusal to
sale is justified when the local network density at the time of demand
The affiliation presented does not allow for the creation of a new point of sale, because
that this creation is likely to increase the cost price and therefore may harm
the economic interest of the consumer. One may wonder if the principle of
Selective distribution allows the supplier to engage in unfair competition against the
external resellers who obtain the products through parallel channels.
A priori, an affirmative answer can be given because these resellers are not
agreed. They therefore cannot market the product. Also, the solutions adopted
in exclusive concession are not applicable in selective distribution matters,
because there is no exclusivity.
This lack of exclusivity and the lesser protection it entails find their
counterweight in an action for unfair competition. The case law has applied this solution,
but more recently there has been a jurisprudential ruling with the decision of the Court of
Cassation on December 13, 1988. It considered that the act of marketing...
products related to selective distribution networks do not in themselves constitute,

19
the absence of another element, a wrongful act.
Section 2: The implementation of the principle
The main difficulty of selective distribution concerns the application of the criteria of
choice of resellers. The selection criteria are vague and contingent because fashion is
evolving and a brand may not shine at all times. So how to do the
proof of selective distribution?
The JP places the burden of proof of completion on the suppliers.
conditions required by selective distribution. It is up to the manufacturer to establish the
legitimacy of its network considered in the context of all related agreements. The rule
is justified because selective distribution is an exception to the principle of free
concurrence.

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