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Terminate a commercial Relationship in France
French law does not restrict the decision to end a commercial relationship; it restricts ending one abruptly. Under Article L 442-1, II of the Commercial Code, a party that breaks off an established relationship, wholly or in part, without written notice proportionate to its duration answers in damages for the margin the other side loses over the notice that should have been granted. The rule is of public order and reaches relationships that were never reduced to a signed contract. We assist foreign companies in ending an established commercial relationship in compliance with French requirements, so that the exit does not become a claim in damages.
- The notice is measured against the whole history of the relationship, not against the current contract or the last purchase order
- A notice of eighteen months cannot be held insufficient, whatever the length of the relationship (Article L 442-1, II)
- Partial termination is caught in the same terms: cutting volumes, raising prices or withdrawing a territory requires its own proportionate notice
- Immediate termination is available only for a serious breach of the counterpart or for force majeure, and the ground must be provable at the date it is invoked.
Petroff Avocats· 182 rue de Rivoli, 75001 Paris · RCS Paris 814433470 · Toque #C2396
Why it matters
When Ending a Commercial Relationship Becomes a Legal Matter?
The obligation to give proportionate written notice is imposed by statute in the general interest of the market, not by the parties' bargain; it survives the silence of the contract and often its express terms. Whether notice is owed, and how long it must run, is decided on the facts. The situations we see:
- You are ending a French distributor or supplier — the length of the notice, the form of the notification and the terms applied during the notice period decide the whole exposure
- You are restructuring rather than ending — a volume cut, a price rise or the withdrawal of an exclusivity is a partial termination and carries its own notice
- You are relying on a termination clause — a contractual notice is a floor the parties agreed, not a discharge of the statutory standard
- You intend to terminate for breach — a serious breach removes the notice obligation entirely, but a breach that fails at trial returns you to the ordinary regime and to damages
- The relationship was never contractual — a recurring flow of orders on general terms of sale is protected in exactly the same way
- Your contract is governed by foreign law — the prohibition is treated as an overriding mandatory provision for relationships connected to France
For the terminating party, the decisive acts come before the letter is sent. The notice cannot be lengthened after the event, the notification cannot be re-dated, and the terms applied during the notice period are assessed as they were performed. Advice taken before the decision is communicated is what keeps the exposure inside the figure you budgeted.
What you receive
What a Termination Engagement Includes
The engagement covers the assessment, the notification and the defence of the termination where it is later attacked:
- The exposure analysis — the true seniority of the relationship, the counterpart's dependence and turnover share, exclusivity, dedicated investment and any non-compete, in a written opinion in English
- The notice period — a reasoned figure calibrated to the case law, with the reasoning recorded contemporaneously so that it can be produced later
- The notification — the written notice that starts the period, in the form and to the entity that binds the counterpart
- The conduct of the notice period — the terms on which the relationship must continue, and the changes that would hollow the notice out
- The stock, tooling and confidentiality — the exit terms that are settled while you still have leverage
- The defence — representation before the specialised commercial courts where an abrupt-termination claim follows
How we work
How We Help You End the Relationship ?
We measure the relationship
We count from the real start of dealings, not from the date of the current contract: predecessor entities, successive fixed-term contracts, renewals and periods of tacit continuation. The established relationship, not the last signature, is what the notice must match.
We fix the notice
We calibrate the period against the factors the courts weigh — duration, exclusivity, economic dependence, the counterpart's capacity to reconvert, any non-compete, the trade cycle — and against the notices actually granted in comparable decisions. Where certainty matters more than cost, we advise on the eighteen-month safe harbour.
We prepare the notification
We draft the written notification that starts the period, addressed to the entity actually bound, stating the end date and the grounds where grounds are relied on. An informal indication, or a mere reduction in orders, does not start anything.
We help you conduct the notice period
We set the terms on which the relationship must continue while the notice runs, because a notice hollowed out by volume cuts, price rises or the withdrawal of an exclusivity is treated as no notice at all.
We negotiate an accommodated exit
Most terminations are better settled than served. We negotiate a transitional agreement with the counterparty covering the run-off of the notice period and the practical hand-over: which party carries the remaining stock and on what terms it is bought back or sold down, the transfer of marketing authorisations, registrations and licences, what becomes of the customer base and the customer data, the tooling and point-of-sale material, and the confidentiality and post-term restrictions that survive. Agreed in advance, these terms close the exposure; left to the end of the notice, they become the substance of the dispute.
We defend, and where possible, settle the claim
Where damages are nevertheless claimed, we quantify what is genuinely owed, open negotiations on that basis and draft the settlement agreement ("transaction") that fixes the figure and prevents the claim from being reopened. Where no settlement is reached, we act before the specialised commercial courts and answer the quantum advanced against you.
What we need from you
What We Need to Assess Your Exposure Before You Give Notice
We will need the following documents and information:
The contract and every predecessor arrangement
We review the current agreement, its amendments and whatever preceded it, including arrangements that were never signed. The notice is owed on the relationship as a whole, so a chain of short contracts renewed as a matter of course counts as one continuing relationship.The trading history
We need the volumes, the turnover and the order flow over the life of the relationship. They establish its regularity, the share of the counterpart's activity it represented, and therefore both the notice owed and the margin any claim would be measured on.The correspondence and any complaint made
We need the exchanges about performance, targets and territory. Where you intend to rely on a serious breach, it must have been raised and documented at the time; a breach assembled after the decision rarely survives.The commercial plan behind the decision
We need to know what you intend to do next — a new distributor, a direct presence, a change of sourcing — and by when. The notice must be long enough to be real, and the calendar of the replacement must be compliant.
Transparent, Fixed Fee
What a Termination Costs
One fee for the legal work, quoted per phase — exposure assessment, notification, conduct of the notice period, proceedings — once we know the relationship, its history and the calendar you are working to. Outside costs are billed separately.
Included In The Fee
€On quote
confirmed after scoping
- The exposure and notice-period analysis
- The written opinion in English
- The termination notification and its service
- The terms governing the notice period
- The exit documents and the settlement agreement
- The procedural documents and representation at hearings
Billed Separately, At Cost
Billed Separately, At Cost
- Court fees
- Service of documents and findings by bailiff ("commissaire de justice")
- The fees of any court-appointed expert
- Sworn translations of foreign documents
- Enforcement agents' costs
Note: a court may also award costs against the losing party under Article 700 of the Code of Civil Procedure — in either direction.
Why Choose Us
How Petroff Avocats Handles Terminations in France?
From Decision to Closed file
We act on both sides of the same provision, which is the useful experience: a supplier's notice is calibrated by lawyers who also quantify the claims brought against suppliers, and a claim is built by lawyers who know how the defence is prepared. The analysis — seniority, aggravating factors, defensible notice, exposure range — is delivered in English as a written opinion the decision can rest on.
We then conduct the matter in France end to end: the notification, the terms of the notice period, the exit documents, and the defence before the specialised commercial courts where a claim follows.
Lawyer registered with the Paris Bar
Understanding French law on Terminating a Commercial Relationship
What French Law Says About Ending a Commercial Relationship?
The Wrong
It is the insufficiency of the notice, not the termination
Ending the relationship is free; ending it without proportionate written notice is what costs money (Article L 442-1, II). The exposure is therefore a figure that can be established before you act, and it is the difference between the notice you intend to give and the notice a court would have required. We put that figure in front of you, in English, with the reasoning that supports it, so the decision is taken on a number rather than on an assumption.
Eighteen months
Certainty on duration has a price, and it is knowable
A notice of eighteen months cannot be held insufficient, whatever the length of the relationship. For a very long or heavily dependent relationship, where certainty matters more than the cost of the run-off, that is the route we advise and perform in full. For most relationships it is far more than proportionate, and paying for it needlessly is its own loss — we tell you which of the two you are in, and what the difference is worth.
Restructuring
Reducing the relationship is not a quieter way of ending it
A steep cut in volumes, a marked price increase or the withdrawal of a territory is treated as a partial termination and carries its own proportionate notice. Foreign groups routinely assume that continuing to trade at a reduced level keeps them outside the rule, and it is the most frequent source of claims we see. Where the commercial decision is a reduction rather than an exit, we phase it under written notice, so that the change is made once and not paid for twice.
The relationship
No written contract is required for the protection to attach
The obligation follows the course of dealing, so a recurring flow of orders on general terms is protected exactly as a signed distribution contract is. What matters is the real seniority of the relationship, which usually predates the agreement in force: predecessor entities, successive fixed-term contracts, renewals and periods where the parties simply carried on. Establishing that history is the first work on the file, because everything else is measured against it.
Without notice
Terminating for breach is powerful and hazardous
A sufficiently serious breach of the counterparty removes the notice obligation entirely, and with it the exposure. The risk is asymmetric: a breach that fails at trial returns you to the ordinary regime, liable for the notice you declined to give, and a ground assembled after the decision rarely survives. We test the ground against the threshold before it is invoked, and where it holds we build the contemporaneous record that carries it.
The notice period
What you do while the notice runs decides whether it counted
The relationship must continue on substantially its previous terms until the notice expires: the volumes, the prices, the exclusivity and the service as they stood. Appointing a successor during that period is permitted; diverting the customers to it, or letting supply degrade, is not, and a notice hollowed out in that way is assessed as though none had been given. We set those terms in writing at the outset and keep the record of performance, because a claim may arrive up to five years later, when memories have gone and the file is all that remains.
How long
The notice is fixed on the facts, not on the contract
Duration comes first, then exclusivity, economic dependence, dedicated investment, any non-compete and the counterparty's real capacity to replace the business elsewhere. The contractual notice is one datum among these, and a short clause will not save the termination of a long relationship. We give you a defensible period, and we record the reasoning contemporaneously, because a figure justified at the time is what answers the claim two years later.
The negotiated exit
An agreed exit is cheaper than a served one
Nothing obliges you to impose the end of the relationship rather than agree it. A transitional agreement fixes the length of the run-off, the responsibility for the remaining stock, the transfer of marketing authorisations and registrations, the fate of the customer base and data, and the restrictions that survive the exit. Where it also settles the compensation, the claim disappears with it: the protection cannot be excluded in advance, but it can be settled once the relationship has ended.
Cross-border
Your governing-law clause is not the answer to this question
Where the relationship is sufficiently connected to France, the French protection is applied whatever law the contract chooses, and the claim is heard by a small number of designated commercial courts with appeal concentrated in Paris. A US, UK or Australian principal terminating a French partner is therefore exposed in France, on French terms, however the agreement was drafted. We settle the forum and the applicable law before the notice is prepared, because both shape what the notice has to be.
Your French Registered Lawyer
Petroff Avocats
Registered with the Paris Bar
Toque #C2396
15+ Years In Corporate & commercial Practice
English · French
Petroff Avocats advises foreign suppliers, brands and international groups on ending distribution, supply and franchise relationships in France — the seniority of the relationship, the notice the case law requires, the notification itself and the terms of the run-off — and acts for terminated partners claiming damages for abrupt termination, for clients based in the US, UK, UAE and Australia.
Practice Areas
How we help
- Exposure assessment before the decision is communicated
- Calibration of the notice period and its contemporaneous record
- Termination notifications and the conduct of the notice period
- Phasing of volume, price and territory changes
- Transitional agreements: stock, authorisations, customer base
- Negotiation, settlement and proceedings before the specialised courts
Remember
Key takeaways
- French law does not restrict ending a commercial relationship; it restricts ending one without written notice proportionate to its duration.
- The notice is owed on the relationship as a whole, including predecessor arrangements, renewals and periods of tacit continuation.
- A contractual notice clause is a floor the parties agreed, not a discharge of the statutory standard.
- Cutting volumes, raising prices or withdrawing a territory is a partial termination and carries its own notice.
- Eighteen months of written notice removes liability for insufficient duration, whatever the length of the relationship.
- A notice that is served and then hollowed out is treated as no notice at all, and the record of the notice period is what defends it.
Common Questions
Terminating a Commercial Relationship In France — Q&A
Where the file is complete, the assessment and the notification take days rather than weeks. What takes time is establishing the true seniority of the relationship, and that is done from your own documents, so the calendar is largely in your hands.
The fee is fixed per phase and quoted before any work begins, once our lawyers know the length of the relationship and the turnover on it. Outside costs — bailiff, translations, court fees — are billed separately, at cost.
Yes. Where the period served is short, the position is often recoverable during the notice itself, by extending it or by settling the difference. The one thing that cannot be repaired afterwards is the conduct of a period already run.
Yes, before the specialised commercial courts. We answer both the sufficiency of the notice and the quantum advanced against you, and the quantum is usually where the case is decided.
Yes, and it is often preferable. Correspondence and negotiation are conducted by us in French and reported to you in English, which keeps the exchange formal and out of the commercial relationship you may still need during the notice.
You sign, as the party bound. We draft it in French, with an English version for your file, and we identify the entity that must be addressed and the person entitled to receive it, since a notification served on the wrong entity starts nothing.
We act for both terminating suppliers and terminated partners, which is what allows an exposure to be assessed by lawyers who also build the claims. We do not act against a client, and any conflict is cleared before the file is opened.
The notice runs on its terms and the exit follows the statutory route. The refusal costs you nothing by itself, and the negotiation can be reopened at any point while the notice is running.
Mariela Petrova
Avocate au Barreau de Paris
Toque #C2396
15+ Years In French Corporate Practice
English · French
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Help With Your SAS
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