France

Implementing legislation

Law no. 91-593 of 25.6.1991; decree 92-506 of 10.6.1992

Proper notice

• 1 month if < 1 year;
• 2 months if = 1 year and < 2 years;
• 3 months if =/> 2 years

(always expiring at end of calendar month)

Indemnity or compensation or both

Compensation only

Calculation of indemnity/compensation

2 x average annual commission over last 3 years or the global amount of the last two years

Pre-termination commission

Yes

Post-termination commission

Yes

Back commission

Yes

Restrictive Covenants

1)  Under French law is it possible to have a restraint of trade clause operating during the agency agreement and, if so, is it subject to any qualifications?

A restraint of trade clause operating during the agency agreement is admissible under French law. 

In the absence of an exclusive obligation towards his principal, an agent can, without needing authorisation from his principal, represent new principals.  However, an agent is not permitted to represent another principal that competes with his existing principal, unless the existing principal provides consent to this representation. 

Case law has indicated a willingness in the courts to interpret the concept of competition narrowly.  This means that an agent can, in theory, operate for several different principals if the products do not have the same characteristics or are used for different purposes.

2)  Under French law is it possible to have a restraint of trade clause operating following the termination or expiry of the agency agreement and, if so, is it subject to any qualifications?

A restraint of trade clause operating following the termination or expiry of the agency agreement is admissible under French law.

The clause will only be permitted if it is in writing and covers a specific geographic area and, if applicable, it covers the group of persons entrusted to the commercial agent and the type of goods or services which the agent represented under the agreement. 

There is an additional requirement of proportionality.  The clause must be necessary for the protection of the principal’s interests, and the clause must not wholly prevent the agent from conducting other business.

agentlaw.co.uk. wishes to thank Foucaud, Tchekhoff, Pochet & Associes of Paris for its contribution to this page