This directive has been transposed into French law, and the highly protective status of commercial agents is enshrined in Articles L.134-1 to L.134-17 of the French Commercial Code.

Compensation Due in the Event of Contract Termination

Indeed, the termination of a commercial agency agreement entitles the commercial agent to compensation for the loss of clientele.

This is a matter of public policy, and any clause to the contrary is deemed null and void.

The amount of this compensation is left to the discretion of the courts, and Article L134-12, paragraph 1 of the French Commercial Code states:

« In the event of termination of the relationship with the principal, the commercial agent is entitled to compensation for the damages suffered. »

This compensation is generally set at two years' gross commissions, calculated on the average of the last two or three years.

Under what circumstances is the compensation paid?

It is due to the commercial agent, whether the termination originates from the principal, the agent themselves (due to misconduct by the principal), or the agent's illness, which prevents them from fulfilling their duties.

In practice, it will be very difficult for the principal to avoid payment of this compensation, unless the commercial agent fails to claim it within one year of the termination of the contract.

The Strategic Importance of the Trial Period

It is therefore crucial for the principal to carefully draft the contract and include a trial period that allows them to suspend the contractual relationship at minimal cost, if necessary.

This was reaffirmed by the Court of Cassation in a ruling dated June 23, 2015: a trial period included in a commercial agency contract must be considered valid.

Such a trial period allows the principal to terminate the commercial agency contract during the notice period and avoid paying any compensation for loss of clientele to the commercial agent.

Securing the Contract

In light of this case law, particular attention must be paid to the drafting of the commercial agency contract and the clause relating to the trial period to ensure that the agent is not deprived of the protection afforded by law, which is a matter of public policy.

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