-
Frankreich
France | Pre-contractual disclosure in distribution and franchise agreements
31 März 2021
- Vertrieb
- Franchising
Der Gerichtshof der Europäischen Union („EuGH„) hat ein neues Urteil zum internationalen Anwendungsbereich der Handelsvertreterrichtlinie (86/653/EWG vom 18. Dezember 1986) gefällt. Die neue Entscheidung steht im Einklang mit den Urteilen
- des EuGHs in den Rechtssachen Ingmar (Entscheidung vom 9. November 2000, C-381/98, obligatorischer Ausgleich des Firmenwerts, wenn der Handelsvertreter innerhalb der EU handelt) und Unamar (Entscheidung vom 17. Oktober 2013, C-184/12, zur Frage, ob das nationale Handelsvertreterrecht zwingend ist, wenn der Mindestschutz der Handelsvertreterrichtlinie überschritten wird) und
- des Bundesgerichtshofs vom 5. September 2012 (deutsches Handelsvertreterrecht als zwingendes Recht gegenüber Lieferanten in Drittstaaten mit Gerichtsstandsklausel).
Die Frage
Der EuGH hatte nun zu entscheiden, ob ein Handelsvertreter, der in der Türkei für einen in Belgien ansässigen Lieferanten tätig ist, auf der Grundlage der Handelsvertreterrichtlinie einen Anspruch auf Ausgleich des Firmenwerts geltend machen kann. Konkret ging es um die Frage, ob der territoriale Anwendungsbereich der Handelsvertreterrichtlinie gegeben ist, wenn der Handelsvertreter in einem Drittland und der Lieferant innerhalb der EU tätig ist – der gegensätzliche Fall zur Ingmar-Entscheidung.
Der Sachverhalt
Nach dem Handelsvertretervertrag galt belgisches Recht, und die Gerichte in Gent (Belgien) sollten zuständig sein. Das belgische Recht, das die Richtlinie über Handelsvertreter umsetzt, sieht bei Beendigung des Vertrags einen Anspruch auf eine Entschädigung für den Geschäftswert (und darüber hinaus einen Anspruch auf Schadensersatz) vor. Das vorlegende Gericht vertrat jedoch die Auffassung, dass das belgische Handelsvertretergesetz von 1995 eine Selbstbeschränkung darstellt und gemäß seinem Art. 27 nur dann anwendbar ist, wenn der Handelsvertreter in Belgien tätig war. Andernfalls würde das allgemeine belgische Recht gelten.
Die Entscheidung
Der EuGH entschied, dass die Parteien von der Handelsvertreterrichtlinie abweichen können, wenn der Vertreter in einem Drittland (d. h. außerhalb der EU) tätig ist. Dies war hier der Fall, da der Vertreter in der Türkei tätig war.
Die Entscheidung ist besonders bemerkenswert, weil sie – eher nebenbei – die Ingmar-Entscheidung des EuGH zur Rom I-Verordnung fortschreibt (I.). Darüber hinaus bestätigt sie indirekt §. 92c HGB (II.) – der es den Parteien eines Handelsvertretervertrags nach deutschem Recht ermöglicht, vom allgemein zwingenden Handelsvertreterrecht abzuweichen, wenn der Handelsvertreter außerhalb des Europäischen Wirtschaftsraums („EWR„) tätig ist. Schließlich schafft er Rechtssicherheit für den Vertrieb außerhalb des EWR und zeigt auf, was sich nach einem Brexit für im Vereinigten Königreich tätige Handelsvertreter ändern kann (III.) – wenn die EU und das Vereinigte Königreich keine Übergangsregelungen treffen.
Zu den Einzelheiten siehe den Beitrag von Benedikt Rohrßen, Zeitschrift für Vertriebsrecht 2017, 186 ff. („Ingmar reloaded – Handelsvertreter-Ausgleich bei umgekehrter Ingmar-Konstellation nicht international zwingend„).
Summary
Political, environmental or health crises (like the Covid-19 outbreak and the attack of Ukraine by the Russian army) can cause an increase in the price of raw materials and components and generalized inflation. Both suppliers and distributors find themselves faced with problems related to the often sudden and very substantial increase in the price of their own supplies. French law lays down specific rules in that regard.
Two main situations can be distinguished: where the parties have just established a simple flow of orders and where the parties have concluded a framework agreement fixing firm prices for a fixed term.
Price increase in a business relationship
The situation is as follows: the parties have not concluded a framework agreement, each sales contract concluded (each order) is governed by the General T&Cs of the supplier; the latter has not undertaken to maintain the prices for a minimum period and applies the prices of the current tariff.
In principle, the supplier can modify its prices at any time by sending a new tariff. However, it must give written and reasonable notice in accordance with the provisions of Article L. 442-1.II of the Commercial Code, before the price increase comes into effect. Failure to respect sufficient notice, it could be accused of a sudden „partial“ termination of commercial relations (and subject to damages).
A sudden termination following a price increase would be characterized when the following conditions are met:
- the commercial relationship must be established: broader concept than the simple contract, taking into account the duration but also the importance and the regularity of the exchanges between the parties;
- the price increase must be assimilated to a rupture: it is mainly the size of the price increase (+1%, 10% or 25%?) that will lead a judge to determine whether the increase constitutes a „partial“ termination (in the event of a substantial modification of the relationship which is nevertheless maintained) or a total termination (if the increase is such that it involves a termination of the relationship) or if it does not constitute a termination (if the increase is minimal);
- the notice granted is insufficient by comparing the duration of the notice actually granted with that of the notice in accordance with Article L. 442-1.II, taking into account in particular the duration of the commercial relationship and the possible dependence of the victim of the termination with respect to the other party.
Article L. 442-1.II must be respected as soon as French law applies to the relation. In international business relations, to know how to deal with Article L.442-1.II and conflicts of laws and jurisdiction of competent courts, please see our previous article published on Legalmondo blog.
Price increase in a framework contract
If the parties have concluded a framework contract (such as supply, manufacturing, …) for several years and the supplier has committed to fixed prices, how, in this case, can it change these prices?
In addition to any indexation clause or renegotiation (hardship) clause which would be stipulated in the contract (and besides specific legal provisions applicable to special agreements as to their nature or economic sector), the supplier may seek to avail himself of the legal mechanism of „unforeseeability“ provided for by article 1195 of the civil code.
Three prerequisites must be cumulatively met:
- an unforeseeable change in circumstances at the time of the conclusion of the contract (i.e.: the parties could not reasonably anticipate this upheaval);
- a performance of the contract that has become excessively onerous (i.e.: beyond the simple difficulty, the upheaval must cause a disproportionate imbalance);
- the absence of acceptance of these risks by the debtor of the obligation when concluding the contract.
The implementation of this mechanism must stick to the following steps:
- first, the party in difficulty must request the renegotiation of the contract from its co-contracting party;
- then, in the event of failure of the negotiation or refusal to negotiate by the other party, the parties can (i) agree together on the termination of the contract, on the date and under the conditions that they determine, or (ii) ask together the competent judge to adapt it;
- finally, in the absence of agreement between the parties on one of the two aforementioned options, within a reasonable time, the judge, seized by one of the parties, may revise the contract or terminate it, on the date and under the conditions that he will set.
The party wishing to implement this legal mechanism must also anticipate the following points:
- article 1195 of the Civil Code only applies to contracts concluded on or after October 1, 2016 (or renewed after this date). Judges do not have the power to adapt or rebalance contracts concluded before this date;
- this provision is not of public order. Therefore, the parties can exclude it or modify its conditions of application and/or implementation (the most common being the framework of the powers of the judge);
- during the renegotiation, the supplier must continue to sell at the initial price because, unlike force majeure, unforeseen circumstances do not lead to the suspension of compliance with the obligations.
Key takeaways:
- analyse carefully the framework of the commercial relationship before deciding to notify a price increase, in order to identify whether the prices are firm for a minimum period and the contractual levers for renegotiation;
- correctly anticipate the length of notice that must be given to the partner before the entry into force of the new pricing conditions, depending on the length of the relationship and the degree of dependence;
- document the causes of the price increase;
- check if and how the legal mechanism of unforeseeability has been amended or excluded by the framework contract or the General T&Cs;
- consider alternatives strategies, possibly based on stopping production/delivery justified by a force majeure event or on the significant imbalance of the contractual provisions.
Under French Law, franchisors and distributors are subject to two kinds of pre-contractual information obligations: each party has to spontaneously inform his future partner of any information which he knows is decisive for his consent. In addition, for certain contracts – i.e franchise agreement – there is a duty to disclose a limited amount of information in a document. These pre-contractual obligations are mandatory. Thus these two obligations apply simultaneously to the franchisor, distributor or dealer when negotiating a contract with a partner.
General duty of disclosure for all contractors
What is the scope of this pre-contractual information?
This obligation is imposed on all co-contractors, to any kind of contract. Indeed, article 1112-1 of the Civil Code states that:
(§. 1) The party who knows information of decisive importance for the consent of the other party must inform the other party if the latter legitimately ignores this information or trusts its co-contractor.
(§. 3) Of decisive importance is the information that is directly and necessarily related to the content of the contract or the quality of the parties. »
This obligation applies to all contracting parties for any type of contract.
Who must prove the compliance with such provision ?
The burden of proof rests on the person who claims that the information was due to him. He must then prove (i) that the other party owed him the information but (ii) did not provide it (Article 1112-1 (§. 4) of the Civil Code)
Special duty of disclosure for franchise and distribution agreements
Which contracts are subject to this special rule?
French law requires (art. L.330-3 French Commercial Code) communication of a pre-contractual information document (in French “DIP”) and the draft contract, by any person:
- which grants another person the right to use a trade mark, trade name or sign,
- while requiring an exclusive or quasi-exclusive commitment for the exercise of its activity (e.g. exclusive purchase obligation).
Concretely, DIP must be provided, for example, to the franchisee, distributor, dealer or licensee of a brand, by its franchisor, supplier or licensor as soon as the two above conditions are met.
When the DIP must be provided?
DIP and draft contract must be provided at least 20 days before signing the contract, and, where applicable, before the payment of the sum required to be paid prior to the signature of the contract (for a reservation).
What information must be disclosed in the DIP?
Article R. 330-1 of the French Commercial Code requires that DIP mentions the following information (non-detailed list) concerning:
- Franchisor (identity and experience of the managers, career path, etc.);
- Franchisor’s business (in particular creation date, head office, bank accounts, historical of the development of the business, annual accounts, etc.);
- Operating network (members list with indication of signing date of contracts, establishments list offering the same products/services in the area of the planned activity, number of members having ceased to be part of the network during the year preceding the issue of the DIP with indication of the reasons for leaving, etc.);
- Trademark licensed (date of registration, ownership and use);
- General state of the market (about products or services covered by the contract)and local state of the market (about the planned area) and information relating to factors of competition and development perspective;
- Essential element of the draft contract and at least: its duration, contract renewal conditions, termination and assignment conditions and scope of exclusivities;
- Financial obligations weighing in on contracting party: nature and amount of the expenses and investments that will have to be incurred before starting operations (up-front entry fee, installation costs, etc.).
How to prove the disclosure of information?
The burden of proof for the delivery of the DIP rests on the debtor of this obligation: the franchisor (Cass. Com., 7 July 2004, n°02-15.950). The ideal for the franchisor is to have the franchisee sign and date his DIP on the day it is delivered and to keep the proof thereof.
The clause of contract indicating that the franchisee acknowledges having received a complete DIP does not provide proof of the delivery of a complete DIP (Cass. com, 10 January 2018, n° 15-25.287).
Sanction for breach of pre-contractual information duties
Criminal sanction
Failing to comply with the obligations relating to the DIP, franchisor or supplier can be sentenced to a criminal fine of up to 1,500 euros and up to 3,000 euros in the event of a repeat offence, the fine being multiplied by five for legal entities (article R.330-2 French commercial Code).
Cancellation of the contract for deceit
The contract may be declared null and void in case of breach of either article 1112-1 or article L. 330-3. In both cases, failure to comply with the obligation to provide information is sanctioned if the applicant demonstrates that his or her consent has been vitiated by error, deceit or violence. Where applicable, the parties must return to the state they were in before the contract.
Regarding deceit, Courts strictly assess its two conditions which are:
- (a material element) the existence of a lie or deceptive reticence (article 1137 French Civil Code);
- And (an intentional element) the intention to deceive his co-contractor (article 1130 French Civil Code).
Damages
Although the claims for contract cancellation are subject to very strict conditions, it remains that franchisees/distributors may alternatively obtain damages on the basis of tort liability for non-compliance with the pre-contractual information obligation, subject to proof of fault (incomplete or incorrect information), damage (loss of chance of not contracting or contracting on more advantageous terms) and the causal link between the two.
French case law
Franchisee/distributor must demonstrate that he would not have actually entered into the contract if he had had the missing or correct information
Courts reject motion for cancellation of a franchise contract when the franchisee cannot prove that this deceit would have misled its consent or that it would not have entered into the contract if it had had such information (for instance: Versailles Court of Appeal, December 3, 2020, no. 19/01184).
The significant experience of the franchisee/distributor greatly mitigates the possible existence of a defect in consent.
In a ruling of January 20, 2021 (no. 19/03382) the Paris Court of Appeal rejected an application for cancellation of a franchise contract where the franchisor had submitted a DIP manifestly and deliberately deficient and an overly optimistic turnover forecast.
Thus, while the presentation of the national market was not updated and too vague and that of the local market was just missing, the Court rejected the legal qualification of the franchisee’s error or the franchisor’s willful misrepresentation, because the franchisee „had significant experience“ for several years in the same sector (See another example for a Master franchisee)
Similarly, the Court reminds that “An error concerning the profitability of the concept of a franchise cannot lead to the nullity of the contract for lack of consent of the franchisee if it does not result from data established and communicated by the franchisor„, it does not accept the error resulting from the communication by the franchisor of a very optimistic turnover forecast tripling in three years. Indeed, according to the Court, „the franchisee’s knowledge of the local market was likely to enable it to put the franchisor’s exaggerations into perspective, at least in part. The franchisee was well aware that the forecast document provided by the franchisor had no contractual value and did not commit the franchisor to the announced results. It was in fact the franchisee’s responsibility to conduct its own market research, so that if the franchisee misunderstood the profitability of the operation at the business level, this error was not caused by information prepared and communicated by the franchisor„.
The path is therefore narrow for the franchisee: he cannot invoke error concerning profitability when it is him who draws up his plan, and even when this plan is drawn up by the franchisor or based on information drawn up and transmitted by the franchisor, the experience of the franchisee who knew the local market may exonerate the franchisor.
Takeaways
- The information required by the DIP must be fully completed and updated ;
- The information not required by the DIP but communicated by the franchisor must be carefully selected and sincere;
- Franchisee must be given the opportunity to request additional information from the franchisor;
- Franchisee’s experience in the economic sector enables the franchisor to considerably limit its exposure to the risk of contract cancellation due to a defect in the franchisee’s consent;
- Franchisor must keep the proof of the actual disclosure of pre-contractual information (whether mandatory or not).
Wine Market in Mexico 2020-2021
The wine market in Mexico has shown an annual growth of approximately 8% during the past 5 years.
Importations have increased during the past 10 years, increasing its value in 88%.
Mexico has the second highest consumption growth rate worldwide according to the International Organization of Vine and Wine (OIV).
Current Trends in Mexico
Mexican wines accounted for 29% of Mexico’s consumption, while the remaining 71% corresponds to imported wines.
Wine consumption is primarily concentrated in 3 cities, Mexico City, Monterrey, and Guadalajara, with a potential increase in touristic locations.
Due to the health contingency generated as a result of the COVID19, on-line sales of the various supermarkets have increased in 300% during 2020.
Digitalization of processes represents a huge potential in terms of sales’ increase, and are expected to grow in a 40% yearly.
Consumers in Mexico are under 45 years old, having a pretty good balance in terms of gender (55% male and 45 female).
Types of wine consumed (71% red, 11% white, 9% sparkling, and 9% rose and others).
Comparison of wine consumption per capita
Following we share the following available information to illustrate differences between specific countries on current wine consumption per capita.
| Country | Consumption per capita |
| France | 49.5 lts |
| Italy | 43.0 lts |
| Austria | 29.4 lts |
| Spain | 27.8 lts |
| United States | 10.14 lts |
| China | 1.7 lts |
| Brazil | 1.6 lts |
| Mexico | 1.34 lts |
For more information you can visit our country guide on wine distribution in Mexico and watch the following video
Zusammenfassung
Bei der Beendigung von Handelsvertreter- und Vertriebsverträgen ist der Hauptkonfliktpunkt die Entschädigung für den Goodwill (Kundenstamm). Das spanische Gesetz über den Handelsvertretervertrag sieht – ebenso wie die Richtlinie über Handelsvertreter – vor, dass der Handelsvertreter bei Beendigung des Vertrags unter bestimmten Voraussetzungen Anspruch auf einen Ausgleich hat. In Spanien kann dieser Ausgleich analog (wenn auch mit Einschränkungen und Abweichungen ) auch bei Vertriebsverträgen geltend gemacht werden.
Für den Zuspruch eines Kundenausgleichs ist es erforderlich, dass der Handelsvertreter (oder der Vertriebshändler: siehe diesen Beitrag, um mehr zu erfahren) neue Kunden gewonnen oder die Geschäfte mit bereits bestehenden Kunden erheblich ausgeweitet hat, sodass seine Tätigkeit dem Auftraggeber weiterhin erhebliche Vorteile bringen kann. Die Höhe der hierfür zu leistenden Ausgleichszahlung muss angemessen sein. All dies ist Voraussetzung für die Anerkennung des Ausgleichsanspruchs und dessen Höhe.
Diese Begriffe (neue Kunden, erhebliche Ausweitung der Geschäfte mit bestehenden Kunden, wesentliche Vorteile, Angemessenheit der Ausgleichszahlung ) sind im Vorfeld schwer zu definieren, so dass es sich empfiehlt, die Klagen vor Gericht von Fall zu Fall auf Gutachten zu stützen, die von einem Anwalt überwacht werden.
Zumindest in Spanien besteht die Tendenz, direkt den Höchstbetrag zu fordern, den die dort geltende Norm vorsieht (ein Jahresgehalt, das als Durchschnitt der letzten fünf Jahre berechnet wird), ohne eine weitere Analyse vorzunehmen. Bei einem derart pauschalen Vorgehen besteht jedoch die Gefahr, dass ein Richter den Antrag als unbegründet zurückweist.
Aus diesem Grund und aufgrund unserer Erfahrung halte ich es für angebracht, Hinweise zu geben, wie der Anspruch auf Entschädigung und deren Höhe sich im Einzelfall begründen lässt.
Der Vertreter/Händler, der Sachverständige und der Anwalt sollten Folgendes berücksichtigen:
Prüfen Sie, wie hoch der Beitrag des Vertreters war
Entscheidend ist, ob es bereits vor Vertragsbeginn Kunden gab und welches Umsatzvolumen mit ihnen erzielt wurde. Für die Anerkennung dieses Ausgleichs ist es entscheidend ob der Vertreter die Zahl der Kunden erhöht hat oder mit bereits bestehenden Kunden arbeitet.
Analyse des fortlaufenden Kundenwerts für den Auftraggeber
Ihre Wiederkehr, ihre Loyalität (zum Auftraggeber und nicht zum Vermittler), die Abwanderungsrate (wie viele von ihnen werden nach Vertragsabschluss beim Auftraggeber oder beim Vermittler bleiben) – nach all diesen Kriterien bemisst sich der Wert des durch den Vermittler gewonnenen Kundenstamms. In der Tat wird es schwierig sein, von einem „Kundenstamm“ zu sprechen, wenn es sich nur um sporadische, gelegentliche, nicht wiederkehrende oder nur wenige Kunden handelt, oder um Kunden, die in Zukunft dem Handelsvertreter und nicht dem Auftraggeber treu bleiben werden.
Wie verhält sich der Vermittler bei Vertragsende?
Die entscheidende Frage, die sich hier stellt: Kann er mit dem Auftraggeber konkurrieren oder gibt es Einschränkungen im Vertrag? Wenn der Handelsvertreter weiterhin dieselben Kunden betreuen kann, aber für einen anderen Auftraggeber, könnte die Entschädigung sehr wohl diskutiert werden.
Ist die Vergütung angemessen?
Untersuchen Sie hierfür, wie der Vertreter in der Vergangenheit gehandelt hat: Ob er seinen Verpflichtungen nachgekommen ist, wie er beiEinführung der Produkte oder der Markterschließung vorgegangen ist, wie sich diese Produkte oder Dienstleistungen in Zukunft entwickeln könnten usw.
Wird der Vermittler seine Provisionen verlieren?
Hier ist zu prüfen, ob der Vermittler einer Ausschließlichkeitsbindung unterlag , ob es ihm leichter oder schwerer fiel im Anschluss, einen neuen Vertrag zu bekommen (z. B. aufgrund seines Alters, der Wirtschaftskrise, der Art der Produkte usw.) oder ob er eine neue Einnahmequelle hatte, wie sich die Umsätze in den letzten Jahren entwickelt haben (die für eine Entschädigung in Frage kommen) usw.
Welches ist der gesetzliche Höchstwert, der nicht überschritten werden darf?
Der Jahresdurchschnitt der während der Vertragslaufzeit (oder während eines Zeitraums von 5 Jahre, wenn der Vertrag länger dauerte) erhaltenen Beträge. Dazu gehören nicht nur die Provisionen, sondern auch etwaige Festbeträge, Boni, Preise usw. oder Margen im Falle von Vertriebshändlern.
Und schließlich ist es zweckmäßig, alle analysierten Dokumente in den Bericht des Sachverständigen aufzunehmen
Wenn dies nicht geschieht und sie nur erwähnt werden, könnte dies dazu führen, dass sie von einem Richter nicht berücksichtigt werden.
Lesen Sie den praktischen Leitfaden für internationale Agenturvereinbarungen
Weitere Informationen über die wichtigsten Merkmale eines Geschäftsbesorgungsvertrags in Spanien finden Sie in unserem Leitfaden.
Resale prices maintenance on the internet is unlawful while ban on resale on third-party platforms seems to be a new lawful option
In a nutshell
On December 3, 2020 the French Competition Authority (the FCA) :
- reiterated clearly the illegality of behavior aimed at imposing resale prices, especially in e-commerce and then condemned Dammann Frères, a French manufacturer of premium teas, to a € 226,000 fine for imposing minimum online resale prices maintenance on its distributors
- extended the right of ban on resale on third-party platforms from selective distribution of luxury products to quite common commercial relations, and then rejected the alleged illegality of this ban.
Between “recommended” and “imposed” resale prices: a dangerous game to play
Article L 442-6 of French Commercial Code prohibits „imposing, directly or indirectly, a minimum character at the resale price of a good, at the price of a service or at a commercial margin”. The FCA has ruled that, under the pretext of communicating recommended prices to its distributors, Dammann Frères has in fact imposed resale prices on them, failure to comply with these prices being punishable by retaliations (removal or reduction of the amount of discounts granted to them, delay in deliveries, removal of their contact details from the list of distributors presented on its website, disruption of supply, or even termination of commercial relations).
The supplier justified – vainly – this practice by its will to preserve the image and the positioning of its products but above all to avoid excessive price differences between resales by distributors on the internet and those carried out by network stores (where dealers had more latitude in setting prices).
The restriction of competition resulting from resale price maintenance can be obvious when contractual stipulations directly fix the price; but it can be deduced from a set of indices which is characterized according to a method strictly applied by the FCA :
- the supplier communicates its (recommended) resale prices to distributors,
- the latter apply them significantly and,
- a “price policing” system is put in place to prevent the price agreement from being questioned by deviant distributors. This mechanism results in price monitoring by the supplier (or even by other distributors, etc.),
- this leads to pressure, or even retaliation, to force distributors to align their prices upwards, such as delivery delays, supply disruptions, removal of discounts, etc.
There is a fine line between a price surveillance mechanism and a price constraint mechanism. This legal insecurity has been criticized and the European Commission could provide, on the occasion of the upcoming reform of the European block exemption regulation on vertical restraints, additional advice on the circumstances in which recommended resale prices should be qualified as imposed resale prices. The reform expected in 2022 could even go further by highlighting the pro-competitive effects of resale price maintenance.
Ban on resale on third-party platforms: a serious option to consider
With regard to the ban on the resale of its products on third-party platforms, openly imposed by Dammann Frères, the FCA took a rather liberal and innovative approach by applying the rules of the Coty case law (ruling of 6 12 2017, Coty Germany GmbH, C 230/16) to decide ultimately that there is no need to prosecute and therefore to fine. If this approach is confirmed later on by French courts, it will have a considerable impact on suppliers ‘policy who seek to control and restrict the terms of resale of their products on third-party platforms such as Amazon or e-Bay.
In this case, the FCA noted that the tea manufacturer’s market share was less than 30% and that this restriction did not constitute a hardcore restriction. Indeed, the FCA noted that this practice (i) did not prohibit distributors from selling products online nor from marketing themselves through third party websites (advertising and use of search engines) and (ii) did not constitute a restriction on the number of distributors, as the prosecution file did not evidence the number of customers of these platforms amongst the group of online buyers.
The FCA’s decision is therefore extends the Coty case law according to which the supplier of a selective distribution network for luxury products can prohibit the resale of its products on third-party platforms in order to preserve the image of its products (see our comments Here).
The FCA had already extended the Coty case law to technical products in a decision of 24 October 2018 (n ° 18-D-23), concerning the practices of the company Stihl, leader in mechanized garden equipment (mainly confirmed on appeal, Paris court of appeal 17 10 19), where the FCA, in a premonitory manner, stated: “it is important to specify that the analysis carried out by the Court of justice in the Coty ruling for the online marketing of luxury products seems likely to be extended to other types of products ”(see our comments Here).
The FCA is now going even further because, even though Dammann Frères teas are “high-end” positioned, they are neither luxury products nor even distributed through a selective distribution network.
Key takeaway
As part of its relations with its distributors, the supplier must ensure:
- not to stipulate any express minimum resale price clause;
- not to implement a system, nor tolerate practices, of commercial retaliation against distributors deviating from the minimum „recommended“ prices (or even threaten them to do so);
- not to prohibit them from selling the products online or from advertising online;
- carefully examine the possibility of prohibiting them from reselling its products on third-party platforms.
International debt recovery is perhaps one of the most challenging issues in business. Companies are usually excited when starting their new international ventures, but when payments of distributors, clients, franchisees… stop, difficulties arise, particularly when they happen abroad. Recovery is most of the times complicated, causes expenses, nightmares and sometimes undertakings simply decide to give up. We herein provide some tips to consider in the prevention phase.
The following is a summary of the ideas which were discussed in a webinar organized by Legalmondo and the Chamber of Commerce of Treviso/Belluno in Italy in November 11, 2020.
What are the best practices to manage international receivables?
The first question regards the best practices companies could put into practice to avoid or, at least, to try to minimize the impact of lack of payment when international businesses are concerned.
The following main points were mentioned as worth considering at an early status of the negotiations and business development.
Verification of the identity of the company
Who is the company we are dealing with? It is important to check its existence, legal situation and capacity to carry on business. And also, the faculties or authorization of the person signing the type of contract. Is this the right authorized person? Has this person followed the legal requirements to do it? In particular, during this period of international pandemic, when the electronic signatures are used and when agreements are frequently signed with non-original signatures but only on pdf documents.
Request of financial information
What is the credit rating of the company? Seek to obtain official accounting information, either filed with the register of companies (when possible according to the local rules), or through private investigation research: tax regularity certificate to attest that the company is in compliance with applicable rules (in places when this is possible), comfort letters from shareholders or third parties (banks)… It is important to have a reasonable certitude about the capacity of that company to carry on the concrete business. And when possible, to do it on a regular basis.
Use the right contract
What is the correct type of contract for the commercial relationship? Seek advice from a lawyer specialized in the law of the country where the debt will be collected. This will be an essential element, for example, to know when the ownership of the acquired asset is legally transferred; when the parties have agreed to pay the invoices; the validity of the general conditions (or if they have to be drafted in the local language or in the language of the negotiations or what happens when they are contradictory: the seller’s and the purchaser’s); whether this is a distribution contract or a mere supply of products and the related obligations and consequences depending on the applicable law…
Write down your agreements
Avere le condizioni per iscritto non solo sul tipo di contratto ma anche sulle modalità, condizioni e ritardi di pagamento. Ed essere consapevoli del tipo di documenti necessari per la validità dell’accordo. Uno scambio di e-mail creerebbe un obbligo? Sarebbero necessari passaggi più formali per avere un contratto / obbligo valido (notaio, registrazione, firma separata di alcune condizioni)?
Follow your contract
If there is a contract in place, it is important to follow what has been signed or agreed, to ensure that these conditions are then respected. A different and sustained commercial practice could imply a tacit change the original written agreement.
Document all transactions
From the order by the client/distributor, its acceptance by the manufacturer, the transport document, linked to the receipt of goods, and until the final invoice, all paperwork should be clear and consistent. In case of lack of payment, all these documents might be necessary to prove the correct performance of the contract.
Has the debtor risen objections?
Also check your own defaults. It is quite frequent that the non-paying party justifies its decision on a previous breaching. If there is such previous alleged infringement by a supplier, for instance (related to the shipment of goods: delays, defective products, etc.), it will be probably more complicated to ask for the payment from the distributor or, at least, it will be required an additional procedure.
Be clear on the accrual of interests for late payments
In EU countries, legislation based on the 2011/7 Directive allows to combat late payment in commercial transactions with special interest rates: make sure this is mentioned in the contract, as non-EU based companies might not be aware of this, and the difference with the general legal interest can be substantial.
Seek guarantees for your credits
This obviously can vary depending on the type of contract and the relationship between the parties. A guarantee is advisable not only at the beginning, but also when the relationship lasts for several years. Sometimes, trust in your counterparty in the past makes more difficult to ask for additional guaranties and this could imply that late payments are not correctly managed.
Consider also additional guaranties on sold goods such as, when permitted by the law, retention of title. This will imply that the ownership remains in the vendor’s hand until the complete payment. In some cases, it is also possible to have additional guarantees when the retention of title can be registered at special public registries. These special conditions should also be verified locally in order to know their extent and to respect the way they shall be agreed, accepted, and documented.
Check out our webinar on debt collection
On November 11, 2020, I had the pleasure to participate to the webinar on International Debt Collection organized by the Chamber of Commerce of Treviso and Belluno and Legalmondo: we discuss the best practices and share practical information on debt collection in Spain, Germany, France, USA, China, Vietnam and Singapore.
You can watch the recording of the webinar here.
Legalmondo’s helpdesk on international credit collection
If you would like to know more about how to collect a debt overseas, you can find the reports of our experts from 20 countries here.
Under Vietnam’s presidency of the Association of South East Asian Nations (ASEAN), after eight years of negotiations, the ten ASEAN member states (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam) on 15 November 2020 signed a groundbreaking free trade agreement (FTA) with China, Japan, South Korea, Australia and New Zealand, called Regional Comprehensive Economic Partnership (RCEP).
The ASEAN economic community is a free trade area kickstarted in 2015 among the above-mentioned ten members of the homonymous association, comprising an aggregate GDP of US$2.6 trillion and over 622 million people. ASEAN is China’s main trading partner, with the European Union now slipping into second place.
Unlike the EuroZone and the European Union, ASEAN does not have a single currency, nor common institutions, like the EU Commission, Parliament and Council. Similarly to what happens in the EU, though, a single member holds a rotational presidency.
Individual ASEAN Countries, like Vietnam and Singapore, have recently entered into free trade agreements with the European Union, whilst the entire ASEAN block had and still has in place the so-called “plus one” agreements with other regional Countries, namely The People’s Republic of China, Hong Kong, The Republic of Korea, India, Japan and Australia and New Zealand together.
With the exception of India, all the other Countries with “plus one” agreements with ASEAN are now part of the RCEP, which will gradually overtake individual FTAs through the harmonisation of rules, especially those related to origin.
RCEP negotiations accelerated with the United States of America’s decision to withdraw from the Trans-Pacific Partnership (TPP) upon the election of President Trump in 2016 (although it is worth noting that a large part of the US Democratic Party also opposed the TPP).
The TPP would have then been the largest free trade agreement ever and, as the name suggest, would have put together twelve nations on the Pacific Ocean, namely Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam, and the USA. With the exclusion of the latter, the other eleven did indeed sign a similar agreement, called Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
The CPTPP has however been ratified only by seven of its signatories and clearly lacks the largest economy and most significant partner of all. At the same time, both the aborted TPP and the CPTPP evidently exclude China.
The RCEP’s weight is therefore self evidently heavier, as it encompasses 2.1 billion people, with its signatories accounting for around 30% of the world’s GDP. And the door for India’s 1.4 billion people and US$2.6 trillion GDP remains open, the other members stated.
Like most FTAs, RCEP’s aim is to lower tariffs, open up trade in goods and services and promote investments. It also briefly covers intellectual property, but makes no mention of environmental protections and labour rights. Its signatories include very advanced economies, like Singapore’s, and quite poor ones, like Cambodia’s.
RCEP’s significance is at this very moment probably more symbolic than tangible. Whilst it is estimated that around 90% of tariffs will be abolished, this will only occur over a period of twenty years after entry into force, which will happen only after ratification. Furthermore, the service industry and even more notably agriculture do not represent the core of the agreement and therefore will still be subject to barriers and domestic rules and restrictions. Nonetheless, it is estimated that, even in these times of pandemic, the RCEP will contribute some US$40billion more, annually, to the world’s GDP, than the CPTPP does (US$186billion vis-à-vis US$147billion) for ten consecutive years.
Its immediate impact is geopolitical. Whilst signatories are not exactly best friends with each other (think of territorial disputes over the South China Sea, for instance), the message is clear:
- The majority of this part of the world has tackled the Covid-19 pandemic remarkably well, but cannot afford to open its borders to Europeans and Americans any time soon, lest the virus spread again. Therefore, it has to try and iron out internal tensions, if it wants to see some positive signs within its economies given by private trade, in addition to (not always good) deficit spending by the State. Most of these Countries do rely heavily on Western talents, tourists, goods, services and even strategic and military support, but they are realistic about the fact that, unless the much touted vaccine works really well really soon, the West will struggle with this coronavirus for many months, if not years.
- Multilateralism is key and isolationism is dangerous. The ASEAN bloc and the Australia-New Zealand duo work exactly in this peaceful and pro-business direction.
The ASEAN’s official website (https://asean.org/?static_post=rcep-regional-comprehensive-economic-partnership) is very clear in this regard and states, in fact that:
RCEP will provide a framework aimed at lowering trade barriers and securing improved market access for goods and services for businesses in the region, through:
- Recognition to ASEAN Centrality in the emerging regional economic architecture and the interests of ASEAN’s FTA partners in enhancing economic integration and strengthening economic cooperation among the participating countries;
- Facilitation of trade and investment and enhanced transparency in trade and investment relations between the participating countries, as well as facilitation of SMEs‘ engagements in global and regional supply chains; and
- Broaden and deepen ASEAN’s economic engagements with its FTA partners.
RCEP recognises the importance of being inclusive, especially to enable SMEs leverage on the agreement and cope with challenges arising from globalisation and trade liberalisation. SMEs (including micro-enterprises) make up more than 90% of business establishments across all RCEP participating countries and are important to every country’s endogenous development of their respective economy. At the same time, RCEP is committed to provide fair regional economic policies that mutually benefit both ASEAN and its FTA partners.
Still, the timing is right also for EU businesses. As mentioned, the EU has in place FTAs with Singapore, South Korea, Vietnam, an Economic Partnership Agreement with Japan, and is negotiating separately with both Australia and New Zealand.
Generally, all these agreements create common rules for all the players involved, thus making it is simpler for companies to trade in different territories. With caveats on entry into force and rules of origin, Countries that have signed both an FTA with the EU and the RCEP, notably Singapore, a major English speaking hub, that ranks first in East Asia in the Rule of Law index (third in the region after New Zealand and Australia and twelfth worldwide: https://worldjusticeproject.org/sites/default/files/documents/Singapore%20-%202020%20WJP%20Rule%20of%20Law%20Index%20Country%20Press%20Release.pdf), could bridge both regions and facilitate global trade even during these challenging times.
The Milestone EU-Mercosur Trade Deal
- Vertrieb
- Auslandsinvestitionen
-
Argentinien -
Brasilien -
Italien -
Uruguay
Germany – To which product category do Cannabidiol spray products belong?
- Vertrieb
- Arzneimittelrecht
-
Deutschland
Spanien 
France: Ambush marketing and the Paris 2024 Olympic Games
- Vertrieb
- Markenzeichen und Patente
-
Frankreich
Deutschland – Verbot von Preisvergleichsmaschinen und Werbung auf Plattformen Dritter
- e-Commerce
- Vertrieb
-
Deutschland
P2B Regulation – How to adapt Platform services and Search Engines
- Alternative Streitbeilegung
- Vertrieb
-
Europa
Germany – Distribution, Franchise Agreements and Goodwill Indemnity at Termination
- Vertrieb
-
Deutschland
Germany – Termination of distribution agreements: Can dealers claim delivery anyway?
- Vertrieb
-
Deutschland
Schreiben Sie an Christophe
The Distribution of wine in Mexico
7 März 2021
-
Mexiko
- Vertrieb
Der Gerichtshof der Europäischen Union („EuGH„) hat ein neues Urteil zum internationalen Anwendungsbereich der Handelsvertreterrichtlinie (86/653/EWG vom 18. Dezember 1986) gefällt. Die neue Entscheidung steht im Einklang mit den Urteilen
- des EuGHs in den Rechtssachen Ingmar (Entscheidung vom 9. November 2000, C-381/98, obligatorischer Ausgleich des Firmenwerts, wenn der Handelsvertreter innerhalb der EU handelt) und Unamar (Entscheidung vom 17. Oktober 2013, C-184/12, zur Frage, ob das nationale Handelsvertreterrecht zwingend ist, wenn der Mindestschutz der Handelsvertreterrichtlinie überschritten wird) und
- des Bundesgerichtshofs vom 5. September 2012 (deutsches Handelsvertreterrecht als zwingendes Recht gegenüber Lieferanten in Drittstaaten mit Gerichtsstandsklausel).
Die Frage
Der EuGH hatte nun zu entscheiden, ob ein Handelsvertreter, der in der Türkei für einen in Belgien ansässigen Lieferanten tätig ist, auf der Grundlage der Handelsvertreterrichtlinie einen Anspruch auf Ausgleich des Firmenwerts geltend machen kann. Konkret ging es um die Frage, ob der territoriale Anwendungsbereich der Handelsvertreterrichtlinie gegeben ist, wenn der Handelsvertreter in einem Drittland und der Lieferant innerhalb der EU tätig ist – der gegensätzliche Fall zur Ingmar-Entscheidung.
Der Sachverhalt
Nach dem Handelsvertretervertrag galt belgisches Recht, und die Gerichte in Gent (Belgien) sollten zuständig sein. Das belgische Recht, das die Richtlinie über Handelsvertreter umsetzt, sieht bei Beendigung des Vertrags einen Anspruch auf eine Entschädigung für den Geschäftswert (und darüber hinaus einen Anspruch auf Schadensersatz) vor. Das vorlegende Gericht vertrat jedoch die Auffassung, dass das belgische Handelsvertretergesetz von 1995 eine Selbstbeschränkung darstellt und gemäß seinem Art. 27 nur dann anwendbar ist, wenn der Handelsvertreter in Belgien tätig war. Andernfalls würde das allgemeine belgische Recht gelten.
Die Entscheidung
Der EuGH entschied, dass die Parteien von der Handelsvertreterrichtlinie abweichen können, wenn der Vertreter in einem Drittland (d. h. außerhalb der EU) tätig ist. Dies war hier der Fall, da der Vertreter in der Türkei tätig war.
Die Entscheidung ist besonders bemerkenswert, weil sie – eher nebenbei – die Ingmar-Entscheidung des EuGH zur Rom I-Verordnung fortschreibt (I.). Darüber hinaus bestätigt sie indirekt §. 92c HGB (II.) – der es den Parteien eines Handelsvertretervertrags nach deutschem Recht ermöglicht, vom allgemein zwingenden Handelsvertreterrecht abzuweichen, wenn der Handelsvertreter außerhalb des Europäischen Wirtschaftsraums („EWR„) tätig ist. Schließlich schafft er Rechtssicherheit für den Vertrieb außerhalb des EWR und zeigt auf, was sich nach einem Brexit für im Vereinigten Königreich tätige Handelsvertreter ändern kann (III.) – wenn die EU und das Vereinigte Königreich keine Übergangsregelungen treffen.
Zu den Einzelheiten siehe den Beitrag von Benedikt Rohrßen, Zeitschrift für Vertriebsrecht 2017, 186 ff. („Ingmar reloaded – Handelsvertreter-Ausgleich bei umgekehrter Ingmar-Konstellation nicht international zwingend„).
Summary
Political, environmental or health crises (like the Covid-19 outbreak and the attack of Ukraine by the Russian army) can cause an increase in the price of raw materials and components and generalized inflation. Both suppliers and distributors find themselves faced with problems related to the often sudden and very substantial increase in the price of their own supplies. French law lays down specific rules in that regard.
Two main situations can be distinguished: where the parties have just established a simple flow of orders and where the parties have concluded a framework agreement fixing firm prices for a fixed term.
Price increase in a business relationship
The situation is as follows: the parties have not concluded a framework agreement, each sales contract concluded (each order) is governed by the General T&Cs of the supplier; the latter has not undertaken to maintain the prices for a minimum period and applies the prices of the current tariff.
In principle, the supplier can modify its prices at any time by sending a new tariff. However, it must give written and reasonable notice in accordance with the provisions of Article L. 442-1.II of the Commercial Code, before the price increase comes into effect. Failure to respect sufficient notice, it could be accused of a sudden „partial“ termination of commercial relations (and subject to damages).
A sudden termination following a price increase would be characterized when the following conditions are met:
- the commercial relationship must be established: broader concept than the simple contract, taking into account the duration but also the importance and the regularity of the exchanges between the parties;
- the price increase must be assimilated to a rupture: it is mainly the size of the price increase (+1%, 10% or 25%?) that will lead a judge to determine whether the increase constitutes a „partial“ termination (in the event of a substantial modification of the relationship which is nevertheless maintained) or a total termination (if the increase is such that it involves a termination of the relationship) or if it does not constitute a termination (if the increase is minimal);
- the notice granted is insufficient by comparing the duration of the notice actually granted with that of the notice in accordance with Article L. 442-1.II, taking into account in particular the duration of the commercial relationship and the possible dependence of the victim of the termination with respect to the other party.
Article L. 442-1.II must be respected as soon as French law applies to the relation. In international business relations, to know how to deal with Article L.442-1.II and conflicts of laws and jurisdiction of competent courts, please see our previous article published on Legalmondo blog.
Price increase in a framework contract
If the parties have concluded a framework contract (such as supply, manufacturing, …) for several years and the supplier has committed to fixed prices, how, in this case, can it change these prices?
In addition to any indexation clause or renegotiation (hardship) clause which would be stipulated in the contract (and besides specific legal provisions applicable to special agreements as to their nature or economic sector), the supplier may seek to avail himself of the legal mechanism of „unforeseeability“ provided for by article 1195 of the civil code.
Three prerequisites must be cumulatively met:
- an unforeseeable change in circumstances at the time of the conclusion of the contract (i.e.: the parties could not reasonably anticipate this upheaval);
- a performance of the contract that has become excessively onerous (i.e.: beyond the simple difficulty, the upheaval must cause a disproportionate imbalance);
- the absence of acceptance of these risks by the debtor of the obligation when concluding the contract.
The implementation of this mechanism must stick to the following steps:
- first, the party in difficulty must request the renegotiation of the contract from its co-contracting party;
- then, in the event of failure of the negotiation or refusal to negotiate by the other party, the parties can (i) agree together on the termination of the contract, on the date and under the conditions that they determine, or (ii) ask together the competent judge to adapt it;
- finally, in the absence of agreement between the parties on one of the two aforementioned options, within a reasonable time, the judge, seized by one of the parties, may revise the contract or terminate it, on the date and under the conditions that he will set.
The party wishing to implement this legal mechanism must also anticipate the following points:
- article 1195 of the Civil Code only applies to contracts concluded on or after October 1, 2016 (or renewed after this date). Judges do not have the power to adapt or rebalance contracts concluded before this date;
- this provision is not of public order. Therefore, the parties can exclude it or modify its conditions of application and/or implementation (the most common being the framework of the powers of the judge);
- during the renegotiation, the supplier must continue to sell at the initial price because, unlike force majeure, unforeseen circumstances do not lead to the suspension of compliance with the obligations.
Key takeaways:
- analyse carefully the framework of the commercial relationship before deciding to notify a price increase, in order to identify whether the prices are firm for a minimum period and the contractual levers for renegotiation;
- correctly anticipate the length of notice that must be given to the partner before the entry into force of the new pricing conditions, depending on the length of the relationship and the degree of dependence;
- document the causes of the price increase;
- check if and how the legal mechanism of unforeseeability has been amended or excluded by the framework contract or the General T&Cs;
- consider alternatives strategies, possibly based on stopping production/delivery justified by a force majeure event or on the significant imbalance of the contractual provisions.
Under French Law, franchisors and distributors are subject to two kinds of pre-contractual information obligations: each party has to spontaneously inform his future partner of any information which he knows is decisive for his consent. In addition, for certain contracts – i.e franchise agreement – there is a duty to disclose a limited amount of information in a document. These pre-contractual obligations are mandatory. Thus these two obligations apply simultaneously to the franchisor, distributor or dealer when negotiating a contract with a partner.
General duty of disclosure for all contractors
What is the scope of this pre-contractual information?
This obligation is imposed on all co-contractors, to any kind of contract. Indeed, article 1112-1 of the Civil Code states that:
(§. 1) The party who knows information of decisive importance for the consent of the other party must inform the other party if the latter legitimately ignores this information or trusts its co-contractor.
(§. 3) Of decisive importance is the information that is directly and necessarily related to the content of the contract or the quality of the parties. »
This obligation applies to all contracting parties for any type of contract.
Who must prove the compliance with such provision ?
The burden of proof rests on the person who claims that the information was due to him. He must then prove (i) that the other party owed him the information but (ii) did not provide it (Article 1112-1 (§. 4) of the Civil Code)
Special duty of disclosure for franchise and distribution agreements
Which contracts are subject to this special rule?
French law requires (art. L.330-3 French Commercial Code) communication of a pre-contractual information document (in French “DIP”) and the draft contract, by any person:
- which grants another person the right to use a trade mark, trade name or sign,
- while requiring an exclusive or quasi-exclusive commitment for the exercise of its activity (e.g. exclusive purchase obligation).
Concretely, DIP must be provided, for example, to the franchisee, distributor, dealer or licensee of a brand, by its franchisor, supplier or licensor as soon as the two above conditions are met.
When the DIP must be provided?
DIP and draft contract must be provided at least 20 days before signing the contract, and, where applicable, before the payment of the sum required to be paid prior to the signature of the contract (for a reservation).
What information must be disclosed in the DIP?
Article R. 330-1 of the French Commercial Code requires that DIP mentions the following information (non-detailed list) concerning:
- Franchisor (identity and experience of the managers, career path, etc.);
- Franchisor’s business (in particular creation date, head office, bank accounts, historical of the development of the business, annual accounts, etc.);
- Operating network (members list with indication of signing date of contracts, establishments list offering the same products/services in the area of the planned activity, number of members having ceased to be part of the network during the year preceding the issue of the DIP with indication of the reasons for leaving, etc.);
- Trademark licensed (date of registration, ownership and use);
- General state of the market (about products or services covered by the contract)and local state of the market (about the planned area) and information relating to factors of competition and development perspective;
- Essential element of the draft contract and at least: its duration, contract renewal conditions, termination and assignment conditions and scope of exclusivities;
- Financial obligations weighing in on contracting party: nature and amount of the expenses and investments that will have to be incurred before starting operations (up-front entry fee, installation costs, etc.).
How to prove the disclosure of information?
The burden of proof for the delivery of the DIP rests on the debtor of this obligation: the franchisor (Cass. Com., 7 July 2004, n°02-15.950). The ideal for the franchisor is to have the franchisee sign and date his DIP on the day it is delivered and to keep the proof thereof.
The clause of contract indicating that the franchisee acknowledges having received a complete DIP does not provide proof of the delivery of a complete DIP (Cass. com, 10 January 2018, n° 15-25.287).
Sanction for breach of pre-contractual information duties
Criminal sanction
Failing to comply with the obligations relating to the DIP, franchisor or supplier can be sentenced to a criminal fine of up to 1,500 euros and up to 3,000 euros in the event of a repeat offence, the fine being multiplied by five for legal entities (article R.330-2 French commercial Code).
Cancellation of the contract for deceit
The contract may be declared null and void in case of breach of either article 1112-1 or article L. 330-3. In both cases, failure to comply with the obligation to provide information is sanctioned if the applicant demonstrates that his or her consent has been vitiated by error, deceit or violence. Where applicable, the parties must return to the state they were in before the contract.
Regarding deceit, Courts strictly assess its two conditions which are:
- (a material element) the existence of a lie or deceptive reticence (article 1137 French Civil Code);
- And (an intentional element) the intention to deceive his co-contractor (article 1130 French Civil Code).
Damages
Although the claims for contract cancellation are subject to very strict conditions, it remains that franchisees/distributors may alternatively obtain damages on the basis of tort liability for non-compliance with the pre-contractual information obligation, subject to proof of fault (incomplete or incorrect information), damage (loss of chance of not contracting or contracting on more advantageous terms) and the causal link between the two.
French case law
Franchisee/distributor must demonstrate that he would not have actually entered into the contract if he had had the missing or correct information
Courts reject motion for cancellation of a franchise contract when the franchisee cannot prove that this deceit would have misled its consent or that it would not have entered into the contract if it had had such information (for instance: Versailles Court of Appeal, December 3, 2020, no. 19/01184).
The significant experience of the franchisee/distributor greatly mitigates the possible existence of a defect in consent.
In a ruling of January 20, 2021 (no. 19/03382) the Paris Court of Appeal rejected an application for cancellation of a franchise contract where the franchisor had submitted a DIP manifestly and deliberately deficient and an overly optimistic turnover forecast.
Thus, while the presentation of the national market was not updated and too vague and that of the local market was just missing, the Court rejected the legal qualification of the franchisee’s error or the franchisor’s willful misrepresentation, because the franchisee „had significant experience“ for several years in the same sector (See another example for a Master franchisee)
Similarly, the Court reminds that “An error concerning the profitability of the concept of a franchise cannot lead to the nullity of the contract for lack of consent of the franchisee if it does not result from data established and communicated by the franchisor„, it does not accept the error resulting from the communication by the franchisor of a very optimistic turnover forecast tripling in three years. Indeed, according to the Court, „the franchisee’s knowledge of the local market was likely to enable it to put the franchisor’s exaggerations into perspective, at least in part. The franchisee was well aware that the forecast document provided by the franchisor had no contractual value and did not commit the franchisor to the announced results. It was in fact the franchisee’s responsibility to conduct its own market research, so that if the franchisee misunderstood the profitability of the operation at the business level, this error was not caused by information prepared and communicated by the franchisor„.
The path is therefore narrow for the franchisee: he cannot invoke error concerning profitability when it is him who draws up his plan, and even when this plan is drawn up by the franchisor or based on information drawn up and transmitted by the franchisor, the experience of the franchisee who knew the local market may exonerate the franchisor.
Takeaways
- The information required by the DIP must be fully completed and updated ;
- The information not required by the DIP but communicated by the franchisor must be carefully selected and sincere;
- Franchisee must be given the opportunity to request additional information from the franchisor;
- Franchisee’s experience in the economic sector enables the franchisor to considerably limit its exposure to the risk of contract cancellation due to a defect in the franchisee’s consent;
- Franchisor must keep the proof of the actual disclosure of pre-contractual information (whether mandatory or not).
Wine Market in Mexico 2020-2021
The wine market in Mexico has shown an annual growth of approximately 8% during the past 5 years.
Importations have increased during the past 10 years, increasing its value in 88%.
Mexico has the second highest consumption growth rate worldwide according to the International Organization of Vine and Wine (OIV).
Current Trends in Mexico
Mexican wines accounted for 29% of Mexico’s consumption, while the remaining 71% corresponds to imported wines.
Wine consumption is primarily concentrated in 3 cities, Mexico City, Monterrey, and Guadalajara, with a potential increase in touristic locations.
Due to the health contingency generated as a result of the COVID19, on-line sales of the various supermarkets have increased in 300% during 2020.
Digitalization of processes represents a huge potential in terms of sales’ increase, and are expected to grow in a 40% yearly.
Consumers in Mexico are under 45 years old, having a pretty good balance in terms of gender (55% male and 45 female).
Types of wine consumed (71% red, 11% white, 9% sparkling, and 9% rose and others).
Comparison of wine consumption per capita
Following we share the following available information to illustrate differences between specific countries on current wine consumption per capita.
| Country | Consumption per capita |
| France | 49.5 lts |
| Italy | 43.0 lts |
| Austria | 29.4 lts |
| Spain | 27.8 lts |
| United States | 10.14 lts |
| China | 1.7 lts |
| Brazil | 1.6 lts |
| Mexico | 1.34 lts |
For more information you can visit our country guide on wine distribution in Mexico and watch the following video
Zusammenfassung
Bei der Beendigung von Handelsvertreter- und Vertriebsverträgen ist der Hauptkonfliktpunkt die Entschädigung für den Goodwill (Kundenstamm). Das spanische Gesetz über den Handelsvertretervertrag sieht – ebenso wie die Richtlinie über Handelsvertreter – vor, dass der Handelsvertreter bei Beendigung des Vertrags unter bestimmten Voraussetzungen Anspruch auf einen Ausgleich hat. In Spanien kann dieser Ausgleich analog (wenn auch mit Einschränkungen und Abweichungen ) auch bei Vertriebsverträgen geltend gemacht werden.
Für den Zuspruch eines Kundenausgleichs ist es erforderlich, dass der Handelsvertreter (oder der Vertriebshändler: siehe diesen Beitrag, um mehr zu erfahren) neue Kunden gewonnen oder die Geschäfte mit bereits bestehenden Kunden erheblich ausgeweitet hat, sodass seine Tätigkeit dem Auftraggeber weiterhin erhebliche Vorteile bringen kann. Die Höhe der hierfür zu leistenden Ausgleichszahlung muss angemessen sein. All dies ist Voraussetzung für die Anerkennung des Ausgleichsanspruchs und dessen Höhe.
Diese Begriffe (neue Kunden, erhebliche Ausweitung der Geschäfte mit bestehenden Kunden, wesentliche Vorteile, Angemessenheit der Ausgleichszahlung ) sind im Vorfeld schwer zu definieren, so dass es sich empfiehlt, die Klagen vor Gericht von Fall zu Fall auf Gutachten zu stützen, die von einem Anwalt überwacht werden.
Zumindest in Spanien besteht die Tendenz, direkt den Höchstbetrag zu fordern, den die dort geltende Norm vorsieht (ein Jahresgehalt, das als Durchschnitt der letzten fünf Jahre berechnet wird), ohne eine weitere Analyse vorzunehmen. Bei einem derart pauschalen Vorgehen besteht jedoch die Gefahr, dass ein Richter den Antrag als unbegründet zurückweist.
Aus diesem Grund und aufgrund unserer Erfahrung halte ich es für angebracht, Hinweise zu geben, wie der Anspruch auf Entschädigung und deren Höhe sich im Einzelfall begründen lässt.
Der Vertreter/Händler, der Sachverständige und der Anwalt sollten Folgendes berücksichtigen:
Prüfen Sie, wie hoch der Beitrag des Vertreters war
Entscheidend ist, ob es bereits vor Vertragsbeginn Kunden gab und welches Umsatzvolumen mit ihnen erzielt wurde. Für die Anerkennung dieses Ausgleichs ist es entscheidend ob der Vertreter die Zahl der Kunden erhöht hat oder mit bereits bestehenden Kunden arbeitet.
Analyse des fortlaufenden Kundenwerts für den Auftraggeber
Ihre Wiederkehr, ihre Loyalität (zum Auftraggeber und nicht zum Vermittler), die Abwanderungsrate (wie viele von ihnen werden nach Vertragsabschluss beim Auftraggeber oder beim Vermittler bleiben) – nach all diesen Kriterien bemisst sich der Wert des durch den Vermittler gewonnenen Kundenstamms. In der Tat wird es schwierig sein, von einem „Kundenstamm“ zu sprechen, wenn es sich nur um sporadische, gelegentliche, nicht wiederkehrende oder nur wenige Kunden handelt, oder um Kunden, die in Zukunft dem Handelsvertreter und nicht dem Auftraggeber treu bleiben werden.
Wie verhält sich der Vermittler bei Vertragsende?
Die entscheidende Frage, die sich hier stellt: Kann er mit dem Auftraggeber konkurrieren oder gibt es Einschränkungen im Vertrag? Wenn der Handelsvertreter weiterhin dieselben Kunden betreuen kann, aber für einen anderen Auftraggeber, könnte die Entschädigung sehr wohl diskutiert werden.
Ist die Vergütung angemessen?
Untersuchen Sie hierfür, wie der Vertreter in der Vergangenheit gehandelt hat: Ob er seinen Verpflichtungen nachgekommen ist, wie er beiEinführung der Produkte oder der Markterschließung vorgegangen ist, wie sich diese Produkte oder Dienstleistungen in Zukunft entwickeln könnten usw.
Wird der Vermittler seine Provisionen verlieren?
Hier ist zu prüfen, ob der Vermittler einer Ausschließlichkeitsbindung unterlag , ob es ihm leichter oder schwerer fiel im Anschluss, einen neuen Vertrag zu bekommen (z. B. aufgrund seines Alters, der Wirtschaftskrise, der Art der Produkte usw.) oder ob er eine neue Einnahmequelle hatte, wie sich die Umsätze in den letzten Jahren entwickelt haben (die für eine Entschädigung in Frage kommen) usw.
Welches ist der gesetzliche Höchstwert, der nicht überschritten werden darf?
Der Jahresdurchschnitt der während der Vertragslaufzeit (oder während eines Zeitraums von 5 Jahre, wenn der Vertrag länger dauerte) erhaltenen Beträge. Dazu gehören nicht nur die Provisionen, sondern auch etwaige Festbeträge, Boni, Preise usw. oder Margen im Falle von Vertriebshändlern.
Und schließlich ist es zweckmäßig, alle analysierten Dokumente in den Bericht des Sachverständigen aufzunehmen
Wenn dies nicht geschieht und sie nur erwähnt werden, könnte dies dazu führen, dass sie von einem Richter nicht berücksichtigt werden.
Lesen Sie den praktischen Leitfaden für internationale Agenturvereinbarungen
Weitere Informationen über die wichtigsten Merkmale eines Geschäftsbesorgungsvertrags in Spanien finden Sie in unserem Leitfaden.
Resale prices maintenance on the internet is unlawful while ban on resale on third-party platforms seems to be a new lawful option
In a nutshell
On December 3, 2020 the French Competition Authority (the FCA) :
- reiterated clearly the illegality of behavior aimed at imposing resale prices, especially in e-commerce and then condemned Dammann Frères, a French manufacturer of premium teas, to a € 226,000 fine for imposing minimum online resale prices maintenance on its distributors
- extended the right of ban on resale on third-party platforms from selective distribution of luxury products to quite common commercial relations, and then rejected the alleged illegality of this ban.
Between “recommended” and “imposed” resale prices: a dangerous game to play
Article L 442-6 of French Commercial Code prohibits „imposing, directly or indirectly, a minimum character at the resale price of a good, at the price of a service or at a commercial margin”. The FCA has ruled that, under the pretext of communicating recommended prices to its distributors, Dammann Frères has in fact imposed resale prices on them, failure to comply with these prices being punishable by retaliations (removal or reduction of the amount of discounts granted to them, delay in deliveries, removal of their contact details from the list of distributors presented on its website, disruption of supply, or even termination of commercial relations).
The supplier justified – vainly – this practice by its will to preserve the image and the positioning of its products but above all to avoid excessive price differences between resales by distributors on the internet and those carried out by network stores (where dealers had more latitude in setting prices).
The restriction of competition resulting from resale price maintenance can be obvious when contractual stipulations directly fix the price; but it can be deduced from a set of indices which is characterized according to a method strictly applied by the FCA :
- the supplier communicates its (recommended) resale prices to distributors,
- the latter apply them significantly and,
- a “price policing” system is put in place to prevent the price agreement from being questioned by deviant distributors. This mechanism results in price monitoring by the supplier (or even by other distributors, etc.),
- this leads to pressure, or even retaliation, to force distributors to align their prices upwards, such as delivery delays, supply disruptions, removal of discounts, etc.
There is a fine line between a price surveillance mechanism and a price constraint mechanism. This legal insecurity has been criticized and the European Commission could provide, on the occasion of the upcoming reform of the European block exemption regulation on vertical restraints, additional advice on the circumstances in which recommended resale prices should be qualified as imposed resale prices. The reform expected in 2022 could even go further by highlighting the pro-competitive effects of resale price maintenance.
Ban on resale on third-party platforms: a serious option to consider
With regard to the ban on the resale of its products on third-party platforms, openly imposed by Dammann Frères, the FCA took a rather liberal and innovative approach by applying the rules of the Coty case law (ruling of 6 12 2017, Coty Germany GmbH, C 230/16) to decide ultimately that there is no need to prosecute and therefore to fine. If this approach is confirmed later on by French courts, it will have a considerable impact on suppliers ‘policy who seek to control and restrict the terms of resale of their products on third-party platforms such as Amazon or e-Bay.
In this case, the FCA noted that the tea manufacturer’s market share was less than 30% and that this restriction did not constitute a hardcore restriction. Indeed, the FCA noted that this practice (i) did not prohibit distributors from selling products online nor from marketing themselves through third party websites (advertising and use of search engines) and (ii) did not constitute a restriction on the number of distributors, as the prosecution file did not evidence the number of customers of these platforms amongst the group of online buyers.
The FCA’s decision is therefore extends the Coty case law according to which the supplier of a selective distribution network for luxury products can prohibit the resale of its products on third-party platforms in order to preserve the image of its products (see our comments Here).
The FCA had already extended the Coty case law to technical products in a decision of 24 October 2018 (n ° 18-D-23), concerning the practices of the company Stihl, leader in mechanized garden equipment (mainly confirmed on appeal, Paris court of appeal 17 10 19), where the FCA, in a premonitory manner, stated: “it is important to specify that the analysis carried out by the Court of justice in the Coty ruling for the online marketing of luxury products seems likely to be extended to other types of products ”(see our comments Here).
The FCA is now going even further because, even though Dammann Frères teas are “high-end” positioned, they are neither luxury products nor even distributed through a selective distribution network.
Key takeaway
As part of its relations with its distributors, the supplier must ensure:
- not to stipulate any express minimum resale price clause;
- not to implement a system, nor tolerate practices, of commercial retaliation against distributors deviating from the minimum „recommended“ prices (or even threaten them to do so);
- not to prohibit them from selling the products online or from advertising online;
- carefully examine the possibility of prohibiting them from reselling its products on third-party platforms.
International debt recovery is perhaps one of the most challenging issues in business. Companies are usually excited when starting their new international ventures, but when payments of distributors, clients, franchisees… stop, difficulties arise, particularly when they happen abroad. Recovery is most of the times complicated, causes expenses, nightmares and sometimes undertakings simply decide to give up. We herein provide some tips to consider in the prevention phase.
The following is a summary of the ideas which were discussed in a webinar organized by Legalmondo and the Chamber of Commerce of Treviso/Belluno in Italy in November 11, 2020.
What are the best practices to manage international receivables?
The first question regards the best practices companies could put into practice to avoid or, at least, to try to minimize the impact of lack of payment when international businesses are concerned.
The following main points were mentioned as worth considering at an early status of the negotiations and business development.
Verification of the identity of the company
Who is the company we are dealing with? It is important to check its existence, legal situation and capacity to carry on business. And also, the faculties or authorization of the person signing the type of contract. Is this the right authorized person? Has this person followed the legal requirements to do it? In particular, during this period of international pandemic, when the electronic signatures are used and when agreements are frequently signed with non-original signatures but only on pdf documents.
Request of financial information
What is the credit rating of the company? Seek to obtain official accounting information, either filed with the register of companies (when possible according to the local rules), or through private investigation research: tax regularity certificate to attest that the company is in compliance with applicable rules (in places when this is possible), comfort letters from shareholders or third parties (banks)… It is important to have a reasonable certitude about the capacity of that company to carry on the concrete business. And when possible, to do it on a regular basis.
Use the right contract
What is the correct type of contract for the commercial relationship? Seek advice from a lawyer specialized in the law of the country where the debt will be collected. This will be an essential element, for example, to know when the ownership of the acquired asset is legally transferred; when the parties have agreed to pay the invoices; the validity of the general conditions (or if they have to be drafted in the local language or in the language of the negotiations or what happens when they are contradictory: the seller’s and the purchaser’s); whether this is a distribution contract or a mere supply of products and the related obligations and consequences depending on the applicable law…
Write down your agreements
Avere le condizioni per iscritto non solo sul tipo di contratto ma anche sulle modalità, condizioni e ritardi di pagamento. Ed essere consapevoli del tipo di documenti necessari per la validità dell’accordo. Uno scambio di e-mail creerebbe un obbligo? Sarebbero necessari passaggi più formali per avere un contratto / obbligo valido (notaio, registrazione, firma separata di alcune condizioni)?
Follow your contract
If there is a contract in place, it is important to follow what has been signed or agreed, to ensure that these conditions are then respected. A different and sustained commercial practice could imply a tacit change the original written agreement.
Document all transactions
From the order by the client/distributor, its acceptance by the manufacturer, the transport document, linked to the receipt of goods, and until the final invoice, all paperwork should be clear and consistent. In case of lack of payment, all these documents might be necessary to prove the correct performance of the contract.
Has the debtor risen objections?
Also check your own defaults. It is quite frequent that the non-paying party justifies its decision on a previous breaching. If there is such previous alleged infringement by a supplier, for instance (related to the shipment of goods: delays, defective products, etc.), it will be probably more complicated to ask for the payment from the distributor or, at least, it will be required an additional procedure.
Be clear on the accrual of interests for late payments
In EU countries, legislation based on the 2011/7 Directive allows to combat late payment in commercial transactions with special interest rates: make sure this is mentioned in the contract, as non-EU based companies might not be aware of this, and the difference with the general legal interest can be substantial.
Seek guarantees for your credits
This obviously can vary depending on the type of contract and the relationship between the parties. A guarantee is advisable not only at the beginning, but also when the relationship lasts for several years. Sometimes, trust in your counterparty in the past makes more difficult to ask for additional guaranties and this could imply that late payments are not correctly managed.
Consider also additional guaranties on sold goods such as, when permitted by the law, retention of title. This will imply that the ownership remains in the vendor’s hand until the complete payment. In some cases, it is also possible to have additional guarantees when the retention of title can be registered at special public registries. These special conditions should also be verified locally in order to know their extent and to respect the way they shall be agreed, accepted, and documented.
Check out our webinar on debt collection
On November 11, 2020, I had the pleasure to participate to the webinar on International Debt Collection organized by the Chamber of Commerce of Treviso and Belluno and Legalmondo: we discuss the best practices and share practical information on debt collection in Spain, Germany, France, USA, China, Vietnam and Singapore.
You can watch the recording of the webinar here.
Legalmondo’s helpdesk on international credit collection
If you would like to know more about how to collect a debt overseas, you can find the reports of our experts from 20 countries here.
Under Vietnam’s presidency of the Association of South East Asian Nations (ASEAN), after eight years of negotiations, the ten ASEAN member states (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam) on 15 November 2020 signed a groundbreaking free trade agreement (FTA) with China, Japan, South Korea, Australia and New Zealand, called Regional Comprehensive Economic Partnership (RCEP).
The ASEAN economic community is a free trade area kickstarted in 2015 among the above-mentioned ten members of the homonymous association, comprising an aggregate GDP of US$2.6 trillion and over 622 million people. ASEAN is China’s main trading partner, with the European Union now slipping into second place.
Unlike the EuroZone and the European Union, ASEAN does not have a single currency, nor common institutions, like the EU Commission, Parliament and Council. Similarly to what happens in the EU, though, a single member holds a rotational presidency.
Individual ASEAN Countries, like Vietnam and Singapore, have recently entered into free trade agreements with the European Union, whilst the entire ASEAN block had and still has in place the so-called “plus one” agreements with other regional Countries, namely The People’s Republic of China, Hong Kong, The Republic of Korea, India, Japan and Australia and New Zealand together.
With the exception of India, all the other Countries with “plus one” agreements with ASEAN are now part of the RCEP, which will gradually overtake individual FTAs through the harmonisation of rules, especially those related to origin.
RCEP negotiations accelerated with the United States of America’s decision to withdraw from the Trans-Pacific Partnership (TPP) upon the election of President Trump in 2016 (although it is worth noting that a large part of the US Democratic Party also opposed the TPP).
The TPP would have then been the largest free trade agreement ever and, as the name suggest, would have put together twelve nations on the Pacific Ocean, namely Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam, and the USA. With the exclusion of the latter, the other eleven did indeed sign a similar agreement, called Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
The CPTPP has however been ratified only by seven of its signatories and clearly lacks the largest economy and most significant partner of all. At the same time, both the aborted TPP and the CPTPP evidently exclude China.
The RCEP’s weight is therefore self evidently heavier, as it encompasses 2.1 billion people, with its signatories accounting for around 30% of the world’s GDP. And the door for India’s 1.4 billion people and US$2.6 trillion GDP remains open, the other members stated.
Like most FTAs, RCEP’s aim is to lower tariffs, open up trade in goods and services and promote investments. It also briefly covers intellectual property, but makes no mention of environmental protections and labour rights. Its signatories include very advanced economies, like Singapore’s, and quite poor ones, like Cambodia’s.
RCEP’s significance is at this very moment probably more symbolic than tangible. Whilst it is estimated that around 90% of tariffs will be abolished, this will only occur over a period of twenty years after entry into force, which will happen only after ratification. Furthermore, the service industry and even more notably agriculture do not represent the core of the agreement and therefore will still be subject to barriers and domestic rules and restrictions. Nonetheless, it is estimated that, even in these times of pandemic, the RCEP will contribute some US$40billion more, annually, to the world’s GDP, than the CPTPP does (US$186billion vis-à-vis US$147billion) for ten consecutive years.
Its immediate impact is geopolitical. Whilst signatories are not exactly best friends with each other (think of territorial disputes over the South China Sea, for instance), the message is clear:
- The majority of this part of the world has tackled the Covid-19 pandemic remarkably well, but cannot afford to open its borders to Europeans and Americans any time soon, lest the virus spread again. Therefore, it has to try and iron out internal tensions, if it wants to see some positive signs within its economies given by private trade, in addition to (not always good) deficit spending by the State. Most of these Countries do rely heavily on Western talents, tourists, goods, services and even strategic and military support, but they are realistic about the fact that, unless the much touted vaccine works really well really soon, the West will struggle with this coronavirus for many months, if not years.
- Multilateralism is key and isolationism is dangerous. The ASEAN bloc and the Australia-New Zealand duo work exactly in this peaceful and pro-business direction.
The ASEAN’s official website (https://asean.org/?static_post=rcep-regional-comprehensive-economic-partnership) is very clear in this regard and states, in fact that:
RCEP will provide a framework aimed at lowering trade barriers and securing improved market access for goods and services for businesses in the region, through:
- Recognition to ASEAN Centrality in the emerging regional economic architecture and the interests of ASEAN’s FTA partners in enhancing economic integration and strengthening economic cooperation among the participating countries;
- Facilitation of trade and investment and enhanced transparency in trade and investment relations between the participating countries, as well as facilitation of SMEs‘ engagements in global and regional supply chains; and
- Broaden and deepen ASEAN’s economic engagements with its FTA partners.
RCEP recognises the importance of being inclusive, especially to enable SMEs leverage on the agreement and cope with challenges arising from globalisation and trade liberalisation. SMEs (including micro-enterprises) make up more than 90% of business establishments across all RCEP participating countries and are important to every country’s endogenous development of their respective economy. At the same time, RCEP is committed to provide fair regional economic policies that mutually benefit both ASEAN and its FTA partners.
Still, the timing is right also for EU businesses. As mentioned, the EU has in place FTAs with Singapore, South Korea, Vietnam, an Economic Partnership Agreement with Japan, and is negotiating separately with both Australia and New Zealand.
Generally, all these agreements create common rules for all the players involved, thus making it is simpler for companies to trade in different territories. With caveats on entry into force and rules of origin, Countries that have signed both an FTA with the EU and the RCEP, notably Singapore, a major English speaking hub, that ranks first in East Asia in the Rule of Law index (third in the region after New Zealand and Australia and twelfth worldwide: https://worldjusticeproject.org/sites/default/files/documents/Singapore%20-%202020%20WJP%20Rule%20of%20Law%20Index%20Country%20Press%20Release.pdf), could bridge both regions and facilitate global trade even during these challenging times.
