Distribution agreement in France: Template, Key Clauses and Local Law (2026)

What a distribution agreement is under French law A distribution agreement (contrat de distribution) is a contract where a supplier sells goods to a distributor, who resells them in its own name and for its own account. The distributor buys to resell and carries the resale risk. This is different from a commercial agent (agent commercial), who does not buy the goods and is paid commission, and whose relationship is governed by its own regime in Article L134 of the Commercial Code. France has no single code for distribution agreements. The relationship is shaped by general contract law, by one famous French rule on ending commercial relationships, and by EU competition law. ## What French law requires There is no dedicated distribution statute, so freedom of contract applies, with limits. Parties are largely free to agree territory, exclusivity, targets and term. A written contract is strongly advised. There are no special formalities to conclude a distribution agreement. The sudden-termination rule is the defining feature of French distribution law. Article L442-1 II of the Commercial Code makes it a fault to abruptly terminate, even partially, an established commercial relationship without giving written notice that takes account of the length of the relationship. This applies to distribution relationships. Three conditions are usually identified: an established relationship, an abrupt break (even partial, such as a sharp cut in orders), and insufficient written notice. A party that gives at least 18 months' written notice is protected: liability cannot be founded on insufficient notice duration once 18 months has been given. In practice, courts often reason around one month of notice per year of relationship, but that is a custom, not a fixed statutory figure. Even a reduction in orders can count. French courts treat a significant cut in volume during a relationship, or during the notice period, as a possible partial rupture brutale. The Cour de cassation has continued to apply this through 2025. This means a supplier cannot quietly starve a distributor of orders as a substitute for proper notice. Competition law sets the outer limits. A distribution agreement is a vertical agreement under Article 101 TFEU and French competition law, enforced by the Autorite de la concurrence. The EU Vertical Block Exemption Regulation (Regulation 2022/720, in force since 1 June 2022) gives a safe harbour where both the supplier's and the buyer's market share is at or below 30 percent and there is no hardcore restriction. ## The clauses that differ under French law - Notice on termination: because of Article L442-1 II, the notice period must reflect the length of the relationship. Build in a generous, written notice provision; a short one will not protect you against a sudden-termination claim.

• Order volumes: a clause allowing sharp swings in orders is risky, because a steep reduction can itself be an abrupt partial termination.
• Resale price: the supplier may set a maximum or recommended price, but fixing a minimum (imposing resale prices) is prohibited and separately sanctioned under French law.
• Exclusivity: lawful within the block exemption; since 2022 a supplier may reserve a territory for up to five exclusive distributors.
• Agent or distributor: be clear which you are. If the relationship is really agency, the agent's own protective regime (including an end-of-contract indemnity) applies instead. ## A usable template (adapt with advice) Replace every [bracketed] field. This is a skeleton, not legal advice. ``` DISTRIBUTION AGREEMENT (CONTRAT DE DISTRIBUTION) 1. Parties: Supplier [name, address, SIREN]; Distributor [name, address, SIREN].

2. Products: listed in Annex 1.
3. Territory: [region].
4. Appointment: Supplier appoints Distributor as [exclusive / non-exclusive] distributor of the Products in the Territory.
5. Resale: Distributor buys and resells in its own name and for its own account.
6. Prices: Supplier's prices to Distributor are in Annex 2. Distributor sets its own resale prices [Supplier may recommend a maximum].
7. Minimum purchases: at least [quantity / value] per [year], subject to clause 8.
8. Orders: The parties will avoid any abrupt and significant reduction in orders; any material change follows the notice in clause 10.
9. Term: from [date], [fixed term / indefinite].
10. Termination: Either party may terminate on [notice period reflecting the length of the relationship, e.g. 12 to 18 months'] written notice; immediate termination for serious breach.
11. Governing law and forum: French law; [the competent French court]. Signed by both parties at [place] on [date].

- **Clause 8 (orders)**: do not treat order cuts as a soft way to wind down. A sharp reduction can be a partial rupture brutale in its own right.
- **Clause 6 (prices)**: recommend or cap, never impose a minimum. Imposed minimum resale prices are prohibited in France.
- **Clause 4 (exclusivity)**: lawful within the block exemption, but check the 30 percent market-share threshold. ## Red flags - A short termination-notice clause on a long relationship, which Article L442-1 II can override with heavy damages.
- Running down a distributor by cutting orders instead of giving proper notice.
- A minimum resale price clause, which is prohibited and sanctioned.
- Confusing distribution with agency and missing the agent's protective regime where it really applies.
- Exclusivity without a market-share check against the block exemption.
- No written contract, leaving territory, targets and notice to argument.
- Relying on an automatic termination clause (clause resolutoire) to escape the notice rule, which does not displace Article L442-1 II where the break is really abrupt. Two further French points are worth knowing. First, the notice that matters is the one actually given in writing, not what the contract says in the abstract: a court looks at the real conduct of the parties at the end of the relationship. Second, the damages for a sudden termination are usually measured by the margin the victim lost over the notice period that should have been given, so a longer relationship and a healthier margin both increase the exposure. This is why a supplier who wants to exit a long French relationship should plan the notice carefully and in writing, rather than cutting ties and hoping a short contractual clause will hold. ## One workspace for the deal and the notice clock A French distribution agreement is really a hidden countdown: the day the relationship ends, the notice you gave will be measured against how long it lasted, and a shortfall becomes damages under the sudden-termination rule. The contract is signed and filed, the relationship runs for years, order volumes drift, and the notice exposure is invisible until the moment it matters most. That is the worst time to work out how much notice the law expects. An AI contract workspace is built to keep that in view: draft the agreement, read the termination and notice clauses back in plain language, surface the review and renewal dates as live alerts, and keep each version tied to the counterparty and the responsible team. [Adira](https://adiralaw.com) is built around Indian corporate law first, and depth for France and EU competition analysis is on its roadmap rather than live today, so a French distribution deal still needs French counsel. The point to carry away is simple: the contract and the duties it creates should live in one place, not in a folder and a memory. This guide is general information, not legal advice. Confirm the current position with a French lawyer before you sign.