French Distribition Agreements - Overview
The law applicable to a Distribution Agreement is left to the appreciation of the parties.
Nevertheless, at French Law, and as a matter of public policy, it is held to be essential to avoid any confusion between a Distribution Agreement for a particular market and an Agency Agreement.
French Law states that the definition of a Distributor is an independent person or entity, which buys goods or chattels and resells them to third parties upon trading conditions, and at a profit margin, fixed by him.
A Distributor may be appointed for a particular territory either on an exclusive or non-exclusive basis.
There is generally no compensation for the loss of clientele at the expiry or termination of the Distribution Agreement, although, of late, case law has envisaged compensation for major investment realised by the Distributor on behalf of the manufacturer.
French Law illustrates that there is no statutory notice period, although many agreements tend to have a 3-6 month notice period.
Particular care should be taken by the manufacturer whose goods are distributed in France in regard to the product liability provisions of French and European Union legislation.
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