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Agency

French Commercial Agency Agreements - A Brief Overview in French law

A French Commercial Agent (in French 'Agent Commercial') must be registered as such upon a special list maintained and published by the Registrar of the territorially competent local Commercial Court.

It is therefore possible to check, often online, whether a certain individual is indeed duly registered as a Commercial Agent; and failure to register will sometimes deprive the agent of the full protection of the applicable French provisions.

French law strictly defines the status and role of a Commercial Agent and the corresponding legislation and regulations are held to be public policy provisions

Thus, for example, the statutory and case law provisions will generally be held to override any contrary or incompatible clause in a contractual agreement between the principal and the agent.

Moreover, it is generally perceived that, compared to many common law systems, the French statutory and other provisions tend generally to favour the agent as opposed to the principal.

For instance, principals outside France often observe that under French law it is extremely difficult to dismiss a Commercial Agent.

Indeed, other than for 'faute grave' or serious misconduct, it is very hard to remove or dismiss a Commercial Agent without the risk of paying compensation which is far from negligible.

Furthermore, the concept of "faute grave" is currently subject to much discussion in commercial case law.

It might therefore often be considered helpful for the principal to attempt to characterise this notion within the agency contract and for the parties to mark their agreement thereon, i.e. before future difficulties were encountered.

Finally, in this very brief overview, it is mentioned that many principals outside France are often astonished to learn that, under French law, it will usually be necessary not only to give lengthy notice to terminate the agency agreement (current case law holding that 6 months is an absolute minimum) but also and importantly to pay considerable compensation for loss of clientele even upon the natural expiry or termination of the agreement

For more information about French law or about specific French Commercial Agency agreements please click here