Your historical customer announces to you overnight that he will no longer work with you. Your longtime supplier is disappearing without notice. Your business partner cuts orders out of the blue. What to do? What are your rights? Full user manual.

1. What is the abrupt termination of established commercial relationships?

The abrupt termination of established commercial relationships ("fin brutale des relations commerciales établies") is a practice that restricts competition, sanctioned under French law since Law No. 96-588 of 1Er July 1996 on the loyalty and balance of commercial relationships.

Since ordinance No. 2019-359 of 24 April 2019, it has been codified in article L. 442-1, II of the Commercial Code.

This text incurs the responsibility of anyone who abruptly terminates an established commercial relationship, without having respected sufficient notice. The idea is simple: you cannot, overnight, cut off a commercial relationship that has lasted for months or years, in defiance of the legitimate trust that the partner had placed in the sustainability of this relationship.

What is sanctioned is not the rupture itself — contractual freedom requires that everyone be free to end a commercial relationship — but the brutality of this break, that is to say its sudden and unpredictable nature.

Finally, the provisions of this text are of public order: the parties cannot derogate from them by agreement (Cass. Com., September 25, 2007, no. 06-15.517).

In this case, even if the parties to the contract have contractually defined a notice period, the judge may override it if he considers that it is insufficient in view of the circumstances of the case (Cass. Com., May 20, 2014, no. 13-16.398).

2. Who can be affected by the sudden termination of established commercial relationships?

a. Who can be responsible for the breakup?

Anyone engaged in production, distribution or service activities may incur liability on this basis.

This very broad formulation embraces almost all economic actors, whether commercial companies, associations, or natural persons exercising an economic activity. The commerciality of the activity or its lucrative nature are not conditions.

Moreover, when the decision to break up is taken by a parent company on behalf of its subsidiaries, the latter can itself be held liable if it was the sole decision-maker and the subsidiaries did not have any autonomy (Cass. Com., July 5, 2016, no. 14-27.030).

b. Who can be a victim of a breakup?

The person responsible for a sudden break is liable regardless of the legal status of the victim of the offending conduct: only the fact that the victim engages in an economic activity is taken into account, regardless of whether this activity is civil or commercial in nature (Cass. Com., February 6, 2007, no. 03-20.463). An association, a craftsman, a company or a natural person exercising an economic activity can all take advantage of this text.

However, the text does not apply in a few cases:

  • To regulated liberal professions. Indeed, since the prerequisite for applying the abrupt termination regime is the existence of an economic activity, professions considered to be incompatible with any commercial activity cannot take advantage of this system (lawyers, notaries, doctors, doctors, accountants, accountants, industrial property consultants);
  • To the relationships between a commercial agent and his principal. The period of notice that must be respected is set by article L. 134-11 of the Commercial Code according to the number of years of execution of the contract (Cass. Com., April 3, 2012, no. 11-13.527);
  • To public road freight transport performed by subcontractors. When the framework contract between the parties expressly refers to the standard contract established by Law No. 82-1153 of 30 December 1982, which provides for the duration of notice of termination (Cass. com., September 25, 2019, September 25, 2019, No. 17-22.575).

3. What is an “established” business relationship?

a. No need for a formal contract

The commercial relationship is a concept that is more economic than legal (Cass. Com., March 9, 2010, no. 09-10.216). Thus, the concept is not limited to commerciality within the meaning of the Commercial Code.

It can exist even in the absence of a formalized contract, or after the termination of a contract, as long as a regular flow of business existed between the parties. It may consist of a contract for an indefinite period, a succession of fixed-term contracts, or a simple succession of one-off orders without a framework agreement (Cass. Com., September 6, 2011, no. 10-30.679).

b. The criteria for “established” character

To be established, the relationship must be ongoing, stable and usual, and the victim must have legitimately expected a continuity of exchanges (Cass. Com., September 15, 2009, no. 08-19.200). However, this stability is not necessarily absolute continuity: a succession of one-off contracts, even without a framework contract, may be sufficient (Cass. Com., September 6, 2011, no. 10-30.679).

The judges analyze a range of indicators: the duration of the relationship, the regularity of exchanges, the significance of the relationship (share in turnover), and the stability of the relationship.

In this respect, while the duration of the relationship is an essential element in characterizing an established relationship, it is not necessarily a sufficient criterion. The systematic use of tenders precarizes the relationship and can thus rule out its established nature (Cass. Com., September 20, 2011, no. 10-15.750).

Likewise, repeated non-renewal clauses can be disqualifying - provided they are not contradicted by the reality of the parties' practices (Cass. Com., March 19, 2025, no. 23-22.182).

4. When is a breakup “abrupt”?

The brutality of the breakup is due to the lack of sufficient notice. The person who broke up is liable either because he did not give any notice or because the notice given was insufficient. A termination with immediate effect, not justified by a serious fault or a case of force majeure, is necessarily sudden (Cass. Com., March 20, 2012, no. 11-12.520).

As such, the criterion of brutality is easy to understand.

In this respect, it is interesting to note that the economic dependence, or even commercial exclusivity, of the victim of the rupture with respect to its author is irrelevant for the qualification of the sudden rupture: this criterion will be taken into account only at the stage of calculating the notice period (Cass. Com., March 17, 2004, no. 02-17.575).

Moreover, it is not necessary for the rupture to be total to enter the field of sudden rupture: partial rupture is also targeted.

Thus, a significant and unilateral reduction in the volume of orders, the imposed modification of commercial conditions or the abolition of territorial exclusivity without notice may thus constitute a partial sudden break (Cass. Com., February 3, 2015, no. 13-24.592).

In such a case, the judge analyzes the economic situation of the person responsible for the decrease or the economic situation to assess whether or not the decrease is justified (Cass. com., July 7, 2004, No. 03-11.472).

5. What form should the notice take?

The notice must be in writing. A verbal announcement or the simple slowdown in orders cannot make up for the absence of written notice (Cass. Com., September 24, 2013, no. 12-24.538). Advance notice can take several forms:

  • A cancellation letter (recommended with acknowledgement of receipt preferably);
  • An email, as long as it unequivocally shows the desire to end the relationship (Cass. Com., December 8, 2015, no. 14-28.228).

Jurisprudence therefore has a flexible understanding of the concept of writing. In any case, it must be unequivocal about the will of the author and specify the effective end date of the relationship. A letter that is ambiguous or does not specify this date does not give rise to notice (Cass. Com., February 26, 2025, no. 23-50.012).

The notice period starts from the date of receipt of the notification.

6. What is the length of notice to be respected?

a. The limit of 18 months of notice

Since the 2019 ordinance, Article L. 442-1, II provides that the responsibility of the author of a breach of commercial relationships cannot be incurred for an insufficient period of time.” as long as he respected an eighteen-month notice ”.

This mechanism responds to a logic of legal security: the person who broke up can thus calmly plan the end of his commercial relationship.

However, uncertainty remains as to whether this period also constitutes a ceiling for calculating compensation in the event of insufficient notice; case law has not yet settled this point.

b. A concrete assessment of the situation

The duration of the minimum notice that must be given to the person who suffers the rupture must be assessed at the time of the notification of rupture (Cass. Com., July 9, 2013, no. 12-20.468).

Therefore, when assessing the situation of the victim with regard to the breakup, the judge cannot take into account the events that occurred after the notification of the notice, whether they positively or negatively influence the situation of the victim (Cass. Com., May 17, 2023, no. 21-24.809).

That being said, the period of sufficient notice is assessed taking into account the duration of the commercial relationship and other circumstances at the time of notification of the termination. In particular, the courts take into account:

  • The length of the broken relationship (Cass. Com., January 29, 2025, no. 23-16.526);
  • The state of economic dependence of the victim of the breakup on its perpetrator defined as” the impossibility of having a solution technically and economically equivalent to the relationships that [the supplier] Has established a relationship with another company ” (Cass. Com., November 10, 2021, no. 20-13.385);
  • The prospects for the retraining and reorganization of the evicted partner within the notice period (Cass. Com., March 11, 2014, no. 13-11.097).

Throughout the notice period, case law consistently requires that business relationships be maintained under their previous conditions (Cass. Com., February 10, 2015, No. 13-26.414).

7. In what cases can you break up without notice?

The text provides for two reasons for exemption allowing immediate termination:

a. Non-performance by the victim of his obligations

Under common contract law, for the fault of the victim (of a contractual breach) to be exempt from liability for the other party, it must have the characteristics of force majeure.

In the case of sudden breakup, a serious breach is sufficient to justify a breakup without notice.

However, case law requires that this breach be genuinely serious. Were thus considered sufficiently serious: repeated and persistent non-payments despite reminders, such as the violation of exclusivity, the non-compliance with compliance obligations and anti-corruption rules, the creation of a competing company with canvassing the partner's customers (Cass. Com., November 20, 2019, no. 18-12.817).

b. Force majeure

An unpredictable, irresistible and external event, making it impossible to continue the relationship, can justify an immediate breakup. This hypothesis remains rare in practice.

It should also be noted that for the text to be applicable, the breach must be attributable to one of the parties. Thus, the non-renewal of an agreement essential to the continuation of the relationship may constitute an objective and insurmountable external constraint that eliminates any responsibility for the subsequent breakup (CA Paris, July 3, 2024, July 3, 2024, no. 22/01429).

8. What is the competent jurisdiction?

Except in the case of an administrative contract, the courts of the judicial order are competent.

The liability incurred is of a delictual nature (Cass. Com., February 6, 2007, no. 03-20.463)*.

Thus, at first instance, the court with territorial jurisdiction will be either that of the defendant's domicile or that of the place where the damage was suffered (arts. 42 and 46 of the Code of Civil Procedure). The applicant may then refer the matter to the Commercial Court competent in this jurisdiction or, failing that, to the Judicial Court.

However, this freedom of choice is governed by Law No. 2008-776 of 4 August 2008, which reserved the litigation of practices that restrict competition to certain specialized courts whose seat and jurisdiction were established by Decree No. 2009-1384 of 11 November 2009: Marseille, Lille, of November 11, 2009: Marseille, Lille, of France, of France, of France, of France, of France, of France, of France, of France, of France, of France, of France, of France, of France, of France, of France, of France, of France, of France, of which were established by Decree No. 2009-1384 of 11 November 2009: Marseille, Lille, of November 2009: Marseille, Lille, of France, of France, of France, of France

Failure to comply with these exclusive competences gives rise to an objection of incompetence which must be raised, on pain of inadmissibility, In limine litis (Cass. Com., October 18, 2023, no. 21-15.378).

It follows from these same texts that, in the case of appeal, the Paris Court of Appeal has exclusive jurisdiction to hear these disputes.

As with the first instance, non-compliance with this rule can be considered as an exception of incompetence that must be raised. In limine litis (Cass. Com., January 29, 2025, no. 23-15.842).

It is therefore imperative to identify the competent jurisdiction before initiating any proceedings, otherwise there will be an exception of incompetence.

*For all intents and purposes, it should be noted that if the dispute is international, the nature of the liability differs. If the defendant is resident in a Member State of the European Union, the liability will be contractual in nature (CJEU, July 14, 2016, C-196/15). If he is not resident in a Member State, liability remains criminal (Cass. Civ. 1re, March 12, 2025, no. 23-22.051).

These qualifications have important consequences on competency rules, but also on the question of applicable law. However, this is not the purpose of this article.

9. How long can we take action?

Liability action is time-barred after 5 years from the day on which the right holder knew or should have known the facts allowing him to exercise it (article L. 110-4 of the Commercial Code).

The starting point starts from the notification of the rupture or effective cessation of orders.

10. What compensation can you get?

Fundamental point: the compensation does not cover the loss of the commercial relationship itself, but only the damage caused by the brutality of the breakup, that is to say by the lack of notice.

As such, the victim of the rupture can simultaneously seek compensation for the damage resulting from a contractual fault, independent of the breach, on the one hand, and that of the damage resulting from the brutality of the rupture on the other hand (Cass. Com., March 27, 2019, no. 16-24.630).

a. The main damage: the loss of gross margin

Case law is consistent on this point: the main injury is assessed by reference to the gross margin (Cass. Civ. 1re, January 22, 2009, no. 07-21.233). So,” only the damage resulting from the sudden nature of the breakup must be compensated, evaluated in consideration of the gross margin expected during the notice period that was not performed ” (Cass. Com., June 24, 2014, no. 12-27.908).

Concretely, the compensation corresponds to the gross margin that the victim would have earned during the period of notice that should have been granted to him, minus the variable expenses avoided.

The calculation of the gross margin varies according to the nature of the activity:

  • With regard to the sale of products, it means the resale price minus the purchase price (CA Paris, February 7, 2013, no. 11/04913);
  • In the case of services, it means turnover less various expenses (CA Paris, April 10, 2014, no. 12/01373).

In practice, most decisions apply the margin rate used to the average turnover of the last three years of operation (CA Orléans, 31 March 2011, no. 10/02363; CA Aix-en-Provence, 5 October 2011, no. 10/03682; CA 10/03682; CA Versailles, no. 10/03682; CA Versailles, 4 September 2012, no. 10/03682; CA Versailles, 4 September 2012, no. 11/02819).

b. Ancillary damages

In addition to the loss of earnings, other damages may be compensated provided they are directly related to the brutality of the breakup and are established:

  • The costs and investments incurred in consideration of the sustainability of the relationship can be repaired (CA Aix-en-Provence, 2 March 2011, no. 10/01905; CA Paris, 16 November 2011, no. 11/12595);
  • The damage to image and disorganization can also be compensated: the brutality of the breakup can destabilize the victim's clientele and cause them to lose their image (Cass. Com. December 2, 2008, n°08-10.732; CA Douai, December 7, 2006, no. 05/01333; CA Rennes, January 4, 2011, no. 09/07515; CA Colmar, May 17, 2011, no. 09/00510);
  • The loss of value of equipment that has become useless, such as unsellable stocks (CA Paris, 11 April 2013, n.O 10/21434; CA Versailles, October 29, 2013, n°12/01461).

In addition, the person who breaks abruptly may also be sentenced to pay a civil fine and to publicize his conviction.

Have you suffered an abrupt termination of an established commercial relationship, or do you want to end a commercial relationship without legal risk? Do not hesitate to contact us.