The sales representative, as defined by Article L134-1 of the Commercial Code1, is an independent intermediary tasked with negotiating, and even concluding, contracts on behalf of a principal. It operates without a subordination relationship and receives a commission as remuneration for its activity. In the event of contract termination at the initiative of the principal, the agent is entitled to, except where an exception applies, to a compensatory indemnity ( Article L134-12 ).
In practice, this status gives rise to numerous disputes: the notions of independence, negotiation, or even grave fault give rise to varying interpretations. Case law therefore plays a determining role in clarifying the conditions of application of the regime, including in hybrid contexts ( example. aggregation of activities, international contracts, particularly reclassification)
The first half of 2024 was marked by several important rulings by the Court of Cassation. This summary retains five of them, divided into two broad categories, to extract useful lessons for professionals in the sector.
I. The qualification of the contract and the status of sales agent
Applicability of the status of commercial agent to a company holding the professional card of real estate agent
The Court of Cassation recalled, in a ruling of January 10, 2024 ( Cass. com, n° 22-21.9422), that the status of commercial agent may apply to a legal entity exercising in the real estate sector, provided that it holds the professional card provided for in Article 1 er of the Hoguet law. Indeed, the combination of Articles L134-1 of the Commercial Code, 4 of the Hoguet law and 9 of the application decree of July 20, 1972 allows a company authorized to act on behalf of a principal and to benefit from the status of commercial agent. The Court confirmed this possibility by rejecting the argument that the status of commercial agent is not applicable to a legal entity exercising an activity subject to the Hoguet law.
Multiple business activities and trader status: compatibility admitted
In a ruling of March 20, 2024 ( Cass. com., n° 22-21.2303), The Court of Cassation ruled that the status of commercial agent remains applicable to a professional who simultaneously carries out a proper commercial activity, provided that the intermediary function is performed independently from this activity.
In the present case, a principal contested that his former agent could invoke the status of sales representative on the grounds that the latter also had an independent resale activity to his own clients, which could lead to the existence of a separate clientele, incompatible in his opinion with the role of intermediary. The Court rejects this analysis, relying on the ZAKO judgment issued by the CJEU ( C-452/174), according to which an ancillary or parallel activity does not preclude the recognition of the status of agent, provided that it does not call into question the agent’s autonomy in the execution of his mandate. It also specifies that the exercise of separate activities is not sufficient to exclude the commercial agency regime, unless a dependency or lack of independence in the execution of the representation contract is demonstrated.
Reclassification in commercial agency contract: clarifications on the notion of “negotiation”
In a ruling of April 24, 2024 ( Cass. com, n° 23-12.6435), The Court recalls that the status of commercial agent does not depend on the existence of a power to conclude contracts or to modify tariff conditions, but on the permanent negotiation mission exercised on behalf of the principal.
In the present case, an agent claimed the reclassification of a service provision contract as a commercial agency contract, arguing that he had acted autonomously to present the client’s products, prospect healthcare facilities, organize trials, provide demonstrations, and train clients. The client contested this reclassification, arguing that the agent did not have the power to sign contracts or negotiate prices. The Court of Appeal had accepted this argument, excluding the status of commercial agent. The Court overturned this decision: it ruled that requiring the agent to have the power to conclude contracts or fix prices amounts to adding conditions that are neither stipulated in the Commercial Code nor in Directive 86/653/CEE of 18 December 19866 do not impose. What is important is that the agent is tasked, independently and permanently, with actions aimed at facilitating the conclusion of contracts on behalf of the client, even if he does not have the power of signature.
II. The termination payment right
Validity of the notification of the end-of-contract indemnity claim, no formal requirements required
- In a judgment rendered on March 20, 2024 ( Cass. com, n° 22-22.7997), The Court has clarified the modalities of notification by which a commercial agent intends to assert its right to termination indemnity, in accordance with Article L134-12 of the Commercial Code.
- In the present case, following the termination of the agency agreement, the principal challenged the admissibility of the claim for damages, arguing that it had not been notified within the one-year period provided for by law. Specifically, he contended that the letter addressed by the counsel to the counsel of the agent could not be considered valid notification, due to the lack of a direct link between the parties. The Court rejects this position, recalling that the law provides no formalities in this matter. It admits that a letter addressed by a lawyer to the lawyer of the other party may constitute notification, provided that it reveals, in an unambiguous manner, the intention of the agent to assert his rights to compensation.
Voluntary application of French law to an agency contract concluded with an agent outside the EU
In a ruling of March 20, 2024 ( Cass. com, n° 22-22.4508), The Court of Cassation admitted the application of French law to an agency contract binding a principal established in France to an agent operating outside of the European Union, in this case in Latin America.
Following the termination of the contract, the agent had requested the indemnity provided for in Article L134-12 of the Commercial Code. The principal objected to this, arguing that French law, stemming from Directive 86/653/EEC of 18 December 1986, did not apply to agents operating outside the EU. The Court rejects this argument: since the directive does not apply automatically in this case as it limits its territorial scope, nothing prohibits the parties from choosing French law. Relying on the Hague Convention of 14 March 1978 on the law applicable to intermediary contracts, it is recalled that the principle of autonomy of will allows the contracting parties to designate the applicable law, even in the event of execution outside the EU. Once the contract provided for it, French rules, including the termination indemnity, must apply.
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We therefore place ourselves at your disposal for any supplementary information you may require.
Sources :
- https://www.legifrance.gouv.fr/codes/article_lc/LEGIARTI000044056333 – Commercial Code, Article L134-1 ↩︎
- https://www.legifrance.gouv.fr/juri/id/JURITEXT000048949987?init=true&page=1&query=22-21.942&searchField=ALL&tab_selection=all – Court of Cassation, Civil Chamber, Commercial Chamber, January 10, 2024, 22-21.942, Unpublished ↩︎
- https://www.legifrance.gouv.fr/juri/id/JURITEXT000049321457 – Court of Cassation, Civil Chamber, Commercial Chamber, March 20, 2024, 22-21.230, Published in the Bulletin ↩︎
- https://curia.europa.eu/juris/document/document.jsf?text=&docid=207950&pageIndex=0&doclang=FR&mode=req&dir=&occ=first&part=1&cid=5463325 – CJUE, November 21, 2018, C- 452/17 ( ZAKO ) ↩︎
- https://www.legifrance.gouv.fr/juri/id/JURITEXT000049509994 – Court of Cassation, Civil Chamber, Commercial Chamber, April 24, 2024, 23-12.643, Unpublished ↩︎
- https://eur-lex.europa.eu/legal-content/FR/ALL/?uri=CELEX:31986L0653 – Directive 86/653/EEC of 18 December 1986 relating to the coordination of the rights of Member States concerning independent business agents ↩︎
- https://www.legifrance.gouv.fr/juri/id/JURITEXT000049321511?init=true&page=1&query=22-22.799&searchField=ALL&tab_selection=all – Court of Cassation, Civil Chamber, Commercial Chamber, March 20, 2024, 22-22.799, Unpublished ↩︎
- https://www.legifrance.gouv.fr/juri/id/JURITEXT000049321510 – Court of Cassation, Civil Chamber, Commercial Chamber, March 20, 2024, 22-22.450, Unpublished ↩︎
