Rare are today the business sectors that have not evolved their way of distributing their products and services due to the exponential use of the internet.
In the field of trade and sale, Furthermore, an increasing number of companies are thus offering, in addition to their traditional sales methods, the sale of their products on online sales sites. Whether it be on their own websites sales platforms or marketplace sites, etc.
Unless expressly prohibited by certain product types, no text obviously prohibits the use of online sales; however, for companies that have commercial agents to be particularly vigilant before selling online. The creation by the client’s of an online sales site or still the sale of its products by the client on the website of a partner may in fact relate to to compete the commercial agent and be contrary to the common interest of the commercial agent agreement.
Obligation to respect the common interest of the commercial agent agreement
The agency agreement is an agency. The principal thereby confers on the commercial agent, the agent, the power to represent him/her/it the performance of certain acts acting on his/her/its behalf and in its interest.
The common interest mandate is a subcategory of the mandate defined by the Civil Code. The essential characteristic of the common interest mandate is that both parties have an interest in « the company’s growth through the creation and development of customer base ».
In other words, both the principal and the commercial agent have a interest – in a practical financial sense – to ensure that the commercial agent develop the client base of the principal.
Furthermore, as for any contract but to a greater extent due to this common interest, it incumbent upon each party a obligation of loyalty towards the other party. Specifically, each party must ensure that it does not make the performance of its obligations by the other party more complicated.
For the client, this implies, in particular, ensuring that the sales agent is able to execute their mandate normally, and in particular not to compete with their sales agent.
Online sales sites and the client’s competition
As previously mentioned, the case law considers that the principal must not make it more difficult to fulfill his/her/its mandate by the commercial agent, even must facilitate the execution of its contract.
But what about when the principal decides to to sell on online sales sites the products of which he also entrusted the the distribution to his commercial agent ?
A recent judgment rendered by the commercial chamber of the Court of Cassation on November 16, 2022 had to rule on this matter.
In the present case, a a company specializing in the sale of wine had entrusted to a sales agent the the distribution of its products to cellars, restaurants, etc.
In parallel, the company also sold its products directly to end customers on the online sales platform « ventesprivées.com ».
Several clients followed by the sales agent did not fail to express their dissatisfaction to him, their own clients ultimately preferring to purchase through the private sales website rather than from them, the products being sold there at more advantageous prices.
Ultimately, being unable to resell the the client’s products to their own clients, several clients of the sales agent had therefore preferred to stop sourcing from him. The sales agent then considered that there was a unfair competition from his principal.
On the other hand, the principal considered himself free to act, the commercial agent benefiting from no exclusivity.
Pursuant to its decision, confirmed thereon by the Court of Cassation, the Court of Appeal of Paris has considered that the principal’s parallel activity was of a nature to infringe the conditions of its mandate which had particularly placed him in difficulty with respect to his clients and therefore, that a such conduct was disloyal.
the principal has accordingly been ordered to pay a termination payment to his sales representative who had acknowledged the termination of his contract as a result of his principal’s fault.
In definitiva, the use of online sales can therefore be a source of real difficulties for the sales agent to execute his contract normally. And, ipso facto, tensions in the relations between principal and sales agent.
This will be the case in particular when the commercial agent agreement has been concluded before the principal resorts to online sales.
The above judgment nevertheless shows that the fact that online sales and commercial agent contracts coexisted from the outset does not guarantee a harmonious coexistence of these two distribution channels in all cases.
accompanying our clients through the drafting and the execution of agreements agency agreement, implementation of performance of their contract.
We therefore place ourselves at your disposal for any questions you may have on this matter.
AUMANS AVOCATS (formely FOUSSAT AVOCATS): our expertise in commercial agent law at your service
Specialized for nearly thirty years in commercial agent law and, to that effect, fully mastering the issues related to the status of the commercial agent, Jean-Charles FOUSSAT and his team advise and assist its clients throughout the life of their commercial agent contracts, including in the event of an international contract, whether it concerns their conclusion, their qualification, their execution, their termination or still their cession.
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