Unfair commercial practices - Article L442-1 of the French Commercial Code
Objective: Avoid practices that expose the buyer to sanctions for significant imbalance or abrupt termination of an established commercial relationship.
⚖️ Significant imbalance (Art. L442-1, I, 2°)
It is prohibited to subject a commercial partner to obligations creating a significant imbalance in the parties' rights and obligations.
Practices sanctioned by courts:
- Unilateral price reduction clauses without objective criteria
- Asymmetric penalties (supplier penalised, buyer not)
- Unilateral contract modifications benefiting only the buyer
- Overly broad IP assignment without adequate compensation
Sanctions: Nullity of the clause + damages + civil fine up to €5M
✂️ Abrupt termination (Art. L442-1, II)
Protects suppliers (and buyers) in long-standing established commercial relationships.
Key rule: The notice period must be proportionate to the duration of the commercial relationship.
Case law: approximately 1 month of notice per year of relationship
General maximum: 18 to 24 months
General maximum: 18 to 24 months
Emergency exception: Notice may be reduced or waived in the event of a serious breach by the other party or force majeure.