COMPETITION • FRENCH LAW • PRICE TRANSPARENCY
The written agreement is the contract between the supplier and the distributor that summarizes all the obligations to which the parties have agreed in order to fix the price at the end of the commercial negotiation. The agreement may be set out either in a single document or in a package consisting of an annual framework agreement and application contracts. Under the terms of Articles L. 441-3 et seq. (formerly Articles L. 441-7 et seq.) of the Commercial Code, it sets out the terms of the sales transaction as determined during the commercial negotiations, including price reductions, the conditions under which marketing services will be provided, and other obligations designed to facilitate the commercial relationship between the parties.
Prior to the Ordinance of 24 April 2019, there was a general agreement (former Art. L. 441-7) with a very strict formal requirements and agreements with a reduced content, specific to wholesalers (former Art. L. 441-7-1) and subcontractors (former Art. L. 441-9). The 2019 Ordinance modified the scheme and instituted a written agreement with a simplified content compared to the former agreement under Article L. 441-7, common to distributors and wholesalers (new Article L. 441-3), a more cumbersome agreement for consumer goods, which expressly excludes wholesalers (new Article L. 441-4) and an agreement specific to subcontractors (new Article L. 441-5).
Initially required to be signed on an annual basis, as of 1 January 2017, the written agreement may be entered into for a term of one, two or three years, not later than 1 March of the year in which it takes effect or within two months of the starting point of the commercialization period for products or services subject to a particular sales cycle. Where it is multi-annual, the agreement must also lay down the arrangements for revising the agreed price in addition to the basic provisions.
Article L. 441-6 (former Article L. 441-7, II), penalizes any failure to comply with Articles L. 441-3 to L. 441-5 with an administrative fine not exceeding EUR 75,000 for natural persons and EUR 375,000 for legal entities.
