Judgment of the Paris Court of Appeal of 6 November 2019 on the single agreement and the significant imbalance in the relationship between an car manufacturer and a distributor

The Paris Court of Appeal had to rule on disputes raised by an automobile distributor concerning the single agreement proposed by a car manufacturer (represented by our firm). The disputes were based on Article L. 441-7 (former) of the French Commercial Code (now Article L. 441-3) governing single agreements and on Article L. 442-6, I, 2° (former), now Article L. 442-1, I, 2°, of the same code relating to significant imbalance. Two main lessons can be drawn from the judgment rendered on 6 November last:

  • there was no subjugation to unbalanced obligations if the distributor was multi-brand and belonged to a large distribution group, which did not reflect an unbalanced balance of power. The single agreement could therefore not be challenged on the basis of Article L. 442-6, I, 2° (former).
  • the supplier wasfree to set a deadline for its distributors to sign the single agreement even if this date was before March 1 (in this case, the agreement had to be returned on December 1 of year n -1). If it was not returned within the time limit, the distributor was not entitled to the variable discounts stipulated in the agreement.

CA Paris arrêt 19.11.06