CIRCULAR RELATING TO TRADE NEGOTIATIONS BETWEEN SUPPLIERS AND DISTRIBUTORS
LexInter | October 23, 2018 | 0 Comments

CIRCULAR RELATING TO TRADE NEGOTIATIONS BETWEEN SUPPLIERS AND DISTRIBUTORS

Circular of May 16, 2003 relating to commercial negotiations between suppliers and distributors



The Secretary of State for Small and Medium-Sized Enterprises, Commerce, Crafts, Liberal Professions and Consumer Affairs to Ladies and Gentlemen Prefects

The legal system applicable to commercial relations between suppliers and distributors has known in recent years important changes: the law of July 1, 1996 (known as the Galland law) aimed to improve the transparency and fairness of commercial transactions and to rebalance the relationship between suppliers and distributors, the law of May 15, 2001 relating to new economic regulations has endeavored to moralize commercial practices by defining abusive behavior involving the civil liability of their author and by strengthening the powers of action vis-à-vis these practices.

The purpose of this circular is to specify the legal framework for administrative action, which results from these legislative texts. This is all the more necessary since, since the implementation of these texts, it has been observed, gradually, the shift by companies of the commercial negotiation of the invoiced sale price as it results from the application of general conditions of sale towards price reductions excluding invoice and commercial cooperation, this set constituting what is commonly called the rear margin. The growing importance of these advantages, which do not appear on the sales invoice of the products, but some of which could find their place in the general conditions of sale, is not without influence on the level of prices charged to the

The purpose of the following elements is therefore to recall the provisions of Book IV of the Commercial Code in that they prescribe the transparency rules governing the general conditions of sale while allowing price differentiation. They further clarify the definition of commercial cooperation; in doing so, they pursue a negotiated reduction in rear margins.

These elements in no way call into question the provisions of Articles L. 442-2 et seq. Of the Commercial Code which prohibit the resale or the offer of resale at a loss of a product as is and which help to ensure the loyalty of business transactions. Any breach of these provisions incurs criminal penalties.

Economic partners are also invited to continue improving their business practices on a contractual basis. In this regard, various positive initiatives have been launched, such as the recommendation which received a favorable opinion from the Commission for the Review of Commercial Practices on October 2, 2002 and which called for stabilizing rear margins as well as moderation in tariffs.

This circular replaces, on the one hand, the circular of January 10, 1978 relating to commercial relations between companies (known as the Scrivener circular) with the exception of the list of perishable products, on the other hand,


1. GENERAL CONDITIONS OF SALE


The general conditions of sale must be the starting point for any negotiation between a supplier and a distributor, which may then give rise to special conditions.

The general conditions of sale are established by the supplier whether he is a producer, service provider, wholesaler or importer, in accordance with the principle of transparency which governs relations between suppliers and buyers; they aim to inform the buyer prior to any transaction of the seller’s price list and conditions of sale and constitute the framework for commercial negotiation; they also allow the buyer to ensure that he is not subject to unjustified discriminatory treatment by his supplier. This is why, and although the Commercial Code does not prescribe an obligation to establish general conditions of sale, their drafting is strongly recommended. Moreover, theCass. com. January 18, 1994, Charpentier Publicité c / Havas Régie and TGI Evry January 21, 1992, Min. Eco. c / SA Breadmaking Mellot).

A supplier who would agree to substitute abusive purchasing conditions, often wrongly qualified as general purchasing conditions, for his general conditions of sale, could expose himself to the risk of discrimination as defined in article L. 442-6 (I, 1 °) of the Commercial Code as being: “the fact of practicing with regard to an economic partner, or of obtaining from him prices, payment terms, conditions of sale or terms of sale or

On the other hand, the fact of imposing purchasing conditions insofar as they would imply a waiver by the supplier of his general conditions of sale could be considered as the manifestation of an abuse of purchasing power or abusive discrimination within the meaning of Article L. 442-6 of the Commercial Code.

Suppliers therefore have every interest in establishing general conditions of sale that are as detailed as possible, in particular incorporating more qualitative elements. In addition, they must not include clauses which reflect an abuse of dependence or selling power, just as the purchasing conditions must not include clauses which reflect an abuse of dependence or purchasing power within the meaning of article L. 442-6 of the Commercial Code. .


1.1. The price list


The establishment of a price list is not compulsory. Indeed, it can only exist insofar as the activity in question lends itself to its development (services on estimate are excluded). Likewise, the prices of certain products (in particular agricultural) are subject to price fluctuations which do not allow the establishment of a scale.

Conversely, the seller is not prohibited from establishing several scales that he intends for several categories of customers to whom he markets his products or services and which are not placed on the same market, it is that is to say that are not in competition with each other. In this case, the

The period of validity of these price scales is freely determined.


1.2. Sales conditions


They must show:


Payment conditions


These specify the payment period and the methods of calculation and conditions of application of the penalties applicable in the event of late payment.

They are subject to the provisions of Articles L. 442-6 (I, 1 °) and L. 442-6 (I, 7 °) of the Commercial Code which provides that “engages the responsibility of its author and obliges him to repair the damage caused by the fact, by any producer, trader, industrialist or craftsman:

“1 ° To practice, with regard to an economic partner, or to obtain from him, prices, payment terms, conditions of sale or terms of sale or purchase that are discriminatory and not justified by actual counterparties, thereby creating for this partner a disadvantage or an advantage in competition; …

“7 ° To subject a partner to clearly abusive terms of payment, taking into account good commercial practices and customs, and deviating to the detriment of the creditor, without objective reason, from the time limit indicated in the second paragraph of article L. 441 -6. ”

A late payment means a subsequent settlement date on the invoice of sale within the meaning of Article L. 441-3 of the Commercial Code and which does not, in this, the deadline set by the general conditions of sale or the one contractually negotiated.

In the absence of this indication in the general conditions of sale or of an agreement between the parties, the payment period is set at the thirtieth day following the date of receipt of the goods or of performance of the service.

Late payment penalties run as of right from the day following the payment date shown on the invoice or failing that the thirty-first day following the date of receipt of the goods or the performance of the service.

Penalties may not be less than the amount resulting from the application of a rate equivalent to one and a half times the legal interest rate. There is no provision for a maximum rate. However, and if it is not fixed by the general conditions of sale or agreed between the parties, the rate of late payment penalties is equal to the rate applied by the European Central Bank to its most recent refinancing operation increased by seven points.

The income and expenses corresponding to the late payment penalties mentioned in Articles L. 441-3 and L. 441-6 of the Commercial Code are respectively attached for the determination of the taxable result to income tax or to tax on companies, upon the exercise of their collection and payment.

These provisions apply “to late payment penalties relating to receivables and debts arising between the date of entry into force of law n ° 2001-420 of May 15, 2001 relating to new economic regulations and December 31, 2004” (law of amending finances for 2002, article 20).

Finally, the seller may grant a discount for payment in cash or at a date earlier than that resulting from the general conditions of sale, which, as soon as it is offered to all buyers, must be mentioned in the conditions of payment.


Discounts and rebates


The amount and the terms according to which any buyer can benefit from price reductions, whether they are discounts, discounts or rebates, as well as the conditions under which they are granted must appear in the general conditions of sale.

The general conditions of sale must be communicated to any purchaser of a product or requesting service provision who requests them for his professional activity. However, this obligation does not apply to requests from a competing supplier (CA Versailles April 3, 1997, SA Vertumne c / SA Martin baron).


Discounts


Concerning the mention of the invoice discount, it is necessary to distinguish two rules:

On the one hand, that provided for in paragraph 4 of article L. 441-3 which makes it compulsory to specify the discount conditions applicable in case of payment prior to the date resulting from the application of the general conditions of sale or to that written on the front of the invoice.

This formal but mandatory mention is intended to encourage a reduction in payment terms between companies. If a seller does not wish to grant discounts for early payment, a statement informing the buyer remains essential;

On the other hand, that of paragraph 3 of article L. 441-3which must be understood in the sense that the discount mentioned on the invoice may be deducted from the price to be paid as soon as the parties have established a discount agreement between them ensuring the buyer’s commitment to actually pay within the time limit. which allows to benefit from this advantage. In this case, the discount will be taken into account in the threshold for resale at a loss (see note 1).

The general conditions of sale constitute the framework of the commercial negotiation; they are intended to be applied under the same conditions to all buyers competing on a market. However, they do not prevent a differentiation from being carried out to take into account a particular situation, under the conditions set out below.


2. TARIFF DIFFERENTIATION IS POSSIBLE

WITHOUT FALLING INTO ABUSIVE DISCRIMINATION


It is not forbidden for the buyer to negotiate his conditions of purchase with the seller thus leading to deviate from the general conditions of sale (a). However, on the one hand, the seller is not bound to accept specific requests from the buyer (b), on the other hand, the resulting differential treatment must be justified by a consideration (c).

a) Tariff differentiation can be exercised in various ways:

1 ° The field covered by detailed general conditions of sale offers in itself the possibilities of tariff differentiation of customers with regard to the specificity of their requests.

This is the case, for example, with delivery or packaging methods, specific logistics services, storage conditions, payment terms or differentiated discounts. They may also be firm and irrevocable predetermined purchase commitments for quantities fixed in advance (see note 2).

In addition, the diversity of the situations in which buyers are placed justifies that a seller establishes general conditions of sale differentiated according to the categories of buyers. Thus, a wholesaler and a retailer may be offered different conditions of sale; consequently, the communication of the general conditions of sale is reserved only for the recipients concerned;

2 ° In addition, the price differentiation can result from the negotiation of special conditions of sale, that is to say different from the general conditions of sale because of the specificity of the commercial relationship. These conditions include “qualitative” discounts granted in return for services rendered by the buyer and which cannot be detached from the purchase-sale transaction, such as for example logistics services provided on the occasion of the purchase. product delivery.

Thus a supplier will be able, depending on the commercial negotiation, and in compliance with the invoicing rules, without committing any abuse, either assign a back discount or a discount on invoice. It is not the method of charging the discount (on the sales invoice of the product or off the invoice) that may be a source of abusive discrimination but possibly the amount of the tariff advantages granted if these prove to be devoid of justification. objective. In this case, it is recommended that the parties establish an agreement defining the tariff reductions which will appear on the invoices for the sale of the products.

The objective criteria which govern the negotiation of the special conditions of sale and which are likely to justify a price difference between the customers can be communicated to any buyer who requests the benefit of comparable conditions. On the other hand, the specific agreements themselves are not subject to the communication obligation prescribed by article L. 441-6 of the Commercal Code.

Price reductions that have been negotiated under a particular condition of sale are entered on the sales invoice for the product or service provided they are acquired on the day of the sale. and directly linked to the sale transaction, whether their settlement is deferred or not.

b) The seller is not bound to satisfy any requests from the buyer which are exorbitant from its general conditions of sale. The fact of granting such advantages may lead him to treat his other customers in a discriminatory manner and to engage his civil liability within the meaning of Article L. 442-6 of the Commercial Code . In addition, the seller may not be interested in the services offered by the buyer and which would justify a price reduction not included in the general conditions of sale to be granted to the latter. Likewise, the seller remains free to refuse to sell unless this refusal induces wrongful behavior within the meaning of Article L. 442-6 of the Commercial Code or of Article 1382 of the Civil Code., or affect the play of competition in the relevant market.

c) Negotiating special conditions of sale does not constitute an abuse if any buyer offering the same conditions of purchase can benefit from the same advantages.

The differential treatment of an economic partner is not abusive if it is justified by a real consideration and not manifestly disproportionate. A supplier who does not comply with this principle runs the risk of being requested for compensation on the basis of Article L. 442-6 of the Commercial Code or of Article 1382 of the Civil Code .

It must not reflect an agreement between the operators which would be subject to Article L. 420-1 of the Commercial Code.since its purpose or effect would be to oust operators by denying them the benefit of advantages granted to their competitors, or an abuse of economic dependence within the meaning of Article L. 420-2, second paragraph , of the same text (see note 3).


3. COMMERCIAL COOPERATION

3.1. Definition


Commercial cooperation is a service provision contract, the content and remuneration of which are defined by mutual agreement between a supplier and a distributor. The content of this contract relates to the supply, by a distributor to its supplier, of specific services which can be detached from the simple obligations resulting from purchases and sales ( Cass. Com., February 27, 1990 ). Commercial cooperation agreements must therefore not interfere with the clauses of the supplier’s general conditions of sale, for example with regard to payment terms, unless these constitute an abuse of sales power.

These services cover actions likely to stimulate or facilitate for the benefit of the supplier the resale of its products by the distributor, such as the promotion of products or advertising at points of sale. The allocation of gondola heads or privileged locations also falls under this (TGI Périgueux, February 16, 2000), as well as advertising promotion ( Cass. Crim., October 15, 1996) .

Taking into account the very definition of commercial cooperation, it should be considered that the services rendered by the distributor linked to the operation of purchasing products from the supplier fall within the supplier’s conditions of sale, consequently, such services do not are not part of commercial cooperation but must lead to price reductions.

The very nature of commercial cooperation services does not allow the establishment of a scale since their value varies according to multiple criteria and parameters (TGI Périgueux, February 16, 2000).


3.2. Rules of form


Services rendered under commercial cooperation must give rise to an invoice meeting the obligations of Article L. 441-3 of the Commercial Code. Deducting commercial cooperation from purchase invoices for products by offsetting without the written consent of the suppliers is illegal (TGI Strasbourg, March 16, 1999).

These services must comply with the formalism provided for in paragraph 5 of Article L. 441-6 of the Commercial Code and be the subject of a written contract in duplicate, established before the provision of the service and held by each of the two parts.

In addition, it follows from Article L. 41-3aforementioned that the commercial cooperation invoice must include the exact name and price of the services rendered. This implies that the commercial cooperation contract must make it possible to identify with precision the exact nature of the services rendered, as well as the dates of performance of these services, so that the correspondence between this contract and the distributor’s invoice can be established (CA Paris , June 29, 1998; TGI Lille, December 14, 2001).


3.3. Abusive practices under civil law


Commercial cooperation agreements must not generate discrimination or abuse.

Any request for remuneration for commercial cooperation must correspond to a service actually rendered so as not to place the supplier in a position to grant a customer discriminatory advantages, that is to say without real consideration or relating to a fictitious service. This would be the case with services invoiced by the purchaser for commercial cooperation when they are already the subject of remuneration by way of a reduction in price under the terms of the supplier’s terms of sale, so would be the case. it also of commercial cooperation services, the object of which falls within the very function of the seller; there could be absence of cause within the meaning ofarticle 1131 of the civil code .

Likewise, the benefits requested must not be manifestly disproportionate to the value of the service provided ( art. L. 442-6 [I, 2 °, a] of the Commercial Code ). The disproportionate nature may be assessed in particular with regard to the following elements: variation in remuneration outside of any economic rationality, significant and unjustified reduction in the consistency of the service provided for in the contract, excessive financial participation in a commercial transaction whose interest is not proven ….

Under the terms of Article L. 442-6 (II) of the Commercial Code , “clauses or contracts providing for a producer, a trader, an industrialist or an artisan are void. :

a) To benefit retroactively from discounts, rebates or commercial cooperation agreements; … ”

The retroactive effect of an advantage is assessed by reference to the date of conclusion of the agreement between the parties; thus does not have the retroactive character within the meaning of the aforementioned text the allocation of a rebate at the end of the period (e.g. end-of-year rebate) as long as it was planned on the date of conclusion of contract.

Conversely, counterclaims which lead to retroactively modifying the economy of the initial contract are included in the provisions of the text.


4. THE CONTROL POLICY


Particular attention will be paid to the following points leading to the following:

– the services actually rendered by the buyer but which do not fall within the scope of commercial cooperation within the meaning of the definition given by this circular are remunerated by price reductions falling within the scope of terms of sale of the supplier;

– services without counterpart disappear and that contracts providing for services subject to manifestly disproportionate advantages be rebalanced;

– the formalism of contracts and commercial cooperation invoices is scrupulously respected;

– the transfer of rear margins to front margins takes place gradually, so as not to destabilize the market.

Failure to comply with these rules will lead the public authorities to seize the competent courts, in particular on the basis of the provisions of Article L. 442-6 of the Commercial Code .

The differences in treatment of economic partners which could result from the gradual and negotiated transfer of part of the rear margin to the front margin will be assessed in the light of the efforts made to reduce said rear margins and in compliance with the provisions of article L . 442-6 (I, 2 °, b)relating to the abuse of dependence or purchasing power. In this regard, the control services will admit that a supplier offers his customer a reduced sales price up to the reduction in the rear margin that the co-contractors have agreed to implement. In such a case, they will consider that there is no abusive discrimination since the price differentiation will be the exact counterpart of the reduction in the rear margin.

On the other hand, the control services will strictly apply the provisions of Book IV of the Commercial Code if they find that after the aforementioned transfer of margin all or part of the transferred back margin has been reconstituted or that compensatory advantages not being charged to the sales invoice of the products have been implemented (1). In the application of Article L. 442-6 (I, 2 °, a) , they will take into account the possible existence of new commercial cooperation services, real and justified.

The implementation of these guidelines, which must mobilize all economic partners, in a context of tariff moderation, should lead to significant progress in the direction of better competition and

An examination of the conditions for the implementation of this circular will be carried out during an application period of eighteen months.

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