#Supplier Agreement Lawyer in France

The supplier agreement is the backbone of a company’s supply chain. It sets the prices, volumes, quality, lead times and legal certainty of the relationship. If it is poorly framed, it exposes you to stock shortages, payment disputes and sanctions for restrictive competition practices (pratiques restrictives de concurrence). We assist buyers and suppliers in negotiating, drafting and making these relationships legally sound, from listing to exit.

Who we advise

We advise buying companies (distributors, manufacturers, retail chains) as well as suppliers (producers, wholesalers, service providers). The buyer seeks security of supply, control over prices and quality; the supplier wants visibility over its volumes, sustainable payment terms and protection against sudden delisting. Our role is to balance these interests in a clear agreement that complies with French business law.

Putting the relationship in writing

Between businesses, the relationship is built around the general terms of sale (CGV), which form the basis of the negotiation, and, where applicable, the general terms of purchase (CGA). Where the framework requires it, Article L441-3 of the French Commercial Code (Code de commerce) imposes a written agreement setting out “the reciprocal obligations undertaken by the parties at the end of the commercial negotiation”, concluded for one, two or three years. Far from being a purely administrative constraint, this written agreement records the actual content of the commitments and prevents disputes.

Prices, volumes and payment terms

The agreement must lock down the pricing mechanisms (price lists, revisions, indexation), the volume commitments and, above all, the payment terms. Payment terms are strictly regulated by law: exceeding them exposes you to administrative sanctions. A well-constructed price revision clause absorbs changes in raw material costs without confrontational renegotiation, while a calibrated penalty clause protects delivery lead times.

Significant imbalance: a two-way risk

The law sanctions subjecting a partner to obligations that create a significant imbalance in the rights and obligations of the parties. One-sided penalty clauses, abusive returns, conditions imposed without anything in return: such terms may be annulled and give rise to compensation. The drafting must aim for credible reciprocity, on both the buyer’s and the supplier’s side.

Ending a supplier relationship in France

Delisting a supplier or changing buyer is lawful, but abrupt termination is not. Article L442-1, II, of the Commercial Code makes liable anyone who terminates, “even partially, an established commercial relationship, in the absence of written notice” proportionate to the length of the relationship. Eighteen months’ notice shields you from a claim that the notice period was too short. The economic dependence of the ousted partner lengthens the expected notice period.

An illustrative example of what is at stake

A supplier has generated 70% of its turnover with a single distributor for eight years. A sudden delisting, without written notice, would put it in a critical position: it could then claim compensation for the loss corresponding to the margin lost over the notice period that should have been observed. On the buyer’s side, anticipating this dependence makes it possible to prepare a controlled exit; on the supplier’s side, it justifies diversifying and documenting the relationship.

Quality, compliance and product liability

A supplier agreement is not limited to price and lead times: it must organise the quality and compliance of the products delivered. Technical specifications, applicable standards, inspection procedures on receipt, handling of non-conformities and returns: these terms determine who bears the risk of a defective product. If a defect arises, liability operates at several levels: contractual warranty, warranty against hidden defects and, for products placed on the market, liability for defective products. A poorly coordinated contractual chain can leave the buyer alone facing the end customer, with no effective recourse against its supplier.

Traceability is decisive here. A product recall procedure, an insurance clause and a clear allocation of liability between supplier, importer and distributor prevent the failure of one link from turning into exposure for the whole chain.

Exclusivity, dependence and security of supply

Exclusive supply clauses and volume commitments stabilise the relationship, but they create a dependence that must be measured. Too rigid, they lock you in; too loose, they weaken continuity. Competition law also regulates non-compete and exclusivity obligations, whose duration and scope must remain proportionate. The challenge is to reconcile security of supply with the freedom to diversify your sources, while anticipating scenarios in which the supplier fails (stock shortage, insolvency, sudden cost increases).

Points to watch

• Strictly comply with statutory payment terms.
• Aim for reciprocity to avoid a significant imbalance claim.
• Provide for objective price revision clauses to deal with cost increases.
• Document the length and volume of the relationship with a view to any termination.
• Update the written agreement within the statutory deadlines.

How we act

• Drafting and negotiation of general terms of sale (CGV), general terms of purchase (CGA) and supplier agreements.
• Making price, payment and penalty clauses legally sound.
• Audit of significant imbalance and restrictive practice risks.
• Handling terminations and abrupt termination disputes.
• Debt recovery and late payment disputes.

Your legal team

Lead lawyer

Maître Arnaud Touati

Partner and co-founder

View profile ↗

Background Maître Arnaud Touati

His practice covers entrepreneurship, digital law, personal data law and Web3 law.

Before founding Hashtag Avocats in 2015, Arnaud practised business law at many Anglo-American law firms in Paris and at major investment banks, as well as within mid-sized organisations. His passion for technology naturally led him to found Hashtag Avocats with Maître Harry Allouche, with the aim of developing a practice dedicated to artificial intelligence, data protection (GDPR, ethics) and above all blockchain (ICO/STO, NFT, Web 3.0).

Arnaud is also a member of the Paris Bar incubator. He teaches at the Paris Bar school (École de Formation du Barreau) and at several well-known business schools. He also takes part in many workshops and events within the start-up ecosystem.

Maître Elise Hausherr

Associate lawyer in the IP-IT contracts practice

Background Maître Elise Hausherr

Her practice covers personal data law, digital law and Web3 law.

Elise trained in both business law and at a business school. Before joining Hashtag Avocats in 2021, Elise gained eight years of experience at a large technology consulting firm. During that time, she led complex transformation projects for large French and international companies in the industrial sector. Today, she assists clients by resolving their legal issues while bringing her operational experience. Since joining the firm, Elise has developed the Fintech/Blockchain/NFT and GDPR practices. She has also set up internal tools to improve the firm’s processes.

Maître Nathan Benzacken

Lawyer in intellectual property and digital law

Background Maître Nathan Benzacken

His practice covers digital law and intellectual property. He built his experience in in-house legal departments, notably in the audiovisual and film sectors, and at law firms handling copyright, trade mark law, consumer law, personal data law and press law.

With a strong interest in the constant changes and ever-renewed challenges of the digital world, Nathan has, since joining the firm, broadened his skills to include crypto-asset and blockchain law.

Frequently asked questions

Can you change supplier overnight?

If the relationship is established and long-standing, no: proportionate written notice is required, or you risk liability for abrupt termination (Article L442-1, II).

Is an unbalanced penalty clause valid?

It may be challenged as a significant imbalance if it imposes obligations without reciprocity or anything in return. Reciprocity is the most effective protection.

Checklist for a well-managed supplier agreement

• Put CGV/CGA and the written agreement in place, updated within the statutory deadlines.
• Lock down prices, volumes, revisions and payment terms that comply with the law.
• Define quality, inspections on receipt and the handling of non-conformities.
• Organise traceability, product recall and the allocation of liability.
• Calibrate exclusivity and volume commitments in light of competition law.
• Document the length and volume of the relationship with a view to any termination.
• Provide proportionate written notice before any termination.

Official sources

• Article L441-3 of the French Commercial Code, written agreement: Légifrance (in French)
• Article L442-1 of the French Commercial Code, restrictive practices and abrupt termination: Légifrance (in French)

Every situation is different and we make no promise of outcome. To make your supply relationships legally sound, our commercial and distribution law lawyers assist you.