A distributor who sold products on behalf of his supplier claimed that he was entitled to sales agent status. The supplier, for its part, asserted that their relationship was based on a commission agreement and that, accordingly, the distributor had no right to indemnification.
The Versailles court of appeals has ruled in favor of the commission agreement characterization on the ground that:
even though the distributor benefitted from the supplier’s trademark as a shop sign, he had to ‘manifest, in a sufficiently apparent manner, his status as an independent merchant, i.e., in his behavior, his management, his business documents, in the shop window and in the store, so as to avoid any confusion in the eyes of the public’; similarly, whereas the supplier kept ownership of the products, set the terms and conditions of sale and bore the risk of a sales slowdown, the distributor ‘remained an independent merchant, responsible for managing and operating the business, at his own risk and for his own gain’; ‘the clientele belonged to and was loyal to him, as is demonstrated by the fact that, when the contract came to an end, he continued the same business activity under another shop sign.’
Didier Ferrier, agency, distribution and franchising Country Expert for France.