Commercial Agent Rights and Duties in France

What are a commercial agent's rights and duties under French law?

A commercial agent's rights and duties flow from a single characterisation: the agency contract is a common-interest mandate (mandat d'intérêt commun). Article L 134-4 of the French Commercial Code (Code de commerce) states that the contract is concluded in the common interest of the parties, and that their relationship is governed by reciprocal duties of loyalty and information. Because the interest is shared — the agent builds a customer base that also benefits the principal — the duties run both ways, and the agent's rights are the counterpart of the principal's obligations.

The agent's duties fall into three groups: performing the mandate (prospecting, negotiating, and where empowered concluding contracts, with the diligence of a professional); loyalty and non-competition; and information and account. The principal's duties are the reciprocal set: to act loyally, not to hinder the agent, to supply the means to perform, to inform, and to pay. This article sets out both sides. Two related topics have their own detailed treatment: how commission is calculated and when it is earned, and what happens to these duties when the contract ends.

The important structural point is that most of these duties are mandatory. Article L 134-16 deems unwritten any clause or agreement that derogates, to the agent's detriment, from the core protective rules — including the reciprocal loyalty and information duties. A principal cannot draft its way out of them.

A commercial agent's core duty: performing the mandate

As an agent, the commercial agent must carry out the mission entrusted to it, applying the principal's instructions on the negotiation and, where applicable, the conclusion of contracts, and rendering account of its management. That is the baseline duty of any agent under the ordinary law of mandate, sharpened by the professional nature of the commercial agent's activity.

Prospecting and negotiating

Negotiating with potential customers is the mission most often entrusted to a commercial agent. The agent canvasses the customer base, presents the products or services, and promotes them. Acquiring the necessary knowledge of the market, the products and the services carries with it a duty to follow the training the principal provides, and to request the information it needs. Where the agent's negotiating power is limited by a mandate fixing the sale conditions precisely, that limit can, if pushed far enough, expose the contract to requalification; where a genuine negotiating power is granted, the parties usually add an indicative mandate or an "over-sale" clause allowing the agent to negotiate a price above the principal's floor.

Concluding contracts, where empowered

The conclusion of contracts in the principal's name is, in practice, rarely entrusted to the agent. Where it is, the agent must conform strictly to the principal's instructions, except where adaptations are needed to secure the "necessary consequence and obligatory preliminary" of the contract it is charged with concluding, or to protect the principal's interests. The agent owes a duty of diligence: it must show initiative but also prudence, and it is liable if it binds the principal to a customer whose insolvency is known.

Complementary acts

Following on from negotiation and the conclusion of sales, the agent often accompanies the performance of the business with material acts — delivery, customs clearance, installation of the products at the customer's premises — and sometimes legal acts, such as recovering unpaid sums from defaulting customers. These are extensions of the mission rather than separate mandates.

A commercial agent's duty of loyalty and non-competition

The duty of loyalty that binds every agent in performing its mission is expressly stated for the commercial agent by Article L 134-4. Loyalty implies, in principle, a duty not to compete with the principal, and it can found a duty of exclusivity. It also requires the agent to inform the principal of its takeover by a competitor of that principal, and, where the contract so provides, to seek the principal's approval of such a change. The agent is further expected to adapt its conduct to the principal's economic difficulties. Disloyalty in this sense is not the same thing as an act of unfair competition; the two do not automatically coincide.

On non-competition during the contract, the agent — as an independent agent — may accept the representation of new principals, but Article L 134-3 provides that it may not accept the representation of an undertaking competing with one of its principals without that principal's consent. Whether products are competing is assessed with some latitude in the agent's favour; goods that are complementary and not interchangeable are not competing, so representing them is not a breach (Cour de cassation, chambre commerciale, 10 November 2015, no. 14-14.820). Agents are frequently authorised to carry non-competing or even, by agreement, competing lines, so that each principal benefits from the synergy between the products presented.

Loyalty also governs how the agent conducts itself in the interest it shares with the principal. Where an agent also represents the customer and receives a double commission, it must disclose that fact; concealing it distorts the commercial negotiation and deprives the principal of the chance to obtain better terms (Cour de cassation, chambre commerciale, 20 September 2016, no. 15-12.994). At the same time, the loyalty duty is not triggered by every contact with a competitor: a single meeting to explore a possible collaboration, which comes to nothing, is not in itself a breach grave enough to cost the agent its rights (Cour de cassation, chambre commerciale, 14 April 2021, no. 18-13.763).

A commercial agent's duty to inform and to account

The agent must keep the principal informed of the steps taken in performing the mission, and of their results and the situation of the customers. The regulatory rule is explicit: the agent must communicate to the principal all information necessary to the performance of the contract (Article R 134-1). This reporting duty cannot be pushed too far without risking requalification of the agency into a salaried-representative or employment relationship, but within that limit it extends to useful intelligence on the market and on the principal's competitors — the launch of new products, the arrival of a new supplier — and, for agents with real market competence, can shade into a role in shaping the principal's commercial policy. In contracts covering foreign markets, where regulatory standardisation and commercial uncertainty require the products or the sale conditions to be adapted, the agent must flag the applicable standards and, where appropriate, advise on market-adjusted prices.

As an agent, the commercial agent must also render account of its management and account to the principal for everything it has received by virtue of its authority, even where what it received was not due to the principal (Civil Code, Article 1993). At the end of the mission, or at the agreed time for accounting, it must return the goods the principal entrusted to it and the sums collected on the principal's behalf, with interest at the legal rate if it has used them for its own purposes or been put on notice to return them.

The principal's duties — the other side of the commercial agent's rights

Because the mandate is one of common interest, the principal owes the agent a reciprocal duty of loyalty under Article L 134-4, and the agent's rights are largely the enforcement of the principal's obligations.

Not to hinder the agent

The principal must not obstruct the agent in performing the mission. It can be sanctioned if it prevents the agent from working — by failing to supply the products — or if it intervenes directly in the territory entrusted to the agent, whether or not that territory is exclusive, or appoints other agents in a territory granted exclusively. The duty has limits the case law has drawn: selling its products online does not, in itself, prevent an exclusive agent from performing the mandate; and the principal may grant customers direct rebates larger than those the agent could allow, provided it informs the agent. It was held, in the leading case, that the principal must put the agent in a position to offer prices competitive with those of a reseller (Cour de cassation, chambre commerciale, 24 November 1998, Chevassus-Marche).

To inform and to train

The principal must give the agent the means to develop the business. It must supply the useful documentation on the products or services, with samples where appropriate, and the information necessary to perform the contract — including the sale conditions and the market data it holds. The regulatory rule requires the principal to warn the agent, within a reasonable time, of a foreseeable significant fall in the volume of orders the agent could normally have expected, and to inform it, within a reasonable time, of its acceptance, refusal or non-performance of a piece of business the agent has brought (Article R 134-2). In some cases the principal must also train the agent so that it can master the specifications of the products or services and their sale conditions.

To pay, and to enable performance

The principal must pay the agent the remuneration due, together with the costs and losses the agent has borne in performing the mission (Civil Code, Articles 1999 and 2000), although it is generally agreed that those costs are covered by the commission. Above all, the principal must put the agent in a position to perform its mandate (Article L 134-4). Any clause derogating from these duties to the agent's detriment is deemed unwritten (Articles L 134-16 and R 134-4).

A commercial agent's right to remuneration

The central right the agent enforces is the right to be paid. The commercial agent is remunerated by a commission geared to the number or value of the business concluded through it. Where the contract is silent on remuneration, the agent is entitled to remuneration in line with the usages of the sector it covers where it operates, and, failing any applicable usage, to a reasonable remuneration taking account of all the elements of the business (Article L 134-5).

The right to commission is protected in mandatory terms: the rules on when commission is earned and on its base cannot be derogated from to the agent's detriment. It extends, in defined circumstances, to business concluded with customers the agent previously acquired, to business in an exclusive territory even where the agent did not handle the particular sale, and to certain business concluded after the contract ends. How the commission base, the triggering event and the timing work in detail — and how they interact with the mandatory floor of Article L 134-16 — is a subject in its own right, treated in the dedicated article on a commercial agent's commission.

Optional duties the parties can add to a commercial agent's contract

Beyond the mandatory core, the parties can add duties by agreement, within the limits the statute sets.

The most common is the del credere (ducroire). By a del credere agreement, and usually for additional remuneration, the agent can guarantee — unless otherwise stipulated — the customer's failure to pay at maturity, and not merely the risk of insolvency. It is generally agreed that the agent's liability is limited to a part only of the unpaid sums. The del credere is a personal security, and it is enforceable within the ordinary limits of such guarantees.

A post-termination non-competition duty can also be added, but only within strict statutory limits. Under Article L 134-14, such an undertaking is valid only if it is in writing, limited to the geographic sector or the customers and the type of goods covered by the contract, and limited to two years after the contract ends. Even within two years, a clause is void if it prevents the former agent from carrying on any professional activity at all, and no financial consideration is owed for it unless the contract provides otherwise. The mechanics and the risks of this clause belong to the treatment of termination; it appears here because it is a duty the parties frequently add.

Frequently asked questions about commercial agent rights and duties

Can a commercial agent represent more than one principal?

Yes. As an independent agent, a commercial agent may accept the representation of new principals. What it may not do, under Article L 134-3, is represent an undertaking competing with one of its principals without that principal's consent. Complementary, non-interchangeable products are not treated as competing.

Does a commercial agent owe a duty of exclusivity to its principal?

Not automatically. The agent owes loyalty and a duty not to compete, but exclusivity exists only if the contract imposes it. An exclusivity obligation must be calibrated carefully, because if it removes the agent's independence it can requalify the contract as a salaried or employment relationship.

What must the principal do for the commercial agent?

The principal must act loyally, not hinder the agent, supply the products and the means to perform, provide documentation and market information, warn of a foreseeable fall in orders, report its acceptance or refusal of business, and pay the commission. These duties are the reciprocal side of the common-interest mandate.

Can the parties reduce a commercial agent's rights by contract?

Not below the mandatory floor. Article L 134-16 deems unwritten any clause derogating, to the agent's detriment, from the core protective rules — including the reciprocal loyalty and information duties and the commission-timing rules. The parties can add duties, but they cannot cut the protected ones down.

Is a commercial agent liable if a customer does not pay?

Only if it has given a del credere guarantee. By a del credere agreement, usually for extra remuneration, the agent can guarantee the customer's payment, and its liability is generally limited to part of the unpaid sums. Without such a clause, the agent does not answer for the customer's default.

Can a commercial agent be bound not to compete after the contract ends?

Yes, within strict limits. A post-termination non-competition clause is valid under Article L 134-14 only if it is in writing, limited to the sector, customers and goods of the contract, and limited to two years. It is void if it prevents the agent from carrying on any professional activity, and no compensation is owed for it unless the contract provides otherwise.

Key takeaways

How our French lawyers help with commercial agent rights and duties

This article is for general information only. It does not constitute legal advice. The rights and duties of a commercial agent are highly fact-specific. Contact our French lawyers for qualified advice before relying on any provision of your agency contract or taking any step in a dispute over a party's obligations.