What Is a Mandate of Common Interest (Mandat d'Intérêt Commun) in France?

What is a mandate of common interest?

An intermediary who acts as a mandatary — canvassing customers and gathering orders in a principal's name — is, in the ordinary case, governed by the general civil law of mandate. But some intermediaries do more than conclude sales for the principal: they participate in creating or, at the least, developing the principal's clientele, and so become economically associated with the growth of the principal's business. It is for this kind of intermediary that the courts developed the special regime of the mandataire d'intérêt commun — the common-interest mandatary — to protect it against the precariousness inherent in ordinary mandatary status. This judge-made protection came first, developed by the courts over more than a century; the legislature later reinforced it, for a defined category, through the commercial-agent statute.

The common-interest mandatary habitually diffuses products or services in the name and on behalf of the principal, canvassing a clientele and gathering orders. What sets it apart from an ordinary mandatary is that its activity builds a customer base for the principal — a base that generates, for the intermediary, a repeating flow of commissions. The interests of the two parties are thereby bound together in the growth of a shared clientele, and that binding is the very "common interest" from which the whole regime takes its name.

The problem it solves: a mandate revocable at will

The regime exists to cure a hardship built into the ordinary law of mandate. Under Article 2004 of the Civil Code, a mandate is revocable at will (ad nutum): the principal may end it at any moment, without notice and without indemnity. That makes sense for a mandate performed as a favour — its end simply releases the mandatary — but not for one performed professionally, where the end of the mission strips the mandatary of the fruit of its efforts: it will no longer be paid on the sales the principal goes on to make with the clientele the mandatary won and retained. It seemed abnormal that a mandatary, having rallied a clientele to the principal's products, could be cut off so brutally from the results of its work.

The ordinary rule compounds the difficulty. Because the relationships pass directly between the principal and the customer, the clientele is attached to the principal, who may, after the mandate ends, keep dealing with those customers — while the former mandatary has, in principle, no right over that clientele and no indemnity for its "loss." Attempts to soften this failed at first: the courts treated Article 2004 as merely default (so an indemnity clause was valid), but also held that a principal could revoke unilaterally without, by that fact alone, incurring liability for abuse. A different route was needed, and the courts found it in the idea of common interest.

The story is, in part, one of shifting bargaining power. When mandataries were in a strong position — an intermediary with an excellent knowledge of a market unknown to the producer often has the upper hand — they simply imposed indemnity clauses on their principals, and those clauses were upheld, Article 2004 being only a default rule. When the balance later tilted the other way and principals refused any indemnity, the mandataries fell back on arguing that the principal had abused its right to terminate; but that argument foundered, since the principal could revoke unilaterally without, by that alone, incurring liability. It was against this background that the courts fashioned the common-interest mandate as a durable, structural protection that did not depend on the mandatary's negotiating strength of the moment.

The notion of common interest

To protect the mandatary, the courts identified a "common interest" between principal and mandatary wherever there is an interest of both in the growth of the enterprise through the creation and development of the clientele — that is, wherever the profit of the mandatary and that of the principal are linked in and by the increase of the clientele, and this even though only the principal holds a right over that clientele. The characterisation rests on a convergence of interests that is both real and durable.

It is a convergence because, in a mandate aimed at diffusion, each operation profits both parties — unlike the traditional mandate, where the mandatary intervenes altruistically, in the sole interest of the principal. And it is durable because the operations are meant to repeat with a clientele — unlike the ordinary mandate, where the mandatary acts, in principle, on a one-off basis. The common interest thus expresses the idea that the contract is not concluded in the sole, self-regarding interest of the principal: the altruism that attaches to the traditional mandate is altered. The courts have applied the analysis, for example, to the relationship between a newspaper and a press distributor charged with retaining and developing a shared clientele, where the distributor's commissions varied with the sales it made and termination cost it that turnover.

The first consequence: an indemnity on unjustified termination

The common interest changes the law of termination. It follows, the courts hold, that the mandate cannot be revoked by the sole will of one party, but only by the mutual consent of both, for a legitimate cause recognised in court, or in accordance with the conditions and clauses stipulated in the contract. Where the common-interest mandate is terminated at the principal's initiative, without the termination being justified by a legitimate cause, the mandatary has a right to an indemnity compensating the harm it has suffered.

That indemnity does not represent the value of a right over the clientele — the intermediary acts as a mandatary and has none — but repairs the harm consequent on losing the right to canvass a clientele and to profit from it by earning commissions. On the decisions rendered, that harm generally corresponds, on the decisions rendered, to about two years of commission. The parallel with the commercial agent's indemnity is plain, and not coincidental: the two protections share a rationale and a rough measure.

The escape hatch of "legitimate cause" is, however, broadly understood, and a principal has many ways to defeat the indemnity. Beyond the mandatary's own fault, the courts have accepted as a legitimate cause a real and justified reorganisation of the enterprise, competition from a powerful operator, a negative evolution of the market, a cessation of activity, a cessation of production of the products concerned, the disappearance of the profit the principal drew from marketing them, and even the departure of the "key person" of the client enterprise. The protection, in other words, is real but far from absolute.

The decisive weakness — and why the agent statute exists

For all its ingenuity, the protection of the common-interest mandatary has a fundamental weakness: it is only a default rule (supplétif). Because the regime supplements the parties' agreement rather than overriding it, the contract may validly stipulate that no indemnity at all is due on termination. A principal that drafts with care can therefore contract out of the very protection the common interest was designed to give — which makes the regime, in practice, a weak shield.

This weakness is the reason the commercial-agent statute was created. Where the intermediary qualifies as a commercial agent, the legislature reinforced the judge-made protection and made it mandatory: the agent's termination indemnity is a matter of public order and cannot be excluded in advance. The common-interest mandate and the commercial agency are therefore best understood as two layers of the same idea — the protection of an intermediary who builds a clientele for a principal — with the agency statute the stronger, non-waivable layer, and the common-interest mandate the older, weaker fallback for those who fall outside it.

Who is a common-interest mandatary — and who is not

The category is populated chiefly by intermediaries who canvass and develop a clientele in the principal's name without being either employees or independent buyers-and-resellers. Independent home sellers and home-party sellers — who gather potential customers at a volunteer host's home and offer them products to order from the principal — are the archetypes. The independent home seller (vendeur à domicile indépendant) is defined by the Consumer Code and works under a written mandatary agreement with the business whose products it sells; where its activity continues for three consecutive years and its revenue reaches a set threshold, it must register with the trade and companies register or with the special register of commercial agents, and, though non-salaried, it is attached to the general social-security scheme. Such a seller may also provide services to develop and animate the network of independent home sellers, to favour the marketing of the products — but without being their employer or in any contractual relationship with the network's sellers. The Commercial Code reinforces this separation with an anti-pyramid safeguard: no remuneration may be paid by one seller to another, and no purchase may be made by one seller from another. The home-party variant works within the same frame — a seller gathers potential customers at a volunteer host's home and offers them products to order from the principal — so that, throughout, the sale is the principal's and the seller's reward is the commission on the business it generates for the principal.

Equally important is who falls outside the category, because the boundary is where disputes arise. A broker that merely signals possible clients is not a common-interest mandatary — a "pseudo-mandatary" of that kind is a broker. And an intermediary that does not conclude in the name and on behalf of the supplier is not a common-interest mandatary either: the distributor of telephone subscriptions who concluded no contract for the supplier's account was held not to qualify. The common thread is that the mandatary must genuinely act in the principal's name and build the principal's clientele; absent that, the protective regime does not apply.

Where it sits among the intermediaries

The common-interest mandate is best located by contrast with its neighbours, because the same question — is a clientele-based indemnity owed on termination? — is answered differently for each. The answer turns on two things: whether the intermediary builds the principal's clientele, and how strong the protective regime is.

The commission agent is instructive here. It, too, is an intermediary, but it acts in its own name and, precisely because it masks the true seller from third parties, it is the holder of its own clientele. For that reason the courts refuse it any indemnity analogous to the agent's on termination: only a mandate of common interest — where the intermediary develops the principal's clientele — justifies such an indemnity. The broker, for its part, cannot claim the common-interest mandatary's indemnity at all, because it is not a mandatary; it merely signals possible clients and does not conclude in the principal's name. And the VRP reaches a comparable protection — the customer indemnity — but through an entirely different route, that of employment law, because it is a salaried representative rather than an independent mandatary. The common-interest mandatary occupies the space these others leave: an independent intermediary that concludes in the principal's name and builds the principal's clientele, and is protected for it, but only by a default regime.

This mapping is why the common-interest mandate matters even though few contracts are labelled that way. It is the residual protection that catches intermediaries who develop a principal's clientele in its name but do not fit the commission agent (own name), the broker (no conclusion), the VRP (employment) or the registered commercial agent. For a foreign principal, it means the relevant question is never the label alone but the substance: does this intermediary build my clientele in my name, and if so, which of these regimes governs the day it ends?

The second consequence: an implied non-compete

The common interest also shapes the mandatary's obligations during the relationship. The courts hold that the common interest carries, of full right, a non-compete obligation on the mandatary while the contract is being performed — the mandatary cannot compete with the principal whose clientele it is charged with building — and, more debatably, some decisions extend that obligation beyond the termination of the contract. This mirrors the loyalty the law expects of the commercial agent, and it is the counterpart of the protection the mandatary receives: an intermediary that shares in the growth of the principal's clientele is expected not to work against it.

For a foreign company, the practical significance of the whole regime is twofold. First, an intermediary it engages to canvass and develop its French clientele may enjoy this protection even if it is not a registered commercial agent — so the absence of the agent label does not guarantee the absence of a termination indemnity. Second, because the regime is only default, the company can, by careful drafting, define the termination consequences in advance — a possibility it does not have with a true commercial agent. Knowing which regime governs, before the relationship ends, is therefore as important here as everywhere else in this field — and, given that the common-interest indemnity can be excluded by an express clause, it is a question best settled in the contract at the outset rather than litigated at its close.

Frequently asked questions about the mandate of common interest

What is a mandate of common interest in France?

It is a mandate in which the intermediary develops the principal's clientele and is economically associated with the growth of the principal's business. Because their interests converge in the clientele, the courts hold that the mandate cannot be revoked by one party's sole will, and that its unjustified termination gives rise to an indemnity.

How is it different from an ordinary mandate?

An ordinary mandate is revocable at will, without notice or indemnity (Article 2004 of the Civil Code). A common-interest mandate is not: it can be ended only by mutual consent, for a legitimate cause recognised in court, or per the contract, and unjustified termination by the principal triggers an indemnity.

How much is the indemnity?

It repairs the harm of losing the right to canvass the clientele and earn commissions, and on the decisions rendered it generally corresponds to about two years of commission. It is not the price of a right over the clientele, which the mandatary does not have.

Can the indemnity be excluded by contract?

Yes. This is the regime's key weakness: it is only a default rule, so the contract may validly stipulate that no indemnity is due on termination. This is unlike the commercial agent's indemnity, which is public order and cannot be excluded in advance.

Who qualifies as a common-interest mandatary?

Typically independent home sellers and home-party sellers, and other intermediaries who canvass and develop the principal's clientele in its name. A broker that only signals clients, and an intermediary that does not conclude in the principal's name, do not qualify.

What defeats the indemnity?

A "legitimate cause," which the courts read broadly: the mandatary's fault, but also a genuine reorganisation of the business, competition from a powerful operator, a market downturn, a cessation of activity or of production, the loss of the principal's profit from the products, or the departure of a client's key person.

Key takeaways

How our French lawyers help with common-interest mandates

This article is for general information only. It does not constitute legal advice. Whether a mandate is one of common interest is fact-specific. Contact our French lawyers for qualified advice before appointing an intermediary or on a termination.