An automotive parts maker in the Arve valley has been buying bar-turned parts since 2014 from a Portuguese subcontractor in Braga, which makes nearly 40% of its turnover with it. In June 2026, a Moroccan supplier offers the same product 18% cheaper. The purchasing department decides to move the volumes over three months and sends the Portuguese subcontractor a letter announcing that orders will stop on 30 September. No framework agreement was ever signed. The subcontractor replies that it will bring proceedings before the specialised commercial court in Lyon under Article L. 442-1 of the French Commercial Code, and claims eighteen months of gross margin.
This page looks at what a French company risks when it ends a relationship with a foreign supplier: the provision that penalises abrupt termination and the new case added in August 2026, the length and content of the notice, the exceptions, then the question, now pending before the Court of Justice of the European Union, of whether a foreign supplier can rely on that provision, and before which court. It ends with an exit method that holds whatever answer comes from Luxembourg.
1. A buyer can be liable for termination like anyone else
Article L. 442-1, II of the French Commercial Code makes liable any person engaged in production, distribution or services who abruptly terminates, even partially, an established commercial relationship without written notice that takes into account, in particular, the length of the commercial relationship, by reference to trade usage or inter-professional agreements (French Commercial Code, Art. L. 442-1, II). The provision makes no distinction according to who ends the relationship. It was in fact designed first to protect suppliers against their customers.
Three conditions must be met. An established commercial relationship, assessed by its stability, regularity and duration, with or without a written contract, which twelve years of successive purchase orders easily satisfy. A termination, total or partial: a significant drop in volumes, delisting part of the product range or a unilateral change in pricing terms may be enough. And abruptness, which lies in the absence or inadequacy of written notice.
The recoverable loss is in principle the margin the victim would have earned over the missing notice period. The termination itself is not wrongful. Its abruptness is. The buyer remains free to change supplier; it simply has to give the supplier time.
2. August 2026: cutting volumes as a negotiating lever
Law No. 2026-796 of 18 August 2026, an emergency law on agricultural protection and sovereignty, supplemented paragraph II of Article L. 442-1. Liability may now also arise from implementing, in the course of negotiating a contract, a substantial reduction in the volume of orders placed with a commercial partner, including a temporary one, if its scale, its unusual nature or the conditions in which it takes place are liable to undermine the balance of the established commercial relationship (French Commercial Code, Art. L. 442-1, II, para. 2, in force since 20 August 2026).
The provision targets a widespread buyer practice: cutting orders sharply during the annual negotiation to obtain a price reduction, then restoring them. The practice did not entirely escape the previous regime, as a partial termination, but characterising it required showing some form of termination. It is now covered as such, even when temporary.
The same law added a related practice to paragraph I of the provision: subjecting a partner to repeated competitive tendering or calls for tender whose frequency or terms create a significant imbalance (French Commercial Code, Art. L. 442-1, I, 6°). A buyer that puts its long-standing supplier out to tender every quarter to push prices down now has to weigh that risk. Although adopted in an agricultural context, the law amended a provision of general scope: it applies to every sector.
3. Notice: written, proportionate, performed
Notice must be in writing. An oral announcement in a meeting, a gradual unexplained decline in orders or an ambiguous email mentioning “a review of our sourcing strategy” do not start a notice period.
Its length takes into account, in particular, how long the relationship has lasted, trade usage and inter-professional agreements. The courts also consider how dependent the victim is, the share of its turnover made with the terminating party, the specific investments it made and the time needed to find other outlets. The provision sets a ceiling: in a dispute over the length of notice, the terminating party cannot be held liable for insufficient notice if it gave eighteen months’ notice (French Commercial Code, Art. L. 442-1, II, para. 3). There is no scale, and it would be unwise to invent one; twelve years of relationship and 40% of turnover, as in the Braga example, call for a notice period counted in many months, not in weeks.
Finally, the notice must actually be performed. Throughout its duration, the relationship must continue on comparable terms: volumes, prices, payment terms. The provision states that the price applicable during the notice period takes into account the economic conditions of the market in which the parties operate. A twelve-month notice period during which orders fall to zero from the second month is not notice. It is a termination delayed by one month.
Conversely, a longer notice period than strictly necessary may allow volumes to be phased down, provided the arrangements are announced from the outset. It is often the best industrial solution: it gives the supplier time to reorganise and the buyer time to qualify its new supplier.
4. The exceptions: non-performance and force majeure
Paragraph II does not prevent termination without notice where the other party fails to perform its obligations or in the event of force majeure (French Commercial Code, Art. L. 442-1, II, last para.). A buyer whose supplier repeatedly delivers non-conforming parts, or refuses to deliver at the agreed price, does not have to give notice. The non-performance must still be serious enough and proven, which the courts assess strictly; old grievances that were never put in writing and are conveniently raised at the moment of termination rarely convince.
How this provision combines with the law on international sales deserves attention. A foreign supplier that refuses to deliver may commit a fundamental breach within the meaning of the Vienna Convention, which allows the current sales contract to be avoided; that does not necessarily mean the overall commercial relationship has been lawfully ended. The breach has to be documented and notified, and avoiding one order has to be distinguished from ending the relationship.
An unjustified price demand, repeated quality defects, documentary fraud, listing on a sanctions list or a decision by an authority prohibiting the products from being placed on the market are all situations in which immediate termination may be justified. A framework agreement benefits from listing them.
5. Can a foreign supplier rely on the provision?
This is where French law becomes uncertain, and the uncertainty has a price. The answer depends on whether the claim for abrupt termination is contractual or tortious under the European rules of private international law.
On jurisdiction, the Court of Justice has held that a claim for damages based on the abrupt termination of a long-standing commercial relationship is not a matter relating to tort if there was a tacit contractual relationship between the parties, which it is for the national court to verify on the basis of a set of indications (CJEU, 14 July 2016, Granarolo, Case C-196/15). Four years later, it held that a claim based on breach of a legal obligation independent of the contract is a matter relating to tort where interpreting the contract is not indispensable to assess the conduct complained of (CJEU, 24 November 2020, Wikingerhof, Case C-59/19). The two judgments are hard to reconcile.
The Cour de cassation, for its part, has reaffirmed that, in international matters and outside the scope of EU law, a claim based on Article L. 442-1, II is tortious (Cass. 1re civ., 12 March 2025, No. 23-22.051). Three weeks later, it asked the Court of Justice whether, under the Rome Convention and the Rome II Regulation, such a claim is a matter relating to tort, as Wikingerhof suggests, or to contract, as Granarolo indicated (Cass. 1re civ., 2 April 2025, No. 23-11.456). As of the date of this page, the Court of Justice has not ruled. We are therefore reasoning about what the law is likely to become.
6. Two scenarios depending on Luxembourg’s answer
If the claim is contractual, the applicable law is the law of the contract. Absent a choice, for a purchasing relationship, that is in principle the seller’s law (Regulation (EC) No 593/2008, Art. 4(1)(a)), which in the Braga example means Portuguese law. Article L. 442-1 could then apply only if it were characterised as an overriding mandatory provision, which applies whatever the law of the contract. That question is debated, and several lower courts have decided it in opposite directions.
If the claim is tortious, the applicable law is in principle that of the country where the damage occurs (Regulation (EC) No 864/2007, Art. 4(1)). For a Portuguese supplier losing its main customer, the damage most likely occurs in Portugal, which again leads to Portuguese law, unless an escape clause based on a manifestly closer connection with France is applied.
In both cases, French law is therefore not a given for the foreign supplier. But it is not closed to it either, and several European legal systems have comparable mechanisms based on good faith or abuse of rights. None of this means the French buyer can ignore the question. The supplier will sue in France anyway, where its customer’s assets are. It will plead the overriding mandatory provision or the escape clause, and it may obtain a stay of proceedings pending the Court of Justice’s answer. For the two or three years that preliminary debate lasts, the buyer will carry in its accounts a dispute whose governing law and outcome it does not know, with the defence costs, the provision and the management attention that implies, when a properly calibrated notice period would have closed the debate before it opened. That is the real cost. The paradox is worth stating plainly: the most debated legal question in international abrupt-termination litigation changes almost nothing about how a prudent buyer should behave.
7. Before which court
In domestic French law, disputes under Article L. 442-1 are heard by a small number of specially designated commercial courts, and the Paris Court of Appeal alone hears appeals (French Commercial Code, Art. D. 442-2). A foreign supplier suing in France will therefore have to bring proceedings before one of those courts, for example the Lyon court for a company based in Haute-Savoie.
In international matters, the jurisdiction of the French courts is not automatic. Between parties established in the EU, the Brussels I bis Regulation applies, and the characterisation of the claim (contractual or tortious) determines the competent court absent a clause (Regulation (EU) No 1215/2012, Art. 7(1) and (2)). A valid choice-of-court clause prevails (Art. 25). The Cour de cassation has long held that a choice-of-court clause covering any dispute arising from the contract must be given effect, even if overriding mandatory provisions apply to the merits (Cass. 1re civ., 22 October 2008, No. 07-15.823). An arbitration clause has a comparable effect in favour of the arbitrator.
A framework agreement that designates a court or an arbitrator, and a governing law, for any dispute relating to the relationship, including its termination, considerably reduces the uncertainty. That is the first benefit of signing a framework agreement with a foreign supplier.
8. An exit method that holds in every case
Since the outcome of the characterisation debate is uncertain, the method has to be indifferent to it. It starts with an assessment of exposure (length of the relationship, the buyer’s share of the supplier’s turnover, specific investments, exclusivity), continues with written notice whose length and performance are proportionate to that exposure and, if the termination is based on failures by the supplier, requires those failures to have been documented as they occurred rather than reconstructed at the time of termination.
The difficulty lies in calibration, and it is real. There is no scale: notice that is too short exposes the buyer to an award counted in months of margin, while notice that is too long or badly performed wipes out the savings that justified the change of supplier. Between the two, the length, the pace of any phase-down, the wording of the letter and its timing are chosen in the light of the history of the relationship, the law the supplier will be able to invoke and the court it will be able to seize.
In the Braga example, the decision to exit in three months turned an 18% saving into a dispute whose stakes probably exceed a year of margin. A prepared exit would have kept a substantial part of the expected saving, while making the subcontractor’s claim very difficult whatever the applicable law.
How the firm can help
The firm handles termination of commercial relationships and international trade law matters, both advisory and contentious. You can tell us about your situation before sending a termination letter.
Frequently asked questions
Does an annual tender that my long-standing supplier loses amount to abrupt termination?
It may amount to termination, and the question then becomes one of notice. Putting a supplier out to tender is not wrongful in itself, but a supplier eliminated at the end of a tender must receive notice that reflects the length of the relationship, which in principle runs from the date on which it was told, unambiguously, that the relationship might not continue. Since the law of 18 August 2026, repeated tenders whose frequency or terms create a significant imbalance are also a practice covered by Article L. 442-1, I, 6° of the French Commercial Code.
Does the notice period stated in the framework agreement protect me?
Not necessarily. Contractual notice does not bind a court hearing a claim under Article L. 442-1, II, which assesses what length is sufficient in the light of the circumstances of the relationship. Three months’ notice stipulated in a contract signed ten years ago may be found insufficient for a relationship that has since become substantial. Only eighteen months’ notice protects the terminating party from a challenge to its length (French Commercial Code, Art. L. 442-1, II, para. 3). The clause is still useful: it forms the starting point of the discussion and, if French law does not apply, it governs the exit.
Can I terminate without notice if the supplier is put on a sanctions list?
Usually yes, and sometimes you must. When the supplier or its managers are subject to an asset freeze, continuing the relationship may be an offence, and performing the contract becomes legally impossible. Termination without notice is then based on force majeure or on impossibility of performance, which Article L. 442-1, II expressly preserves. It is still prudent to provide for it in the framework agreement, and to check exactly how far the measure goes: not all sanctions prohibit all transactions.
Is my foreign supplier economically dependent on me within the meaning of abuse of economic dependence?
That is a different question from abrupt termination. Article L. 420-2, paragraph 2 of the French Commercial Code prohibits the abusive exploitation of a partner’s economic dependence, but only where it is liable to affect the functioning or structure of competition. That condition, and the requirement that the victim had no alternative solution, make the provision hard to apply, and findings of infringement remain rare. Abrupt termination remains the main battleground for these disputes.
In the same series, for the overall map of risks: International supply chains: the legal risks for a company that buys abroad; on supplier default: Foreign supplier stops delivering: avoidance, substitute purchase and damages; on compliance: Forced labour and deforestation: what EU regulations require of importing companies.