A termination without notice decided by a foreign partner is handled in three questions, in this order: which court, which law, what loss. The court is fixed by the contract clause or, within the EU, by the place of delivery; the law decides whether article L. 442-1, II of the French Commercial Code can be invoked; the loss is measured by the gross margin over the missing notice period.
A Haute-Savoie equipment maker has supplied a Bavarian machine builder for eleven years, a customer representing 38% of its turnover. No framework agreement, annual orders, German general purchasing conditions accepted without a second look. On 12 June, a two-line email announces that orders will cease on 30 September, a Czech supplier having been selected. Three and a half months’ notice for eleven years of business. The French company would like to invoke the French rule on abrupt termination of established commercial relationships, knowing that the Paris courts often award one month per year of relationship. But its partner is German, its general conditions designate Munich, and German law knows no such rule. This page explains what the company can do, and what it cannot.
First the court: the clause, then the place of delivery
The question of the court precedes all others, because a German judge will not spontaneously apply a French rule of economic public policy, and because it is before him that the victim will have to plead if it accepted his jurisdiction. Within the European Union, the Brussels I bis Regulation first gives effect to a validly concluded jurisdiction clause (Regulation (EU) No 1215/2012, art. 25). A clause contained in general purchasing conditions accepted with each order, by express reference, binds the French supplier; a clause that appears only on invoices, without reference in the orders, does not meet the requirements of article 25, as the Court of Justice has held (CJEU, 8 March 2018, Saey Home & Garden, C-64/17). The first task is therefore to trace the path by which the other side’s general conditions entered the relationship: orders, acknowledgements, supplier portal, an old framework agreement never terminated.
Failing a clause, an action for abrupt termination against a European partner is a matter relating to a contract where a tacit contractual relationship existed between the parties, established by a body of consistent evidence: length of the relationship, good faith, regularity of transactions, agreements on prices, correspondence (CJEU, 14 July 2016, Granarolo, C-196/15). The Cour de cassation applies that solution and draws the consequence: a relationship of several years made up of successive sales subject to general conditions is contractual in nature, and the competent court is that of the place of delivery fixed by those conditions (Cass. com., 20 September 2017, no. 16-14.812). The place of delivery is the Incoterm: a supplier who delivers EXW or FCA from his Annecy plant delivers in France and may sue in Annecy; one who delivers DAP in Munich has, without knowing it, chosen the German court. Where the relationship is a provision of services or a distribution, the competent court is that of the place of the main provision of services (Regulation (EU) No 1215/2012, art. 7(1)(b)), a solution the Court of Justice extended to the concession contract (CJEU, 19 December 2013, Corman-Collins, C-9/12).
Outside the Union and outside any convention, the reasoning changes. The Cour de cassation treats the action as tortious for the purposes of French rules of international jurisdiction, which opens the court of the place where the damage is suffered, that is, for a French company, France (Cass. 1re civ., 12 March 2025, no. 23-22.051). A supplier abruptly dropped by an American or Turkish customer may therefore sue in France, subject to the reservation, examined on our page on the foreign customer who does not pay, that the judgment obtained can be enforced where the partner has assets.
Then the law: does article L. 442-1, II apply [[Q]]
This is the most debated question in international termination disputes, and it is not settled. Article L. 442-1, II of the French Commercial Code makes liable whoever abruptly terminates, even partially, an established commercial relationship without written notice taking account of the length of the relationship, the terminating party being safe if it gave eighteen months’ notice. The international difficulty lies elsewhere: when the relationship is governed by a foreign law, can that provision be invoked.
Two routes. The first is characterisation. If the action is contractual, the applicable law is that of the contract: the law chosen by the parties or, failing that, that of the habitual residence of the seller for a sale, of the service provider for a service, of the distributor for a distribution (Regulation (EC) No 593/2008, Rome I, art. 3 and 4). For the Savoyard supplier, a seller, French law applies to its sales absent a choice, and article L. 442-1, II with it; but if the German general purchasing conditions designate German law, the law of the contract is German. If the action is tortious, the applicable law is that of the country where the damage occurs (Regulation (EC) No 864/2007, Rome II, art. 4), most often the victim’s. The first civil chamber referred to the Court of Justice, on 2 April 2025, the question whether an action for abrupt termination falls within contractual or tortious matters for the purposes of the Rome Convention and the Rome II Regulation (Cass. 1re civ., 2 April 2025, no. 23-11.456). At the date of this page, the Court of Justice has not answered. Until it does, a supplier bound by a foreign choice-of-law clause pleads on uncertain ground.
The second route is that of overriding mandatory provisions. The Rome I Regulation allows the court to apply the overriding mandatory provisions of the forum, those provisions the respect for which is regarded as crucial by a State for safeguarding its public interests to such an extent that they apply whatever the law of the contract (Regulation (EC) No 593/2008, art. 9). The Paris Court of Appeal, sole appellate court in the field, has several times recognised that character in the abrupt termination rule, but the Cour de cassation has never enshrined it in general terms, and a German judge is not bound by it. It must be said to the client without evasion: before a French court, the argument has good prospects; before the Munich court, it has almost none, and the company will have to plead the German law on termination of long-term business relationships, which knows a reasonable notice period but assesses it more sparingly.
What remains when the French rule does not apply
The victim is not without remedies for all that. Three grounds remain. The contract itself, first: a framework agreement, however old, an exclusivity agreement, a volume commitment, a notice clause, bind their author whatever the law, and their breach is pleaded under the law of the contract. Most European legal systems know a requirement of reasonable notice for terminating open-ended relationships, and the question then becomes one of length, not of principle.
Distribution law, next. Where the relationship is a commercial agency, the agent is entitled, throughout the Union, to an indemnity or compensation on termination under Directive 86/653/EEC, and the French regime of article L. 134-12 of the Commercial Code is among the most favourable; our page on the international commercial agent deals with it. Where the relationship is a concession or a distribution, some national laws, Belgium first among them, organise their own protection of the ousted distributor.
Competition law, finally. A dominant partner who terminates in order to punish a supplier or to oust it may fall under abuse of economic dependence (Commercial Code, art. L. 420-2) or abuse of a dominant position, whose application does not depend on the law of the contract but on the effect on the French market. That ground is more demanding in terms of evidence.
The loss: gross margin over the missing notice
Where the French rule applies, the loss is calculated according to the method fixed by the Cour de cassation: the expected gross margin, that is the difference between the expected turnover excluding tax and the variable costs excluding tax not incurred, over the period of notice that was missing (Cass. com., 28 June 2023, no. 21-16.940). For the Savoyard supplier, eleven years of relationship and 38% dependence frequently lead the specialised courts to a notice period of twelve to fifteen months; three and a half were given; eight to twelve months of gross margin are therefore missing on an average monthly turnover of 290,000 euros. At a 28% margin on variable costs, the loss lies between 650,000 and 975,000 euros. That figure, documented by the chartered accountant, opens the negotiation.
To count as notice, the notice must be in writing and dated: a letter announcing the end of the relationship without fixing its date sets no notice period running (Cass. com., 26 February 2025, no. 23-50.012). The Bavarian email of 12 June fixed 30 September; it did set a notice period running, too short a one. And the notice must be effective, on the previous terms: a partner who halves orders during the notice period has given no notice.
Act quickly, and in the right order
The time for bringing proceedings is five years from termination before the French courts (Commercial Code, art. L. 110-4), and shorter in many foreign systems, three years in Germany. But the real deadline is that of the evidence: the order history, the exchanges on joint projects, the investments made for the partner fade with time and with the departure of people. The firm has that file assembled in the weeks following the termination, before any formal demand.
The action itself follows an order. A reasoned and quantified formal demand, which cites the ground chosen, contractual or tortious, and requests an extension of the notice period or compensation, frequently obtains a settlement, because the foreign partner measures, once advised, the risk of a judgment in Paris. Failing that, proceedings before the competent specialised court (Commercial Code, art. L. 442-4, III, D. 442-2 and D. 442-3) where the French court has jurisdiction, with, in cases of acute dependence, an application for interim measures to obtain temporary continuation of deliveries. Where the foreign court alone has jurisdiction, the firm works with local counsel and adapts the claim to the law of the forum, without trying to transplant a rule that has no currency there.
A foreign partner who wishes to part with a French supplier has, symmetrically, every interest in being advised: written, dated, effective notice of a length proportionate to the relationship spares it a lawsuit whose outcome, before a French court, would go against it. The firm acts in both directions.
A foreign customer or supplier ends a long relationship without notice? Court and law are determined in the first weeks, and the evidence of the relationship does not improve with time. A first conversation settles the ground, the court and the amount at stake.
Frequently asked questions
Can I sue a European partner who terminates abruptly in France [[Q]]
Yes if no clause designates another court and the place of delivery or of the service is in France: the action is contractual where a tacit contractual relationship existed (CJEU, 14 July 2016, Granarolo, C-196/15; Cass. com., 20 September 2017, no. 16-14.812). The Incoterm often fixes that place.
Does article L. 442-1, II apply if the contract is governed by a foreign law [[Q]]
The question is not settled. It depends on the contractual or tortious characterisation of the action, referred to the Court of Justice by the Cour de cassation (Cass. 1re civ., 2 April 2025, no. 23-11.456), and on recognition of the rule as an overriding mandatory provision (Rome I Regulation, art. 9), accepted by the Paris Court of Appeal but not enshrined by the Cour de cassation.
Will a German or Italian judge apply the French abrupt termination rule [[Q]]
In practice almost never. Before a foreign court, the victim pleads the law of the forum, which often knows a reasonable notice requirement but assesses it more strictly, and the terms of the contract.
How is the compensation calculated [[Q]]
By the expected gross margin over the missing notice period, that is the expected turnover excluding tax less the variable costs not incurred (Cass. com., 28 June 2023, no. 21-16.940), certified by a chartered accountant.
Does an email announcing the end of orders set the notice period running [[Q]]
Only if it states the date on which the relationship will end (Cass. com., 26 February 2025, no. 23-50.012). A letter without a date sets no notice running, and a notice period during which orders collapse is not a notice period.
What if the partner is established outside the EU [[Q]]
The action is tortious for the purposes of French jurisdiction rules, which opens the court of the place of damage in France (Cass. 1re civ., 12 March 2025, no. 23-22.051), provided the judgment can be enforced where the partner has assets; an arbitration clause changes that calculation.
Written by Hervé Guyader, avocat at the Paris Bar, doctor of law. This content is general information and does not replace legal advice.