Stock protections or price protections are legal if negotiated… – L442-6

French electronic product and home appliance products, Darty, was sued by French Ministry of Economy, who claimed Darty’s contractual stock protection provision to be illicit, because of the significant imbalance caused by such clause  pursuant to Article L. 442-6, I, 2 ° of the Commercial Code.

The Court of Cassation confirms this decision on the following grounds. The distributor is an unavoidable intermediary for suppliers, given its position as a leader in the distribution of household appliances, image and sound products and PCs/laptops, ranking first in the market in terms of turnover. It then holds an indisputable bargaining power. All specific limitations of this clause arising from the suppliers’ contractual documents had been turned down or deleted in favor of Darty’s general and imprecise provision. There was then no effective opportunity to negotiate the clause. 

The absence of negotiation then renders illegal the clause, but the stock or price protection  clause is not illegal per se or in itself. Many suppliers that spontaneously stipulates such kind of clauses, will happily read this decision.

Court of Cassation, Commercial Chamber, April 26, 2017, N ° of appeals: 15-27865

Frédéric Fournier
Partner