Abrupt termination of a commercial relationship: change of co-contractor is not considered as a substantial modification

14/06/2021

The rupture is only attributable to the author of a modification of the business relationship, refused by the other party, if this modification is substantial“. This is the principle that the Court of Cassation recalls in its decision of March 31, 2021. A sudden termination requires three cumulative conditions: a substantial modification of the relationship, resulting from a unilateral decision of the partner, not justified by objective circumstances.

What is a substantial modification of the relationship?

It is assessed by the judges of the court[1] of first instance and is most often unfavourable to the partner[2]. It can be, for example, a modification on the volume of business[3], on an exclusivity of supply[4] or on the financial conditions. [5]

The Commercial Chamber has considered that buyers imposing on their seller a regrouping of their purchases within a dedicated company does not constitute a substantial modification of the relationship and is therefore not worth a brutal rupture.

Facts and procedure

Verallia, a company specialized in the manufacture of glass bottles, had entrusted the distribution of its products to three agricultural cooperatives.

In 2012, these cooperatives decided to combine their purchases within the company Vitisphère Alsace. Verallia made known its opposition to the project, which became a reality in 2013. It therefore sued the 3 cooperatives for payment of damages for brutal breach of an established commercial relationship on the basis of Article L442-1 of the French Commercial Code.

In a judgment dated January 31, 2019, the Paris Court of Appeal ruled that the cooperatives had imposed on the manufacturer a substantial change in the commercial relationship, by inviting the latter to invoice the company created to group purchases and by ceasing their own supplies from it. This change of co-contractor constitutes, according to the judges, a brutal rupture of the relationship.

Solution of the Court of Cassation

The Court of Cassation censured the Court of Appeal and stated that “the mere change in the identity of the co-contractor is not sufficient to characterize the substantial nature of the modification“. Moreover, it was argued that the contractual relationship had never been concluded intuitu personae and had to continue under the same commercial conditions (orders, rates…).

By Corinne Khayat and Raphaël Dulion

Source : Cass. com. 31-3-2021 n° 19-14.547 F-D, Sté Comptoir agricole d’achat et de vente c/ Sté Verallia France

Link: https://www.efl.fr/actualite/modification-relation-etablie-vaut-rupture-substantielle-illustration_ff1fcb8f2-5d19-4b67-b3f6 90351a3ef665#:~:text=Commercial%20practices%20abusive-,The%20modification%20of%20a%C3%A9established%20relationship%20is%20only%20break%20up%20that%20substantial%20modification%20of%20the%20relationship.

[1] Cass. com., March 31, 2015, n° 14-11.329
[2] Cass. com., Nov. 20, 2019, n° 18-11.966, F-D
[3] See e.g.: Cass. com. 23 Jan. 2007, n° 04-16.779
[4] See, e.g., Cass. com. 3 Feb. 2015, no. 13-24.592
[5] See e.g. Cass. com. 20 May 2014, no. 13-16.398

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