United States: Trade Relationships After The "Sapin II Law"

One year after the "Macron Law", the Law for transparency, prevention of corruption and modernisation of the economy adopted on 8 November 2016 and currently under scrutiny by the Constitutional Council following referral on 15 November 2016, once again amends the rules applicable to trade relationships as regards payment terms and commercial negociations.

Commercial negotiations: what changes

  • Duration of the single written agreement: it may be multiannual, but the price will be revisable

The new law preserves the obligation for suppliers and distributors under Article L. 441-7 of the Commercial Code to sign a single agreement or a framework agreement setting out the obligations the parties undertake to perform at the end of the negotiation (particular terms and conditions of sale, commercial cooperation obligations, and other obligations facilitating the commercial relationship). A similar framework, although less restrictive, is set out for the relationship between supplier and wholesaler (Article L. 441-7-1 of the Commercial Code).

The single agreement or framework agreement had to be concluded every year before the 1st of March or within two months of the beginning of the marketing period for goods and services subject to a specific sales cycle.

This will no longer necessarily be the case after the entry into force of the Sapin II Law, which grants suppliers, distributors and wholesalers the possibility to conclude multiannual agreements and framework agreements. As amended by the Sapin II Law, Articles L. 441-7 and L. 441-7-1 of the Commercial Code now provide that: "the written agreement is concluded for a duration of one year, two years or three years, at latest on 1 March of the year during which it takes effect or within the two months following the beginning of the marketing period of products or services subject to a specific sales cycle. When it is concluded for a duration of two or three years, it specifies the terms under which the agreed price is revised. Such  erms may take into consideration one or several public indexes reflecting the evolution of the price of production factors".

The new provisions are applicable to agreements concluded as of 1st of January 2017, and therefore apply to the annual negotiation cycle beginning on 1st of December 2016.

The opportunity to conclude single agreements or framework agreements of a duration reaching up to three years will have the benefit of no longer constraining companies who choose this option to undergo annual negotiations, which will facilitate the setting up of stable business and investment plans within suitable timeframes adapted to their activities and which will reduce negotiation costs. The risk deriving from the possible fluctuation of production costs, which weighs both on the supplier and on the distributor/wholesaler, will have to be managed by fixing the appropriate price revision terms to react to an increase or decrease of production costs during the contract.

For contracts of a duration superior to three months covering the sale of certain goods, the obligation to renegotiate the price set out under Article L. 441-8 of the Commercial Code in the event of a fluctuation in the price of agricultural and foodstuff raw materials will apply, as the case may be, in conjunction with the price revision clause included in the single agreement. The law introduces several other measures in the food processing sector concerning prices of agricultural products.

  • New penalties for restrictive practices

The very strict framework for sanctions in case of non- compliance with the rules and formalism governing commercial negotiations remains unchanged: the violation of Articles L. 441-7, L. 441-7-1 and L. 441-8 of the Commercial Code is punishable by administrative fines reaching up to 375,000 euros for legal persons, and double this amount in case of repeated violation.

However, the Sapin II Law modifies the long list of restrictive practices prohibited under Article L. 442-6 of the Commercial Code by introducing two new forbidden practices:

  • Subjecting or seeking to subject a trading partner to late delivery penalties in case of force majeure;
  • Imposing a price revision clause as provided for under Articles L. 441-7 and L. 441-7-1 of the Commercial Code or a price renegotiation clause under Article L. 441-8 of the same code by reference to one or several public indexes with no direct link to the contractual goods or services.

The practices prohibited under Article L. 442-6, I, 1° of the Commercial Code, consisting in obtaining from a trading partner any advantage unrelated to a commercial service effectively rendered or which is clearly disproportionate to the value of the service rendered, are extended to the participation in the financing of promotional activities and the remuneration of services rendered by an international central facility grouping distributors.

The civil fine incurred in case of a violation of Article L. 442-6 of the Commercial Code is increased from 2 to 5 million euros and this fine may also be increased to the triple of the sums unduly paid or to 5 % of turnover generated in France.

Adjustment Of Payment Terms

  • Goods delivered outside the European Union

The Sapin II Law introduces a new derogation from the 60-day cap from the date of the invoice, provided for under Article L. 441-6, I, ninth indent of the Commercial Code for payment terms agreed between professionals. The new maximum term comes in addition to the optional cap of 45 days end of month from the date of issue of the invoice for the term which can be agreed by the parties on condition that it is not grossly unfair to the creditor, and in addition to the maximum 45 days from the date of issue of the invoice provided for summary invoices, i.e. for invoices issued monthly for several separate deliveries of goods or services provided to the same person during a calendar month.

For the payment of VAT-free purchases of goods that are to be delivered outside the European Union, without being processed or transformed, the maximum term that can be agreed between professionals is now set at 90 days from the date of issue of the invoice. Late payment penalties apply if

the goods are not actually exported in the end.

The new measure aims to support small and medium firms exporting outside the EU and therefore the 90- day cap does not apply to purchases made by "large companies", a concept which is not clearly defined.

  • Reinforcement of penalties

The Sapin II Law significantly reinforces the sanctions incurred for violations of the rules applicable to payment terms: the maximum administrative fine provided for under Article L. 441-6, VI of the Commercial Code is increased from 375,000 euros to 2 million euros for legal persons.

Sanction decisions adopted by the DGCCRF (the governmental agency for competition policy, consumer affairs and fraud control) for violations of the rules applicable to payment terms will systematically be published (Article L. 465-2, V of the Commercial Code).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions