Sales agents, transport brokers, wine brokers... A look at other intermediaries

After laying the basics of the brokerage contract in our first article, and then detailed the specific rules for well-known intermediaries in the property, insurance and banking sectors in the second, it's time to broaden our horizons. The world of intermediation is vast and populated by a variety of figures, each responding to specific economic needs and often operating under a particular status.

From the commercial agent, an essential cog in the wheel of many a sales force, to the more discreet but indispensable brokers in the transport or wine trade, not forgetting the central referencing agencies in the retail sector or marriage brokers, the role of intermediary takes on many faces. Some of these intermediaries benefit from a protective legal status, others are subject to strict sector-specific regulations, while still others are governed mainly by ordinary brokerage law.

This article provides an overview of these different players: who are they? What is their mission? What specific rules govern their activity? Understanding this diversity is useful, whether you are a business looking to develop your network, an independent professional, or simply curious about the mechanisms that make our commercial exchanges more fluid.

The commercial agent: a permanent and protected agent

The commercial agent is a central figure in distribution law. Although they act as intermediaries, their status, defined in articles L. 134-1 et seq. of the French Commercial Code, has a number of important features that distinguish them from 'classic' brokers.

Definition and status: an independent agent

By law, a commercial agent is a representative which, as a independent professionis charged as follows permanent negotiate and, if necessary, conclude contracts (sale, purchase, hire, provision of services) in the name and on behalf of its principals (producers, industrialists, traders, etc.).

Several key elements emerge from this definition:

• Agent Like brokers, agents act on behalf of others. The law classifies them as mandataries, even though they often merely negotiate without concluding the contracts themselves. This confirms that the concept of mandate can extend to simple active mediation.
• Independent He is not an employee of his principal. They are free to organise their own activities. This is what distinguishes them from VRP (Voyageur Représentant Placier), who, although they enjoy a degree of autonomy, are bound by an employment contract.
• Permanent : The broker's role is a long-term one, unlike that of a traditional broker, who may be involved on a one-off basis for an isolated case.
• Negotiation (and possible conclusion) Its main task is to negotiate contracts. The power to enter into contracts is optional. Case law has sometimes interpreted "negotiation" restrictively, requiring the agent to have the power to change prices or conditions. However, the agent's essential function is to prospect, convince and develop customer loyalty on behalf of his principal.

Commercial agents must be registered in a special register held at the commercial court registry.

Reciprocal obligations and non-competition

Like any lasting contractual relationship, that between the agent and his principal is based on an obligation to loyalty and a reciprocal duty toinformation (article L. 134-4 of the French Commercial Code). The principal must provide the agent with the means to carry out his assignment (documentation, product information, rates, etc.). The agent, for his part, must act as a "good professional", follow the principal's (reasonable) instructions and keep the principal informed of his activities.

An obligation to non-competition The agent is naturally subject to a non-competition clause during the term of the contract: he may not represent a directly competing business without the agreement of his principal (article L. 134-3). After the end of the contract, a non-competition clause may be included, but it must be in writing, limited in time (two years maximum), geographically and in terms of the types of goods or services concerned (article L. 134-14).

Termination of the contract and entitlement to compensation

If the contract is open-ended, either party may terminate it by giving notice, the length of which varies according to the length of the relationship (article L. 134-11).

The major specificity of the status lies in the right to compensation in the event of termination of the contract (article L. 134-12). This indemnity is intended to compensate the agent for the loss of future income linked to the customer base he has created or developed for the principal. It is payable regardless of the reason for termination of the contract (end of term, termination, etc.), except in three cases:

1. Serious misconduct on the part of the agent.
2. Termination initiated by the agent (unless justified by circumstances attributable to the principal or by the age, infirmity or illness of the agent).
3. Transfer of the contract by the agent to a third party with the consent of the principal.

This important right to compensation, often valued by the courts at around two years' gross commission (according to custom), is a matter of public policy: it cannot be waived in advance. The agent must claim this compensation within one year of the termination of the contract.

Transport brokers

Freight transport is a complex sector involving a variety of players, including specialist brokers.

• Land and water transport brokers Historically, they enjoyed a monopoly (former article L. 131-3 of the French Commercial Code). This concept has now been largely superseded by the liberalisation of transport. Ministerial officers such as "ship brokers, interpreters and conductors" have disappeared.
• River freight brokers : They retain a regulated status. Their role is to put order givers and inland waterway carriers in touch with each other. They must be entered in a specific register. Their role can sometimes go beyond simply putting people in touch with each other (assistance with formalities, representation).
• Sea and road freight brokers Unlike inland waterway transport, sea freight brokerage (bringing together charterer and charterer for the sale or charter of ships) and road freight brokerage (bringing together shipper and road haulier) are no longer specifically regulated and come under common brokerage law.

Wine brokers

In the wine sector, specialised intermediaries, the wine brokers (or "country brokers"), play a traditional role in bringing producers and merchants together.

Their profession is governed by a 1949 law and its implementing regulations. In particular, they must obtain a professional licence after proving their skills (training course, examination) and respect certain incompatibilities to avoid conflicts of interest. They are also prohibited from buying or selling wine on their own account, with certain exceptions (family needs, sale of their own harvest, or specific characteristics of the Cognac region). Their remuneration ("brokerage") is generally due as soon as the parties agree, but local custom (such as sending a "letter of confirmation" in the Bordeaux region) may specify the exact moment when the sale is made.

There is also a historic company of experts in Paris: the "courtiers-jurés-experts piqueurs de vins", whose mission is to assess the quality of wines, particularly in the context of expert appraisals.

Overview of other specific brokers

The brokerage function can be found, with adaptations, in many other fields:

• Sworn commodities broker Auctioneers: Although their monopoly over certain public auctions was largely reduced by the 2011 law, these professionals (around 200 in France, highly specialised by type of merchandise) still play an expert role and can carry out certain judicial sales or estimates. Access to the profession is regulated (registration on the Court of Appeal list, examination, oath).
• Matrimonial broker Dating services: Their activity (promoting meetings with a view to marriage or a stable union) is governed by the law of 23 June 1989 to protect consumers. A written contract is required, setting out the price, services and the possibility of cancelling for legitimate reasons. There is a 7-day cooling-off period after signature. The term of the contract is limited to a maximum of one year, with no tacit renewal. The broker has a best endeavours obligation and must verify a minimum amount of information about the persons presented.
• Other brief mentions :
  • Medicines Brokerage (trading without physical handling) is authorised, but must be declared to the French Medicines Agency (ANSM). The broker must ensure that the medicines have marketing authorisation.
  • Travel The travel agent sometimes acts as a broker (simple reservation), but more often organises packages himself, thereby incurring broader liability. The sector is highly regulated (registration, financial guarantee, strict liability for packages).
  • Work (Placement) Private employment agencies (recruitment agencies, headhunters) have been authorised since 2005. Their activity of putting job offers and applications in contact with each other is considered to be brokerage. They are subject to strict rules (non-discrimination, information to candidates, confidentiality, prohibition on charging jobseekers except in exceptional cases).
  • Sport (Sports agent) The activity (putting clubs and athletes/coaches in contact with each other) requires a licence issued by the relevant federation. The contract must be in writing and remuneration is subject to a ceiling (maximum 10% for the contract signed). Lawyers can also carry out this activity.

Central referencing agencies: brokers for mass retailers

In the mass retail sector, central referencing bodies (or central negotiation bodies) act on behalf of several chains or independent shops to negotiate more advantageous purchasing conditions (prices, discounts, payment terms, etc.) with suppliers than they would obtain on their own.

The majority of jurisprudence qualifies the contract binding the central to its affiliates as a brokerage contract. In principle, therefore, the head office is bound by the obligations of a broker: to act diligently in the interests of its principals (the distributors), to report to them on the negotiations and to pass on to them the benefits obtained (discounts, back margins, etc.).

However, the considerable negotiating power of these power plants has led the legislator to regulate their practices very strictly, not only through contract law, but above all through the competition law (articles L. 441-3 and L. 442-1 of the French Commercial Code in particular):

• Formalities of the negotiation An annual (or multi-year) written agreement is mandatory between supplier and distributor (negotiated via the central office), detailing all the conditions of sale and reciprocal obligations (pricing conditions, commercial cooperation services, other obligations, etc.).
• Prohibition of abusive practices Article L. 442-1 makes it a criminal offence to obtain or attempt to obtain from a partner an advantage that is unrequited or manifestly disproportionate, to create a significant imbalance in the rights and obligations of the parties, or to abruptly break off an established commercial relationship. The Minister for the Economy and the Public Prosecutor's Office can take legal action to put a stop to these practices and seek substantial civil penalties.

The central listing agency is therefore a broker with a hybrid status, subject both to the rules of the intermediary mandate and to a specific framework derived from economic law to prevent abuses linked to its dominant position.

The intermediation landscape is therefore rich and varied. While the basic role is to put people in touch with each other, the statutes, obligations and protections vary considerably from one sector to another. Whether you're a sales agent entitled to severance pay at the end of your contract, a wine broker subject to strict incompatibilities, or a central listing agency subject to competition law, each type of intermediary has its own specific characteristics.

Whether you are a professional using the services of one of these intermediaries, or the intermediary himself, it is essential to be familiar with the legal framework applicable to your situation, especially if these relationships take a long time. international dimension. To secure your contractual relations, negotiate your rights or defend you in the event of a dispute involving a commercial agent, a distribution centre or any other specialist broker, our firm is at your disposal, particularly for any of the following services assistance in banking and financial law.

Sources

• French Commercial Code: articles L. 134-1 to L. 134-17 (Commercial agents), L. 441-3 (Written supplier/distributor agreement), L. 442-1 (Restrictive practices).
• Law no. 49-1652 of 31 December 1949 regulating the profession of wine and spirits broker.
• Code du sport: articles L. 222-7 et seq (Sports agents).
• Law no. 89-421 of 23 June 1989 on consumer information and protection (article 6 on marriage brokerage).
• Public Health Code (articles L. 5124-19 et seq. for drug brokering).
• French Labour Code (articles L. 5321-1 et seq. on job placement).
• Tourism Code (for travel agents).