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B2B commercial relations: protecting yourself against significant imbalance and sudden termination

By Yasmine EDDAM15 April 2025

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The life of a company depends to a large extent on the quality and stability of its commercial relations, a stability that is the fruit of a long and successful partnership. skilled commercial negotiation. Whether they are essential suppliers, major customers or strategic partners, these links are vital to your business. But what do you do when your contract with a partner seems deeply unfair? Or when that partner decides, out of the blue, to end a long-standing collaboration, leaving you in a difficult situation? These challenges highlight the importance of mastering the foundations of fair competition to protect your business.

French law regulates these situations to prevent abuse and protect companies of all sizes. Two legal mechanisms are particularly important to be aware of: the prohibition on creating a significant imbalance in the rights and obligations of the parties, and the sanction of the sudden severance of established commercial relations. Understanding these concepts can help you anticipate risks, negotiate more balanced agreements and defend your interests in the event of a dispute.

Significant imbalance: when a contract leans too far to one side

The principle of contractual freedom allows companies to negotiate the terms of their agreements. However, there is a limit to this freedom when one of the parties succeeds in submit or attempt to submit the other to obligations creating a significant imbalance in their respective rights and obligations. This prohibition, set out in article L.442-1, I, 2° of the French Commercial Code, is designed to penalise contracts where the balance of economic power has led to manifestly unfair clauses.

How do you identify a significant imbalance?

It is not a question of penalising any clause that is not perfectly symmetrical. The assessment is made on a case-by-case basis, examining the contract as a whole. The courts look for a lack of real consideration or manifest disproportionality between the obligations of each party. The key element is often the notion of submission Has a party been forced to accept unfavourable terms without being able to negotiate them?

Here are a few examples of situations or clauses that have been considered by the courts to create a significant imbalance:

From very different payment terms imposed by the buyer: he demands to be paid quickly for his services (e.g. commercial cooperation) but allows himself very long periods to pay for the supplier's goods.
Clauses allowing one party to unilaterally modify essential elements of the contract (price, quantities, deadlines) without any real consideration or possibility of refusal for the other party.
Le systematic and unjustified transfer of risk on a single part (for example, requiring the supplier to take back all unsold goods unconditionally, or to bear the cost of in-store shrinkage).
L'imposition by a powerful buyer of its General Purchasing Conditions (GPC) without agreeing to discuss the supplier's General Terms and Conditions of Sale (GTS), thereby rendering the negotiation devoid of substance.
The requirement for online platforms very broad "price parity" clauses preventing a hotel or retailer from offering better deals on its own sales channels, without proportionate justification.
From conditions of termination or non-renewal much more restrictive for one party than for the other.

The analysis is global: a potentially unbalanced clause could be offset by another advantage in the contract. But it is often the accumulation of unilateral clauses that characterises submission and imbalance.

What are the legal consequences?

When a court recognises a significant imbalance, the consequences can be far-reaching:

Civil liability : The perpetrator of the practice is liable and must compensate the other party for the damage caused (article L.442-1 of the French Commercial Code).
Nullity : The victim may request the nullity of the clause or clauses deemed to be unbalanced. If these clauses are decisive, the nullity may potentially affect the entire contract.
Restitution : The victim may demand restitution of any benefits unduly obtained by the other party as a result of the unbalanced clauses.
Civil fine : The Minister for the Economy (who can take legal action to defend economic public policy) can ask the judge to impose a civil fine on the perpetrator of the practice. The amount of this fine can be very high: up to €5 million, or 5% of sales excluding VAT generated in France, or even three times the amount of benefits unduly received (article L.442-4 of the French Commercial Code).

The real challenge for you is therefore to be vigilant when negotiating and executing your contracts, and not to accept conditions that would place you in a situation of dependence or manifest disadvantage without justifiable consideration.

Sudden termination: bringing an established commercial relationship to a smooth end

Losing an important customer or supplier can be a major blow. If this loss occurs suddenly and unpredictably, it can jeopardise the financial equilibrium or even the survival of the company. That's why the law punishes sudden severance of established commercial relations.

What is meant by an "established commercial relationship"?

This is not just any business relationship. To qualify as "established", the relationship must be of an ongoing nature. stability, regularity and intensity sufficient for the party suffering the breach to have reasonably anticipated that the commercial relationship would continue.

This goes beyond a single contract or one-off transactions.
A long term of collaboration is a strong indicator, but not the only one.
La regularity and significance of business flows (orders, sales) are also decisive.
A relationship can be considered to be established even in the absence of a specific agreement.absence of a written framework contractif the facts demonstrate continuity and predictability (for example, a succession of regular orders over several years).
Even a a succession of fixed-term contracts may, in certain circumstances, create an established commercial relationship if the parties had a legitimate expectation of renewal. Beware, however, that systematic recourse to calls for tender can make the relationship precarious, even if the same partner is often chosen.

Brutal" termination: insufficient or no written notice

What is sanctioned by Article L.442-1, II of the French Commercial Code is not the termination itself (freedom of contract generally includes the right not to continue a relationship), but the fact that it is a breach of contract. brutal. The brutality lies in thefailure to give written notice or insufficient notice with regard to the characteristics of the relationship.

The break can be :

Total : Complete cessation of commercial relations.
Partial : A very significant and sudden drop in the volume of business (orders, referencing) without any objective justification may be treated as a brutal partial termination if it is not preceded by sufficient notice.

How do you determine how much notice is enough?

This is the trickiest question, as the law does not set a precise duration (apart from a few exceptions). The courts assess the length of time required on a case-by-case basis, taking into account all circumstances of the relationship, including :

The total duration of the commercial relationship (this is often the most important criterion).
Le business volume achieved and share of sales the relationship represented for the victim of the break-up.
The existence of a possible economic dependence of the victim in relation to the perpetrator of the break-up.
The specific investments (equipment, personnel, etc.) made by the victim to meet the needs or requests of the person responsible for the break-up, and which have not yet been amortised.
Le time required for the victim to find alternative solutions (new customers, new suppliers, reorientation of the business, etc.).
The uses of the sector or any cross-industry agreements (although this is rarely the case in practice).

Please note: The notice period stipulated in a contract is not necessarily sufficient. If a contract provides for 3 months' notice, but the relationship has lasted 15 years and represents 80% of the victim's turnover, the courts may consider this notice to be insufficient and consider the termination to be brutal.

However, in order to give companies greater security, Article L.442-1, II introduces a sort of "safety zone if the person who terminates the contract gives written notice of at least 18 monthsIf the duration of the contract is insufficient, the company cannot be held liable.

Exceptions: when can you terminate without notice?

The law provides for two cases where a termination, even of an established relationship, may occur without notice:

In the event of non-performance by the other party of its obligations : It must be a sufficiently serious misconduct justifying immediate termination (for example, repeated and significant quality defects, persistent non-payment despite formal notices, etc.). Mere dissatisfaction or a minor breach is generally not enough.
In the event of force majeure : This is an external, unforeseeable and irresistible event that makes it impossible to continue the relationship (for example, destruction of production facilities by a natural disaster). Economic difficulties, even serious ones, are very rarely considered as force majeure.

Apart from these two situations, sufficient written notice is required.

Penalties: compensation for the damage caused by brutality

If the break-up is deemed to have been abrupt, the perpetrator incurs civil liability and must compensate the victim for the loss suffered as a result of the absence or inadequacy of the notice period.

The loss compensated generally corresponds to the gross margin (sales excluding VAT minus variable costs excluding VAT) that the victim could have achieved during the period of notice that should have been respected. The aim is not to compensate for the loss of the relationship itself, but rather for the damage caused by the suddenness of the termination.

Imagine losing your main customer overnight without warning: the compensation is intended to offset the loss of margin suffered during the time it would have taken you, with reasonable notice, to reorganise.

Other restrictive practices to watch out for

Significant imbalance and breach of contract are frequently the subject of litigation, but the French Commercial Code (principally article L.442-1) also punishes other restrictive practices in B2B relationships, particularly those relating to price fixing:

The fact ofobtaining or attempting to obtain an advantage for which there is no consideration or manifestly disproportionate (article L.442-1, I, 1°). This applies, for example, to "back margins" or financial contributions demanded without any real service in return.
The fact ofimpose non-compliant logistics penalties to the rules set out in Article L.441-17 (disproportionate to the loss, deducted automatically without any possibility of verification, etc.) (Article L.442-1, I, 3°), as is the case for pitfalls associated with resale at a loss and fixed pricesis a sanctioned practice.
The fact that a buyer have its supplier charge an unfairly low transfer price for agricultural or food products (article L.442-7).
The fact of failing to conduct annual commercial negotiations in good faith and having failed to conclude a contract before the deadline (provision resulting from the EGalim 3 law, article L.442-1, I, 5°).

These various prohibitions reflect the legislator's desire to make commercial relations more ethical and to protect companies against abusive practices by their partners.

An unbalanced contract or a poorly managed termination of a relationship can have significant financial and operational consequences. Whether you are suffering from a situation that seems abusive to you, or you are considering ending a long-standing business relationship, anticipation and legal advice are essential. Our firm can help you analyse the validity of your contracts, assess the risks involved in terminating a relationship, negotiate notice periods or compensation, and defend your rights in court. We offer you our legal expertise to advise and defend your interests in the face of restrictive practices in B2B relations, such as significant imbalance or sudden termination, ensuring the security of your commercial agreements. For a confidential assessment of your situation, contact our team.