The world of commerce is governed by numerous rules that regulate the various sales methods. Far from being arbitrary, these regulations aim to protect consumers and ensure fair competition between professionals. Sales that take place outside the normal framework of shops, as well as certain promotional periods such as sales, are particularly regulated by the legislator. Understanding these rules is essential for any retailer wishing to develop their business legally.
Sales outside shops: what precautions should be taken?
Sales outside traditional retail outlets are subject to a specific legal regime that regulates these commercial practices.
Sales on public property: authorisations and limits
Selling on the public domain is not something you can improvise. Article L. 442-11 of the French Commercial Code strictly prohibits offering products or services for sale using the public domain in an irregular manner. Any retailer wishing to operate on the public domain must obtain prior authorisation from the mayor of the municipality concerned.
Failure to comply with this obligation constitutes a fifth-class offence. Officials from the Directorate-General for Competition and Fraud Control (DGCCRF) have extensive powers to punish these offences, including the confiscation of the goods and property used to make the offer for sale.
Constant case law confirms this authorisation requirement, even for the sale of the traditional May 1st lily of the valley, which constitutes a mere tolerance on the part of the public authorities and not an acquired right (Civ. 2e, 25 May 2000).
Taking part in a trade fair: information obligations
In the past, trade fairs and exhibitions were areas requiring prefectoral authorisation, but this requirement was abolished by Order no. 2004-274 of 25 March 2004. Nevertheless, trade show organisers must make a prior declaration to the relevant administrative authority.
A crucial point to remember concerns the absence of a right of withdrawal for consumers who conclude a contract at a trade fair. Article L. 224-59 of the Consumer Code stipulates that the trader must inform the consumer of this absence of right of withdrawal. Failure to provide information on this point may render the trader liable and affect the validity of the contract concluded.
The Court of Justice of the European Union has had occasion to clarify the interpretation of these provisions in several recent judgments, including the judgment of 7 August 2018 (Case C-485/17) and that of 17 December 2019 (Case C-465/19).
Unpacking sales: a regulated practice
Article L. 310-2 of the French Commercial Code defines "vente au déballage" as "the sale or purchase of goods on premises or sites not intended for public sale or purchase, or from vehicles specially equipped for this purpose".
These sales are strictly limited in time: they may not exceed two months per calendar year in the same premises, location or district. This time limit was specified by the Sapin 2 Act of 9 December 2016.
Prior notification to the local mayor is compulsory. It must be submitted at least fifteen days before the planned date of the sale. Case law has specified the decisive criterion for an unpacking sale: a place not usually used for marketing. Thus, a hangar, a bar, the car park of a department store or even the central aisle of a shopping mall can be considered as places for unpacking sales (Crim. 10 March 2015, no. 14-83.350).
Since the law of 4 August 2008, non-professional private individuals have been able to take part in unpacking sales to sell personal and used items, but only up to a maximum of twice a year.
Violation of the rules governing unpacking sales is punishable by a fine of €15,000, which can be increased to €75,000 for legal entities.
Factory outlet sales: conditions and restrictions
Factory outlets are a special form of trade where the manufacturer sells its products directly, often at attractive prices. This practice is governed by specific rules.
Legal definition of a factory outlet
Under article L. 310-4 of the French Commercial Code, the term "vente en magasin ou en dépôt d'usine" is reserved for producers who sell their goods directly. The purpose of this restriction is to protect consumers against misleading practices by certain retailers who might misuse this designation to suggest lower prices.
Improper use of this name is punishable by a fine of 15,000 euros. In addition, the Consumer Code provides for an administrative fine of up to 75,000 euros for legal entities in the event of unlawful advertising relating to this practice.
What goods can be sold there?
The goods that can be sold in a factory outlet are strictly defined by law. Three cumulative conditions must be met:
- These must be goods "not sold through distribution channels or being returned".
- These are "products from the previous marketing season".
- Products must justify "sale at a reduced price".
According to case law, these three conditions are cumulative, which considerably limits the type of products that can be sold under this name.
Consumer information on the origin of products
Traders operating a factory outlet are obliged to provide consumers with clear information about the origin and nature of the products sold. This obligation stems from the general principle of transparency that underpins consumer law.
Case law has developed a strict interpretation of these conditions, considering in particular that consumer information must be complete and unequivocal. Any ambiguity as to the origin of the products or their discontinued nature can be qualified as a misleading commercial practice.
Sales: a highly regulated sales period
Sales are a special time of year for retailers, allowing them to sell off their unsold stock while offering consumers bargain prices.
Definition of sales and distinction from promotions
Article L. 310-3 of the French Commercial Code defines sales as "sales which are accompanied or preceded by advertising and are announced as being aimed, through a reduction in price, at the accelerated clearance of goods in stock".
There are therefore four criteria that characterise sales:
- Advertising the sale
- A price reduction
- Products in stock
- Periods defined by law
The Court of Cassation has ruled that the essential criterion for a sale is the clearance of a batch of pre-existing, non-renewable goods (Crim. 19 Feb. 2003, no. 02-80.085).
It is important to distinguish sales from simple promotions. The latter can be organised freely throughout the year, but cannot be described as "sales". The law no. 2020-105 of 10 February 2020 on the fight against waste and the circular economy reinforced this distinction by punishing commercial practices that give the impression, through nationally coordinated promotional operations, that the consumer is benefiting from a price reduction comparable to that of sales outside the legal periods.
Legal sales periods
Sales periods are strictly regulated by law. Currently, article L. 310-3 of the French Commercial Code provides for two periods per year, each lasting a minimum of three weeks and a maximum of six weeks.
The precise dates are set by ministerial decree, with the possibility of different dates in certain departments to take account of strong seasonal sales or commercial operations in border regions.
The PACTE Act of 22 May 2019 amended the scheme by providing for shorter but potentially more effective periods. The order of 27 May 2019 set the length of each sales period at four weeks.
Goods concerned and specific replenishment ban
A crucial point in the sales regulations concerns the prohibition on specific restocking. Products advertised as being on sale must have been offered for sale and paid for for at least one month before the start of the sale period.
Case law has clarified this concept: there is a sale when there is accelerated clearance of a predetermined, non-renewable stock (Com. 28 Jan. 2004, no. 01-16.381). Judges pay particular attention to restocking during the sales period, making a distinction according to the vendor's independence from the supplier.
The Court of Cassation recently reaffirmed these principles, ruling that a company that did not simply sell off the stock it held, but restocked from a supplier constituting a separate legal entity, was in breach of the legislation on sales (Crim. 22 Feb. 2022, no. 21-83.226).
Price display obligations
During sales, the display of prices is subject to strict rules. Traders must indicate the reference price (the old price) and the new reduced price. The reference price must be real and must have actually been charged before the sale.
Order no. 2021-1734 of 22 December 2021 defines the conditions under which traders may use price reduction announcements. In particular, it stipulates that any announcement of a price reduction must indicate the previous price charged by the trader, this price being the lowest price applied over the last thirty days.
Penalties for non-compliance
Failure to comply with the rules governing sales is severely punished. Article L. 310-5 of the French Commercial Code imposes a fine of €15,000 for holding sales on goods that have been in stock for less than a month, or for misusing the word "sale".
This fine can be increased fivefold for legal entities. In addition, misleading advertising about sales may be punishable under the Consumer Code (administrative fine of up to €75,000 for legal entities).
Sunday sales: principles and exceptions
The question of Sunday working and the opening of shops on Sundays often crystallises the debate between freedom of enterprise and protection of employees.
The principle of Sunday rest and its sectoral/geographical exceptions
The French Labour Code lays down a clear principle: weekly rest days must be given on Sundays (article L. 3132-3). However, there are many exceptions to this principle.
Certain establishments may derogate from this rule due to the nature of their business: hotels, restaurants, pubs, food retailers, florists, museums, pharmacies, healthcare establishments, transport companies, etc.
There are also geographical exemptions for tourist areas where there are particularly large numbers of tourists. In these areas, the prefect may grant weekly rest periods on a rotating basis.
Case law strictly regulates the application of these exceptions. For example, the Conseil d'État ruled that the activities of the Louis Vuitton shop on the Champs-Élysées did not involve goods and services intended to facilitate the reception, relaxation or leisure activities of the public, and therefore could not justify Sunday opening (CE 11 March 2009, req. no. 308874).
Specific working conditions and remuneration
Opening on Sundays implies compensation for employees. Article L. 3132-26 of the Labour Code states that the mayor may authorise retail businesses to open on up to twelve Sundays a year.
In this case, employees are legally entitled to :
- Compensatory rest
- Extra pay for this exceptional work
Failure to comply with these rules is punishable by a fifth-class fine, applied as many times as there are people illegally employed.
An important point to note is the compatibility of this legislation with European Union law. The Court of Justice of the European Union has confirmed that French legislation banning shops from opening on Sundays is not contrary to the principle of the free movement of goods, insofar as the restrictive effects on Community trade do not go beyond the scope of effects specific to legislation of this kind.
The importance of support for these specific sales
The complexity and constant evolution of specific sales regulations make legal support particularly relevant.
Legal risk assessment
There are many legal risks associated with non-compliance with the rules governing specific sales:
- Administrative penalties (fines of up to several tens of thousands of euros)
- Criminal penalties (up to prison sentences for certain offences)
- Civil liability actions brought by competitors or consumers
- Damage to commercial reputation
A prior assessment of commercial practices by a legal professional enables these risks to be identified and effectively prevented. This approach is all the more important given that case law in this area is constantly evolving, as demonstrated by the many recent decisions cited in this article.
Bringing practices into line
In addition to risk assessment, legal support is provided to ensure that all commercial practices are brought into line. This applies in particular to :
- Drafting commercial documents (advertising, terms and conditions of sale)
- Consumer information (in particular the absence of a right of withdrawal at trade fairs)
- Prior declaration procedures (unpacking sales, liquidations)
- Organising sales periods in compliance with regulations
- Managing Sunday work and compensation for employees
Properly implemented compliance is a real competitive advantage, not only in terms of avoiding penalties but also in terms of boosting consumer confidence.
Navigating this regulatory maze can be a complex task for retailers. If you are planning to organise an unpacking sale, take part in a fair or exhibition, or simply want to ensure that your sales practices comply with the legislation in force, our firm can provide you with the legal insight you need to secure your commercial activities.
Sources
- French Commercial Code, in particular articles L. 310-1 to L. 310-7 and R. 310-1 to R. 310-19 (regulated sales)
- Consumer Code, articles L. 121-1 et seq., L. 221-1 et seq. (commercial practices and contracts)
- French Labour Code, articles L. 3132-1 et seq (Sunday rest)
- Law no. 2008-776 of 4 August 2008 on the modernisation of the economy
- Law 2014-626 of 18 June 2014 on craft trades, commerce and very small businesses
- Act no. 2019-486 of 22 May 2019 (PACTE Act)
- Law 2020-105 of 10 February 2020 on the fight against waste and the circular economy
- Order no. 2021-1734 of 22 December 2021 on price reduction announcements
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