Serious misconduct by a commercial agent: notice remains possible

A principal may grant a notice period to its commercial agent while relying on serious misconduct (faute grave): granting a notice period does not, as a matter of principle, rule out the serious misconduct that deprives the agent of the compensatory indemnity on termination of the contract (indemnité compensatrice de fin de contrat). The court itself characterises the breaches alleged, even where the termination letter does not label them as such. Notice granted in this context falls outside the statutory regime governing notice.

Key points

• The grant of a notice period by the principal does not, as a matter of principle, rule out serious misconduct attributable to the commercial agent.
• The agent's serious misconduct, understood as misconduct that undermines the common purpose of the mandate in the common interest (mandat d'intérêt commun) and makes it impossible to maintain the contractual relationship, deprives the agent of the compensatory indemnity on termination provided for by Articles L. 134-12 and L. 134-13 of the French Commercial Code.
• The termination letter does not have to characterise the breaches formally as serious misconduct: that characterisation is for the court, on the basis of the grievances the letter sets out.
• The provisions of Article L. 134-11 of the French Commercial Code relating to notice do not apply where the agency contract comes to an end because of serious misconduct by one of the parties.
• Notice granted voluntarily despite serious misconduct therefore does not follow the statutory rules on the duration and expiry of notice.

Notice period granted and end-of-contract indemnity refused

The commercial chamber dismisses the appeal: a principal that grants a notice period may nevertheless rely on serious misconduct depriving the commercial agent of the end-of-contract indemnity (Com., 3 June 2026, No. 23-20.129). The decision also clarifies the fate of notice granted voluntarily where the termination rests on serious misconduct by the agent.

A company had been appointed as commercial agent in 2009 for two départements. In September 2013, a new principal took over from the first and continued the relationship with the same agent. By letter of 12 February 2019, the principal notified the termination (résiliation) of the agency contract, alleging serious misconduct: inappropriate conduct and remarks towards its employees, failure to comply with commercial policy and administrative procedures, and lack of motivation in seeking out new customers. The same letter opened a three-month notice period. The agent claimed the compensatory indemnity on termination, which the principal refused.

The agent then brought proceedings against its principal to obtain the indemnities arising from the termination. The court of appeal (CA Rennes, 20 June 2023, No. 21/04515) dismissed its claims for the end-of-contract indemnity, for notice and for commercial damage. Before the Cour de cassation (France's highest civil court), the agent argued that granting a three-month notice period showed that the relationship could have continued, and therefore that there was no serious misconduct. The commercial chamber rejects that reasoning with a statement of principle (free translation):

the grant of a notice period by the principal does not, as a matter of principle, rule out serious misconduct attributable to the commercial agent justifying termination of the contract without indemnity.

What are the consequences for the principal and the agent?

A principal that terminates for serious misconduct owes neither the compensatory indemnity on termination nor indemnity in lieu of notice, even if it allowed the agent a period before actual exit. The serious misconduct accepted is misconduct that undermines the common purpose of the mandate in the common interest and makes it impossible to maintain the contractual relationship. The decision approves the lower court judges for having applied that test to breaches which were established, repeated and directed in particular against the principal's staff.

Granting a notice period nevertheless remains a factor in the assessment, not a mere formality without effect. In this case, the lower court judges explained why that notice did not deprive the misconduct of its gravity: the nature and repeated character of the breaches, the clear attacks on the staff whom the principal had to protect under its obligations as an employer, and the limited contact between the agent and that staff. The solution is therefore not mechanical: it merely prohibits inferring from the notice period alone that there was no serious misconduct.

The characterisation used in the termination letter is no more decisive. The principal had alleged breaches without formally designating them as serious misconduct. The commercial chamber holds that this absence of formal characterisation does not stand in the way of the outcome reached:

the court of appeal, which neither disregarded the legal consequences of its findings nor distorted the termination letter of 12 February 2019, but characterised, as it was required to do, the misconduct alleged by the principal against the commercial agent, was entitled to hold that the commercial agent's breaches constituted serious misconduct, even though the termination letter did not characterise them formally as such.

Voluntary notice falls outside the statutory regime

The statutory regime governing notice does not apply where the agency contract comes to an end because of serious misconduct, so that notice granted voluntarily does not follow its rules. The agent claimed an indemnity corresponding to the days between the end of the notice granted and the end of the calendar month, relying on the rule of coincidence laid down by the provision. The commercial chamber rejects that ground of appeal, setting out the scope of Article L. 134-11 of the French Commercial Code:

It follows from Article L. 134-11 of the French Commercial Code that the provisions of that text relating to the notice due in the event of termination of an agency contract of indefinite duration do not apply where the contract comes to an end because of serious misconduct by one of the parties.

One question remains open. The agent also argued that the ambiguity of the termination letter, which did not expressly mention serious misconduct while granting three months' notice, could have led it to believe that the statutory regime applied. The Cour de cassation does not examine that argument: it had not been raised before the lower court judges. The decision therefore does not settle the fate of a termination letter that is ambiguous as to the notice regime applied.

How to secure a termination for serious misconduct?

The strength of a termination lies in the precision of the grievances set out in the letter and in proof of the breaches, not in the wording of the characterisation used. The lower court judges had recalled that it is for the principal to establish the serious misconduct it relies on, and they relied on the written exchanges and the detailed complaints of the employees concerned. The grievances examined are those set out in the termination letter.

• Set out in the termination letter the facts alleged, dated and linked to identifiable contractual obligations.
• Keep the documents that establish them: emails, minutes, internal reports, earlier warnings that went unheeded.
• Do not assume that a notice period granted in order to organise the transition amounts, in itself, to recognition that the relationship could have continued.
• Check what the agency contract provides as to the duration and terms of notice, the statutory regime being excluded in the event of serious misconduct.

On the commercial agent's side, a challenge cannot rest on the mere fact that notice was granted. The debate turns on the reality and gravity of the grievances, on whether they are attributable to the agent and on their effect on the common purpose of the mandate. The decision also shows the value of raising before the lower court judges, and not later, any argument based on the drafting of the termination letter.

Checks before notifying the termination

Before terminating an agency contract for serious misconduct, a principal is well advised to check that each grievance is dated, documented and linked to an obligation under the contract. It is for the principal to assess whether the breaches make it impossible to maintain the contractual relationship, which is the condition for the serious misconduct accepted by the courts. If it chooses to allow a period before actual exit, that period does not follow the statutory rules on notice where the termination rests on serious misconduct. The agent, for its part, is well advised to focus its challenge on the reality of the facts alleged and on their gravity, and to raise all arguments based on the termination letter from the first instance onwards.