ARTICLE : FRENCH ECONOMIC MODERNISATION ACT- TRADE NEGOTIATIONS - TRADE RELATIONS - NEGOTIABILITY - PER SE PROHIBITION - DISCRIMINATORY PRACTICES - OFFENCES - SANCTIONS - ART. L. 442-6 - FLEXIBILITY - DISCRIMINATORY PRACTICES

The Economic Modernisation Act: An other step in the endless regulation of trade negociations in France

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The Law on the Modernization of the Economy (“LME”) was passed on July 23rd, 2008. It provides for numerous provisions. Some of them amend French legislation applicable to trade negotiations between suppliers and distributors. LME was presented as the last step of the reform of legislation in terms of trade relations between suppliers and distributors. This reform concerns several essential points. It now authorizes the negotiability of the general terms and conditions of sale of suppliers, cancels the per se prohibition of discriminatory practices and modifies the rules relating to contractual formalities of trade negotiations. Finally, it strictly governs the terms of payment and modifies the list of offences and sanctions provided for in article L. 442-6 of the French Commercial Code. This new reform brings more flexibility, in particular by allowing distributors to directly negotiate the terms and conditions of sale and prices of suppliers, without taking any risks on the account of the prohibition of discriminatory practices. However, the formality rules remain important and sentenced from a criminal viewpoint. In this respect, we note that the simplification target of LME is not totally reached. In addition, LME introduces safeguards, in particular by reducing payment terms.

*This article is an automatic translation of the original article, provided here for your convenience. Read the original article. 1. After months of discussions between advocates of small trade, suppliers, SMEs and mass distribution, the Law for the Modernization of the Economy known as "LME", was finally voted on July 23, 2007. This text constitutes the second and last stage of the reform of the legislation, concerning the relations between suppliers and distributors. It should be remembered that this reform, announced as fundamental, had been initiated by the so-called "Chatel" Law No. 2008-3 of 3 January 2008 and to a lesser extent by the Dutreil Law No. 2005-882 of 2 August 2005. 2. Obviously and fortunately, the 173 articles of this ambitious text are not all devoted to the

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