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.
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