NEWS

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19-01-2018

 

Sudden termination of a subcontracting relationship in the presence of economic difficulties of the subcontracted market

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In a recent judgment, the commercial chamber of the Court of Cassation (Cass. com., November 8, 2017, n°16-15285) took into account the economic difficulties encountered by a principal faced with a significant drop in sales to judge that he was not responsible for the sudden termination of commercial relations established with his subcontractor.

 

In this case, a French men's ready-to-wear brand subcontracted the manufacture of shirts to a company located in Bangladesh. The brand initially reduced the volumes purchased from subcontractors during 2008, then at the beginning of 2010, when the subcontractor had announced an increase in the unit cost of shirts to compensate for the drop in volumes, the brand informed the subcontractor that it was no longer possible for him to obtain supplies from him.

 

The subcontractor therefore sued the brand before the French courts for payment of damages for sudden termination of the subcontracting relationship.

 

The Court of Cassation confirms the judgment of the Paris Court of Appeal which dismissed the subcontractor of all of its claims, in these terms :

 

First, the Court of Cassation finds that the client has made no volume commitment to its partner and noted that the brand itself had suffered a 15% drop in its turnover. The Commercial Chamber therefore considers that it has been established that the fall in orders from 2008 was inherent to a crisis in the textile market which does not engage the responsibility of the brand. The Court of Cassation even specifies that the principal could only pass on this reduction "  insofar as a principal cannot be forced to maintain a level of activity with of its subcontractor when the market itself decreases ".

 

Secondly, the Court of Cassation rules that the increase in the unit price of the shirts which motivated the total rupture by the brand is also a consequence of the crisis in the sector of activity and the new economy of the commercial relationship which had resulted from it so that the total rupture of the commercial relation in 2010 does not engage the responsibility of the sign either.

 

It also appears to us that in order to rule thus, the Court of Cassation pointed out that the ordering brand had offered financial aid financial aid to compensate for the reductions in volume.

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Roland Rinaldo, lawyer, Cabinet Artlex Nantes

Guillaume Masson, lawyer, Cabinet Artlex Nantes

 

 

 

Commercial Chamber of the Court of Cassation, judgment of November 8, 2017, appeal no. 16-15285, Yves Dorsey v. Esquiss, sudden termination of established commercial relations, article L.442-6 C. com, subcontracting, textile sector , significant drop in sales, volume commitment, obligation to maintain the level of activity