LECLERC is severely punished for major imbalance - Paris Court of Appeal, 18 December 2013, No. 12/00150

The Court of Appeal of Paris ruled on the question of the conflict between the General Terms and Conditions of Sale and the General Terms and Conditions of Purchase, when reviewing the annual contracts between the company LECLERC (GALEC) with 58 of its suppliers.

The clause in question was worded as follows: "The Supplier agrees to the terms of the purchasing conditions attached to this contract. Its conditions shall apply to any supply of products and any services provided by the Supplier upon the entry into force of this framework agreement". It also stated: "the purchasing conditions override the Supplier's general terms and conditions, when the provisions of these purchasing conditions, contradictory to the Supplier's General Terms and Conditions of Sale, are duly accepted by the Supplier."

The Court severely punished the company LECLERC for major imbalance (a fine of € 500,000) after finding that this clause consisted of the following three elements:

Firstly, this clause has the effect of reversing the structure of negotiation as it is intended by the legislature under article L. 441-6 of the Commercial Code, which states that the Terms and Conditions of Sale "are the foundation of business negotiation".

Secondly, the Court also points to the intangible nature of the Distributor's General Terms and Conditions of Sale since it was a standard form signed with each of the 58 suppliers, regardless of their activity, products or services, or even their size.

Thirdly, the Court finally based its decision on the systematisation of LECLERC's General Terms and Conditions of Purchase. The distributor defended itself by claiming that several suppliers' General Terms and Conditions of Purchase stipulated that they shall override the Distributor's General Terms and Conditions of Purchase.

The Court therefore upholds the principle of genuine bilateral negotiation of the terms of sale, in which the Terms and Conditions of Sale constitute the initial foundation. What is sanctioned in this judgement is not the simple exclusion of the General Terms and Conditions of Sale (which can be excluded in fine), but above all the lack of any negotiation between the parties.