Judgment;Summary — ECLI:EU:C:2020:438
Date: 2020-06-04
Language of the case: French
Court formation: Ninth Chamber
Subject matter: Right of establishment;Freedom to provide services
Procedure: Reference for a preliminary ruling
Origin: France

Translation   C-828/18 — 1 
Case C-828/18 
Request for a preliminary ruling 
Date lodged: 
24 December 2018 
Referring court: 
Tribunal de commerce de Paris (France) 
Date of the decision to refer: 
19 December 2018 
Applicant: 
Trendsetteuse SARL 
Defendant: 
DCA SARL 
  
...  
... [procedural details] 
The facts and subject matter of the dispute 
The limited liability company DCA manufactures and markets prêt-à-porter 
clothing and jewellery under the brand IZI-MI (‘IZI’) for a retail client case, and 
runs two retail boutiques in Corsica.  
The limited liability company TRENDSETTEUSE (also ‘TREND’) is a 
commercial agency specialising in prêt-à-porter clothing and accessories. It 
employs sub-agents in various regions and distributes products on behalf of its 
principals in showrooms, at trade shows and from its offices in Paris. 
The directors of those two undertakings ... concluded an oral agreement in July 
2013 under the terms of which DCA engaged TREND to market its brand IZI in 
its showroom, in return for which DCA would pay TREND a 15% commission on 
the sale price of items of prêt-à-porter clothing, and 12% on the sale price of 
jewellery in the so-called Greater North sector (that is to say, the whole of the 
north of France), and later, from June 2014, in the so-called Greater South sector 
EN 
REQUEST FOR A PRELIMINARY RULING OF 19. 12. 2018 — CASE C-828/18 
 
2  
(the whole of the south of France). Thus, as of June 2014, according to DCA 
itself, TREND was responsible for concluding contracts, on behalf of and in the 
name of DCA, for the sale of IZI branded products to retailers throughout France, 
with the exception of Corsica, which DCA retained. TREND was therefore 
required to introduce DCA to a client base which would then place orders either 
through TREND or directly with DCA. TREND was thus fulfilling a remit, on 
behalf of DCA, to acquire clients, take orders, conclude sales contracts and track 
shipments and deliveries.  
DCA considered that its sales in the Greater South sector were insufficient 
because of what it regarded to be the lack of engagement by TREND’s subagent 
in that area, so it notified TREND, by letter of 29 March 2016, of its decision to 
withdraw TREND from that sector (amounting to half of France) and informed 
TREND that it would be compelled to terminate their collaboration altogether if 
TREND did not accept the reduction of its geographic scope. By letter ... of 
12 April 2016, TREND then put it to DCA that its withdrawal from the Greater 
South sector was not justified and that it objected to the withdrawal because it 
would entail the loss of half of its turnover, and DCA had not proposed to 
compensate it for that loss. ... In the spring of 2016, DCA handed responsibility 
for that sector over to another agent, the company Joe and Co, and set up 
temporary showrooms in the south to enable the latter to present DCA’s 
collections. 
On 14 October 2016, TREND therefore terminated ... its contract, holding DCA 
exclusively responsible, and claimed damages for breach of contract which are 
legally payable to commercial agents. 
DCA refused to pay those damages because it considered, on the one hand, that 
TREND was not a commercial agent within the meaning of the first paragraph of 
Article L. 134-1 of the Code de commerce (Code of Commerce) and, on the other, 
that DCA was not responsible for the termination, and, finally, that TREND had 
been guilty of serious misconduct. 
TREND ... then brought proceedings before the referring court. 
Procedure 
... [procedural details] 
... the limited liability company TRENDSETTEUSE requests that the court, ...: 
... [stamps] 
– prior to giving a decision on the substance of the case, refer the following 
question to the Court of Justice of the European Union for a preliminary 
ruling: 
TRENDSETTEUSE 
 
3 
‘Should Article 1(2) of Council Directive 86/653/EEC of 18 December 1986 
be interpreted as meaning that a self-employed intermediary who does not 
have the power to change the prices and contractual conditions set by his 
principal does not have the authority to negotiate for the purposes of that 
article and cannot therefore have the status of commercial agent within the 
meaning of that directive?’;  
– declare that the termination of the agency contract between DCA and 
TRENDSETTEUSE is attributable solely to DCA and that no misconduct 
can be alleged against TRENDSETTEUSE; 
– order DCA to pay TRENDSETTEUSE the following sums: 
– EUR 27 439.76 ... by way of the commission due; 
– EUR 5 800 ... by way of compensation in lieu of notice;  
– EUR 43 100 by way of compensation for termination of the agency 
contract; 
– [ancillary claims] 
... DCA requests that the court ...: 
Principally: 
... [stamps] 
– reject the request made by TRENDSETTEUSE for a reference for a 
preliminary ruling on interpretation in so far as it is unnecessary; 
– dismiss all the claims made by TRENDSETTEUSE; 
– ... [counterclaim]; 
In the alternative: 
– ... [procedural provisions]. 
...  
... [procedural details]. 
Submissions of the parties (on the only question referred for a preliminary 
ruling) 
[In support of its] request [for the court to refer] a question for a preliminary 
ruling on the interpretation of the term ‘negotiation’ [used] in Article 1(2) of the 
Directive of 18 December 1986, in the framework of its transposition into national 
REQUEST FOR A PRELIMINARY RULING OF 19. 12. 2018 — CASE C-828/18 
 
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law by Article L. 134-1 of the Code of Commerce defining the protection of 
commercial agents throughout Europe, TREND submits that DCA contends 
principally that the contract between the two parties cannot be classified as a 
commercial agency contract because TREND does not have the power to 
negotiate the price of the items which it sells on behalf of its principal. 
It notes that: 
– According to the best French dictionaries, the word ‘négocier’ [‘negotiate’] 
means ‘... to reach an agreement by discussion; to deal with others on behalf of 
a third party ... . Action taken to reach an agreement in order to conclude a 
business deal ...’. Legal dictionaries give the same definition: ‘negotiation is the 
act of making a business deal and, by extension, holding the various meetings 
[and] taking the necessary steps to reach an agreement ...’. 
– It is within the remit of a commercial agent to secure orders from clients on 
behalf of his principal, to establish a client base (and/or to retain the client base 
that existed prior to his involvement), and to sign orders and sales contracts on 
behalf of and in the name of his principal. Commercial agents’ main activity 
rests on finding new clients and on their ability to achieve and increase 
turnover for their principal and to secure client loyalty for them. 
– A commercial agent must be able to make offers on behalf of and in the name 
of his principal in terms of prices and delivery quantities and times. 
Conversely, he cannot change the prices set by the principal because, as an 
agent, he is not permitted to deviate from the instructions of his principal. 
– Moreover, some French courts and, predominantly, several courts in other [EU] 
Member States, have given rulings to that effect, and the EU Member States 
have adopted legislation to that effect. 
– The Directive of 18 December 1986, which has merely been transposed 
literally by Article L. 134-1, with the term ‘négocier’ [‘negotiate’] having been 
used in both to define the status of a commercial agent, has the aim and 
purpose of eliminating all restrictions to the carrying-on of that activity and to 
harmonise the conditions of competition within the [European Union]. 
TREND submits that, by making the applicability of the status of commercial 
agent subject to the condition that the person claiming that status can prove that he 
has the authority to change his principal’s conditions of sale and set the prices of 
the products which he is selling on behalf of that principal, the Cour de cassation 
(Court of Cassation) has infringed the terms of the aforementioned directive, or at 
least interpreted it differently from other [EU] courts, thereby distorting free 
competition between Member States; ... . 
... 
TRENDSETTEUSE 
 
5 
In its defence, DCA, which objects to the question being referred for a preliminary 
ruling, notes that, although TREND was authorised to conclude contracts of sale 
on behalf of DCA, it did not have the authority to negotiate the terms and 
conditions of sale for the purposes of the first paragraph of Article L. 134-1 of the 
Code of Commerce. The Cour de cassation (Court of Cassation) has adopted a 
restrictive approach to the term ‘negotiate’ in so far as it means having the power 
to change prices and conditions of sale. A person who has the power merely to 
promote product sales and obtain orders from clients on behalf of his principal 
does not have the status of commercial agent if he cannot change the prices set by 
that principal.  
... 
... [Assessment of the] referring court (on the only question referred for a 
preliminary ruling) 
In the present dispute, prior to any discussion concerning the matters of fact which 
gave rise to their dispute, the parties disagree on a question of law, namely the 
legal classification of the contract concluded between them. TREND submits, on 
the basis of the first paragraph of Article L. 134-1 of the Code of Commerce, that 
it has the status of commercial agent, which is disputed by DCA. Article L. 134-1 
defines a commercial agent ‘as a representative who, on a self-employed basis, ... 
has continuing authority to negotiate and, where appropriate, conclude sales 
contracts ..., on behalf of and in the name of producers, traders ...’. That article, 
by the Law of 25 June 1991, transposes Council Directive 86/653/EEC of 
18 December 1986 into French law. The Directive provides that ‘for the purposes 
of this Directive, “commercial agent” shall mean a self-employed intermediary 
who has continuing authority to negotiate the sale or the purchase of goods on 
behalf of another person, hereinafter called the “principal”, or to negotiate and 
conclude such transactions on behalf of and in the name of that principal’. It 
follows that the term ‘négocier’ [‘negotiate’], which is used in Article L. 134-1, is 
reproduced verbatim in the transposition of the Directive, and that the element of 
negotiation must be present in order for the rules on commercial agents to be 
applicable to a contract. 
The two parties agree that TREND had a contractual obligation to introduce DCA 
to a client base which would then place orders either through TREND or directly 
with DCA. TREND was thus fulfilling a remit, on behalf of DCA, to acquire 
clients, take orders, conclude sales contracts and track shipments and deliveries. 
They also agree that TREND could [not] change the conditions of sale, and in 
particular the prices of the products ordered by its clients, which were set by 
DCA. However, they disagree on the interpretation to be given to the term 
‘négociation’ [‘negotiation’] used in Article L. 134-1. According to TREND, 
negotiation is the act of making a business deal and, by extension, holding the 
various meetings [and] taking the necessary steps to reach an agreement, and it 
follows that the status of commercial agent is defined by the nature of the tasks 
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entrusted to the agent under the contract, which consist of securing orders from 
clients on behalf of his principal, establishing a client base for that principal 
(and/or to retaining the client base that existed prior to his involvement), and 
signing orders and sales contracts on behalf of and in the name of his principal. 
Conversely, according to DCA, the term ‘negotiate’ means having the power to 
change conditions of sale, and in particular the prices of the products set by the 
principal. In support of that, DCA relies on French case-law, according to which 
only an agent who has the power to change terms and conditions, in particular the 
prices set by his principal, has the status of commercial agent. 
The term ‘négocier’ [‘negotiate’] used in Article L. 134-1 of the Code of 
Commerce is, as stated above, taken verbatim from the aforementioned directive 
on the status of commercial agents in the EU. In order to give a ruling on the 
present case, this court must therefore rule, in the first place, on the interpretation 
of the term ‘negotiate’ used in a European directive which has the aim of 
harmonising the conditions of competition within the European Union and 
eliminating restrictions on the carrying-on of the activities of commercial agents 
in the Member States. 
... . 
... ... . 
... nothing in [EU] legislation or in French laws and regulations makes it possible 
... to give a definition of the term ‘negotiate’. 
... [justification for bringing proceedings before the Court of Justice despite 
DCA’s opposition to the request for a preliminary ruling] 
It follows from [the judgment of 12 December 1996], Kontogeorgas [C-104/95, 
EU:C:1996:492] that, although [the power of] negotiation is an essential factor in 
determining whether a representative has the status of commercial agent, the 
Court of Justice does not provide any definition of the term ‘negotiate’ in the 
grounds of the judgment, ... . 
... 
In order to understand the meaning of a word in the French language, it is 
necessary, first of all, to refer to the definition given by the Académie [Française] 
in dictionaries. The Robert [dictionary] states that ‘to negotiate is to engage in 
trade, to deal with others on behalf of a third party; taking steps to reach an 
agreement in order to conclude a business deal’. The usage and ordinary sense of 
the term, both in everyday life and in business and commerce, convey exactly the 
same meaning, which is that negotiation consists of taking steps to convince 
someone, either on one’s own behalf or for a third party, to do something, to sign 
a document, to take action and to convince a buyer that the item or the price being 
offered meets their expectations. 
TRENDSETTEUSE 
 
7 
Academic writings contain similar definitions: accordingly, in Vocabulaire 
juridique by [Gérard] Cornu, negotiation is defined as ‘the act of making a 
business deal and, by extension, handling the various preliminary activities such 
as exchanges of views, consultations in order to reach an agreement’. [Frédéric] 
Fournier, [the author of] L’Agence commerciale (written in 1998), states that 
‘commercial agents are, in reality, expected to generate business ... without 
denying the potential role of commercial agents in concluding a business 
transaction, their primary function is to attract offers from the company’s 
potential clients’. More recently, in 2006, Prof. Ferrier stated in Le droit de la 
distribution that ‘the primary function of a commercial agent has less to do with 
concluding contracts than with creating a client base for his principal’. Similarly, 
[Nicolas] Dissaux has stated that ‘negotiation can involve canvassing clients, 
guiding their choices on the basis of their requirements, gaining their loyalty 
through marketing actions or by adding value to the product ... . To negotiate 
means to make offers with a view to reaching an agreement, to canvass clients, 
propose conditions set by the principal, convince them to accept those conditions 
and send the draft contract to the principal’. Ultimately, it is considered in 
academic writings in general that ‘the true meaning of the word negotiation is the 
act of dedicating time to reconciling the wishes of the parties in order to reach an 
agreement’. 
It is therefore clear that academic writings give a definition which is different 
from that adopted by the Cour de cassation (Court of Cassation), given that, far 
from stating that negotiation involves setting the price and changing the 
contractual conditions set by the principal, academic writings maintain, on the 
contrary, that the agent offers the client the conditions set by his principal. 
Moreover, courts in other EU Member States apply a similar definition to that 
used in French academic writings. Accordingly, for example, in the United 
Kingdom, the Court of Appeal ... ruled, in its judgment of 23 April 2008 [Nigel 
Fryer Joinery Services Ltd v Ian Firth Hardware Ltd [2008] EWHC 767 (Ch)] that 
‘negotiation consists of the act, by an agent, of canvassing potential clients to 
encourage them to conclude a contract with his principal, even if he does not have 
the power to set the conditions of the contract, in particular the price’. As regards 
the transposition of the Directive into the law of other EU Member States, 
Article 1742 of the Italian Civil Code translated the term ‘negotiate’, from the 
English language version of the Directive, as ‘promuovere’, which means 
‘promote’. Similarly, in the Spanish Law of 27 May 1992 transposing the 
Directive, the term ‘promotion’ is used and commercial agents are said to 
‘promote business transactions on behalf of others’. Equally, Portugal’s Decree-
Law of 13 April 2013 uses the following definition: ‘an agency [contract] is a 
contract under which one of the two parties is required to promote on behalf of 
the other...’. Likewise, section 84 of the German Code of Commerce, deriving 
from the Law of 23 October 1989 transposing the Directive, provides that ‘a 
commercial agent is a person who, in a self-employed capacity, is regularly 
entrusted with the task of obtaining business for another person’. It follows that, 
in the legislation of other Member States, the terms used to translate the word 
REQUEST FOR A PRELIMINARY RULING OF 19. 12. 2018 — CASE C-828/18 
 
8  
‘negotiate’, from the English version of the Directive, are clearer than the French 
word ‘négocier’, and meanings of those terms are such that they cannot be 
interpreted as necessarily implying the authority to set prices. 
It should be noted that ... it is set out in the second and third recitals of the 
Directive that: ‘whereas the differences in national laws concerning commercial 
representation substantially affect the conditions of competition and the carrying-
on of that activity within the Community and are detrimental both to the 
protection available to commercial agents vis-à-vis their principals and to the 
security of commercial transactions; whereas moreover those differences are such 
as to inhibit substantially the conclusion and operation of commercial 
representation contracts where principal and commercial agent are established in 
different Member States’. Those recitals show that the main objective of the 
Directive is to ensure the protection of commercial agents by harmonising the 
status of commercial agents across the Member States in order to facilitate free 
movement and conditions of competition. However, it follows from an assessment 
of the abovementioned foreign case-law and legislation that there is a divergence 
between France and the other Member States on a matter which determines the 
scope of a rule of EU law. This is contrary to the objectives of the Directive and to 
the need to ensure the uniform application of EU law. 
Even in France, several courts have recently departed from the case-law of the 
Cour de cassation (Court of Cassation). Accordingly, in its judgment of 
26 February 2014, the Cour d’appel de Rennes (Rennes Court of Appeal) ruled 
that ‘the power to negotiate cannot be reduced simply to the power to set the 
prices of the goods, which are dependent on the principal’s commercial strategy 
with which the agent must comply’. In the grounds of its judgment of 8 September 
2016, the Cour d’appel de Lyon (Lyon Court of Appeal) stated that ‘the fact that 
an agent conducts commercial transactions in the context of the remit given, in 
particular for the rates applicable to purchase orders, does not mean that he 
cannot negotiate within the framework of purchase order pricing instructions. 
That fact does not indicate an absence of negotiating power, but indicates that 
there is a limit to the remit which is given to a commercial agent who does not 
necessarily have the power to change the prices imposed on him by his principal 
...’. Finally, the 19th chamber of the referring court has given two very recent 
judgments [to the same effect]. In the grounds of the first (Newbev v Altipiano of 
28 November 2018), the referring court stated as follows...: ‘the commercial 
agent’s task of negotiation cannot, as suggested by Altipiano, be reduced to the 
power to negotiate prices or conclude contracts on behalf of the principal’ and in 
the grounds of the second (DJMS v Eurodesserts and Incopack of 7 February 
2018), it stated as follows ...: ‘holding meetings with clients to determine prices 
and proposing the sale of products and services within the framework of a binding 
remit is sufficient to establish the status of commercial agent, even if the prices 
and services in question would require the prior approval of the principal before 
becoming applicable’. 
TRENDSETTEUSE 
 
9 
It follows from the foregoing that it cannot be claimed that there is a clear answer 
to the question of whether the status of commercial agent is linked to his power to 
set prices or change the conditions of sale set by his principal. It is, in any event, 
indisputable that the answer to that question leaves room for reasonable doubt. 
... 
The question referred relates to the definition and scope of the term ‘négociation’ 
[‘negotiation’] contained in Article L. 134-L on the classification of a commercial 
agency contract. It is central to several judgments of the Cour de cassation (Court 
of Cassation), in particular the judgment of 20 January 2015, in which the Haute 
Juridiction (High Court) set aside the judgment of the Cour d’appel (Court of 
Appeal) on the ground of infringement of Article L. 134-1 of the Code of 
Commerce, stating that the applicant had the status of commercial agent, even 
though it was clear from its findings that he did not have the power to grant a 
discount on the prices and conditions of sale set by his principal, and therefore 
that he did not have any negotiating power. 
As regards the present case, the applicant asks that, before settling the dispute, the 
Tribunal [de commerce de Paris (Commercial Court, Paris)] refer for a 
preliminary ruling a question on whether the applicant should be denied the status 
of commercial agent solely because he does not have the power to change the 
conditions of sale set by his principal. In order to do so, the referring court would 
have to interpret the term ‘négocier’ [‘negotiate’] used in Article L. 134-1. 
However, as that article is derived directly from the transposition of a Directive in 
which the word ‘négocier’ is also used, the referring court would be required to 
interpret a Community rule, which it is not entitled to do. It is therefore relevant to 
the outcome of the present dispute to refer a question to the Court of Justice of the 
European Union. 
It follows from all the foregoing that the outcome of the present dispute is directly 
dependent on the meaning and scope to be given to the term ‘negotiate’ used in 
the Directive of 1986 on commercial agents, that it is a question, therefore, of 
interpreting [EU] provisions, which falls within the jurisdiction of the Court of 
Justice, that the Court has never ruled on that matter, that the answer to the 
question is not self-evident, since different courts and legislation in the Member 
States have addressed it in a number of different, or even contradictory, ways, and 
that there is therefore reasonable doubt as to the answer. It is therefore legitimate 
and necessary to refer a question to the Court of Justice for a preliminary ruling.  
... 
On those grounds, 
... 
– ... 
REQUEST FOR A PRELIMINARY RULING OF 19. 12. 2018 — CASE C-828/18 
 
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– the following question is referred to the Court of Justice of the 
European Union for a preliminary ruling pursuant to Article 267 of the 
Treaty on the Functioning of the European Union: 
‘Should Article 1(2) of Council Directive 86/653/EEC of 18 December 
1986 on the status of commercial agents be interpreted as meaning 
that a self-employed intermediary who is acting as an agent on behalf 
of and in the name of his principal, but does not have the power to 
change the prices and contractual conditions of his principal’s sales 
contracts, does not have the authority to negotiate those contracts for 
the purposes of that article, and consequently cannot be classified as a 
commercial agent and benefit from the status provided for in the 
Directive?’,  
... 
... [procedural details] 
... [signatures]