Abrupt termination of established commercial relations

A leading industrial tools company terminated its contractual relationship with our client, a major communications and marketing group, without any prior notice, despite the parties having maintained a well-established commercial relationship for nearly six years.

As a result of the abrupt termination, our client was given no opportunity to reorganise its operations, notwithstanding the significant resources it had committed to the performance of the contract, including a dedicated team of 26 employees and approximately ten leased vehicles.

Following unsuccessful attempts to reach an amicable settlement, the firm initiated proceedings before the competent Commercial Court, seeking compensation for the losses suffered by our client as a result of the abrupt termination of an established commercial relationship.

In support of its claims, the firm argued, principally, that the industrial tools company had failed to comply with the termination provisions of the fixed-term agreement, which should therefore have remained in force until its contractual expiry date.

In the alternative, the firm argued that the relationship had been terminated without any notice period, whereas, given the nearly six-year duration of the parties’ commercial relationship, our client was entitled to at least eight months’ prior notice under the applicable French case law.

The firm further sought recovery of the costs incurred by our client as a direct consequence of the termination, including the costs associated with the dismissal and redeployment of employees assigned to the contract and the early termination of leases relating to vehicles dedicated to its performance.

To substantiate the loss of profit resulting from the termination, the firm prepared a detailed financial assessment based on the monthly contribution margin generated by our client from its relationship with the industrial tools company, in accordance with the methodology established under French law and case law. Our team also produced detailed supporting evidence quantifying the restructuring and termination costs incurred, including employee dismissal and redeployment costs and charges arising from the early termination of the vehicle leases.

Finally, the firm sought compensation for the non-pecuniary harm suffered by our client as a result of the particularly sudden and disruptive manner in which the contractual relationship was terminated.