Agency and distribution agreements. Phrases to avoid when ending a business relationship without a written contract

11 de Outubro, 2025

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How real estate tokenisation works, what is the regulatory framework, and what rights investors actually acquire?

Real estate tokenisation, already present in Spain for several years, is no longer a futuristic promise but a tangible reality in the Spanish market. It represents more than just a technological innovation: it signifies a profound transformation in how we understand ownership, investment, and liquidity within the real estate sector — one of the most traditional and tightly regulated areas of our economy.

What is real estate tokenisation and how does it work?

In essence, to tokenise a property today means converting the economic rights associated with that asset into digital units that can circulate on blockchain-based platforms. Each token represents a fraction of those economic rights, allowing investors with more modest capital to access a market that has traditionally required substantial investments.

The role of smart contracts

Tokens operate through smart contracts that automatically execute the distribution of rental income or resale proceeds of that partial representation of the property, including any potential difference in value, eliminating intermediaries and providing transparency to the process. This automation is not merely cosmetic: it reduces operational costs, speeds up transactions, and potentially increases the liquidity of assets that have historically been among the least liquid in the market.

The legal reality: what is actually tokenised in Spain

It is essential to clarify from the outset a key point often blurred by marketing discourse: in practice, real estate tokenisation projects in Spain do not tokenise the property itself but rather the economic rights linked to a corporate vehicle (usually a special purpose vehicle, or SPV) that owns the property. Spanish law only allows the tokenisation of shares in joint-stock companies (sociedades anónimas) using distributed ledger technology; shares in limited liability companies (sociedades limitadas) cannot be tokenised. This means that if the SPV is a limited liability company, its shares cannot be directly tokenised — only other instruments such as participative loans or credit rights over income streams can be represented as tokens. Only if the SPV is incorporated as a joint-stock company is it legally possible to tokenise its shares.

What rights does a real estate token investor actually acquire?

An investor who acquires a token does not become a direct co-owner of the property. Depending on the structure chosen, they may become a shareholder in a tokenised joint-stock company that owns the property or a holder of economic rights derived from participative loans or other indirect forms of economic participation issued by the SPV that owns the asset. The distinction is crucial: if the company faces solvency issues or bankruptcy, the value of the token collapses with it, and the investor cannot exercise any direct real rights over the property.

Spanish law, rooted in centuries of land registry tradition, does not currently allow the transfer of real property rights through the mere transfer of tokens; a public deed and registration are required for the transfer to be effective against third parties. The SPV structure is therefore a compromise between technological possibilities and the demands of the current legal framework.

Regulatory framework for real estate tokenisation in Spain

CNMV authorisation and the 2023 Securities Market Law

The Spanish regulator has begun to establish a legal foundation for this technology to develop within a secure framework. In 2023, the Spanish National Securities Market Commission (CNMV) authorised Adventurees Capital PFP as the first crowdfunding platform to issue tokenised securities — a milestone in the convergence of crowdfunding and blockchain. This authorisation was accompanied by the approval of Law 6/2023 on the Securities Market, which expressly recognises the representation of transferable securities through distributed ledger technologies such as blockchain, granting them full legal validity.

The role of the Land Registry in the blockchain era

In parallel, the Spanish Association of Land Registrars is exploring how to integrate blockchain technology into the registry system, although it is important to clarify the real scope of these initiatives. Current projects focus mainly on complementary applications such as digital management of the Building Book or improved traceability and accessibility of registry information. They do not aim to replace the fundamental pillars of the system: execution of public deeds before a notary and registration of ownership, which remain absolutely mandatory for the transfer of real rights over property. Registrars are firm in their institutional stance: blockchain can complement and streamline document management, but it cannot replace the legal control exercised by the registrar or the protection of third parties offered by the Land Registry — both essential components of the Spanish legal system. This position reflects the current limitation of the model: tokens circulate on the blockchain representing positions in SPVs or economic rights over them, but the actual ownership of the property remains anchored in the traditional registry system, held by the corporate vehicle, and any transfer of that ownership must still follow the conventional legal process with all its guarantees.

European regulation: ECSPR, MiCA and the DLT Pilot Regime

Spain also benefits from a European regulatory framework that is positioning the EU as a global leader in digital asset regulation. The European Crowdfunding Service Providers Regulation (ECSPR) harmonises the rules for crowdfunding platforms, allowing an authorised platform in one Member State to operate across the EU through the so-called “European passport”. The MiCA Regulation, which came fully into force on 30 December 2024, broadly regulates crypto-asset markets, setting obligations for both issuers and service providers. The DLT Pilot Regime (EU Regulation 2022/858) allows market infrastructures based on distributed ledger technology to operate under certain temporary exemptions, creating a controlled testing environment to assess the potential of these technologies in financial markets.

The Spanish regulator’s approach could be described as cautiously supportive: innovation is encouraged, but strict compliance with anti-money laundering, customer identification, and disclosure obligations is required to protect investors. This is not technological laissez-faire, but rather an effort to integrate innovation within a solid framework of legal guarantees.

Legal challenges and risks of real estate tokenisation

The risks of the SPV structure

The legal challenges that remain are significant and deserve attention. The SPV structure, while legally viable, introduces an additional layer of complexity and risk that must be clearly communicated to investors. Unlike direct ownership — where the investor holds real rights over the property enforceable against third parties — in the current tokenised model, investors hold positions in indirect forms of economic participation (shares, participative loans, credit rights) linked to the company that owns the property. This has important implications for corporate liability, taxation, and insolvency protection.

The disconnect between the on-chain and off-chain worlds

It is also essential to understand that the connection between the “on-chain” world (where tokens circulate) and the “off-chain” world (where property rights are recorded) is neither direct nor automatic. Transferring a token does not in itself alter the Land Registry: ownership of the property remains with the SPV regardless of who holds the tokens, and only a duly notarised and registered deed can change that ownership. The exploratory projects of the Land Registrars aim to improve efficiency in information management but do not alter this fundamental principle. As in any emerging market, it is essential to prevent fraudulent schemes that promise unrealistic returns or market tokens without proper legal backing.

Practical implications for investors and legal practitioners

For legal practitioners, real estate tokenisation may require adapting contracts, corporate bylaws, and financing structures to an environment where rights circulate digitally and in a decentralised manner. For investors, it offers an opportunity to diversify portfolios with smaller capital contributions and greater liquidity potential than traditional real estate investment, provided they understand that they are not acquiring direct ownership of the property but rather a financial position linked to the corporate structure that owns it. And for the wider economy, it could invigorate a real estate market worth trillions of euros by facilitating the entry of retail capital previously excluded from such investments.

The future of real estate tokenisation in Spain

This is an evolution that combines law, technology, and finance in an inseparable way. It is essential to understand that tokenisation is not a passing trend but a tool that, when properly used and regulated, can transform access to one of society’s most valuable assets — property. However, this transformation currently operates through intermediate corporate structures and indirect forms of economic participation, not through direct ownership as commercial language sometimes suggests. It certainly does not imply an immediate revolution of Spain’s land registration system, whose fundamental guarantees remain intact.

It is quite common for business relationships with agents or distributors to last for years without any signed documents. And be careful, because we know that a contract can exist even verbally.

The absence of a written contract will add difficulties in the event of a possible claim, so what you do between the decision to terminate, and the moment of the claim is very important. Remember: ‘anything you write will be used against you’.

The decision to terminate a business relationship is a very delicate moment to which, for some reason, solicitors are not invited. Here are some examples (all real) in which companies or employees with the best of intentions wrote to the agent/distributor. All of them were subsequently very damaging to the company:

Saying ‘We are terminating our business relationship’ when the strategy will be to argue that no such business relationship exists, but rather that there are separate and linked contracts (e.g., supply rather than ongoing distribution contract; very significant compensation consequences).

‘You no longer represent our company’, which may be evidence that you did so before.

‘As of day X, you may no longer act on behalf of our company,’ which would prove that you were previously able to act on its behalf.

‘You may not attend the X trade fair on our behalf.’ A way of confirming that the agent/distributor’s responsibilities included participating in trade fairs and probably accrediting the customers obtained.

‘The sales you promoted have been significantly reduced in year N.’ When there is no written contract or other form of documentation, imputing a breach of an obligation that is not clear can be counterproductive.

Saying ‘You are not actively promoting our products’ and then adding: ‘We urge you to stop promoting the sale of our products’.

‘You are no longer our exclusive representative’, which proves a type of relationship (representation/agent) and a tacit or express agreement (‘exclusivity’).

‘We have appointed another representative in your area’, which shows that the agent/distributor had an assigned area and was “representing”.

‘From this moment on, orders will be handled by X’, which also confirms a type of relationship.

 

In summary: from the moment the company considers terminating a commercial relationship, especially when it is not in writing and before sending any letter, it is advisable to think carefully about the strategy in case of a possible claim. This is the best time to seek advice and avoid surprises. Any communication that is not in line with this strategy designed from the outset can only lead to confusion and problems.

Since the General Data Protection Regulation (GDPR) took effect in 2018, the European Union (EU) has granted adequacy status to only a limited number of jurisdictions — those whose data protection regimes are deemed to provide an “essentially equivalent” level of protection to that of the EU. The current list includes Andorra, Argentina, Canada (under PIPEDA), Faroe Islands, Guernsey, Isle of Man, Israel, Japan, Jersey, New Zealand, South Korea, Switzerland, Uruguay, the United Kingdom, and the United States (limited to companies certified under the Data Privacy Framework).

As of 5 September 2025, Brazil is on the verge of joining this exclusive group. The European Commission has issued a draft adequacy decision concluding that the Brazilian General Data Protection Law (Lei Geral de Proteção de Dados Pessoais – LGPD), in conjunction with Brazil’s broader legal and constitutional framework, offers protections that are essentially equivalent to those found in the GDPR. While Brazil’s rules offer somewhat more flexibility in specific areas of data processing, the foundational principles and safeguards are well-aligned with EU standards.

Once finalized, the adequacy decision will authorize the free flow of personal data from the EU to Brazil without the need for additional contractual clauses or technical safeguards. Such a development is not just regulatory — it also answers a core political argument made by LGPD advocates since its inception: that the absence of a comprehensive data protection framework was undermining Brazil’s international competitiveness by limiting data flows and discouraging investment. For businesses, the EU decision may finally mean the removal of a significant layer of compliance complexity — a development especially welcome by small and medium-sized enterprises engaged in cross-border trade or service provision. The draft is currently under review by the European Data Protection Board (EDPB) and the Member States of the EU.

The Commission’s assessment highlights several key aspects of Brazil’s data protection landscape. It begins by noting that the Brazilian Constitution expressly guarantees the right to privacy and the protection of personal data — a notable distinction among non-EU jurisdictions. These protections are further supported by Brazil’s ratification of the American Convention on Human Rights and its recognition of the jurisdiction of the Inter-American Court of Human Rights, reinforcing a commitment to fundamental rights and democratic oversight.

The LGPD mirrors the GDPR in many critical respects and defines its territorial scope clearly. It applies to: (i) data processing carried out within Brazilian territory, (ii) the offering of goods or services to individuals in Brazil, and (iii) data collected in Brazil, even if subsequently processed abroad. This aligns well with the extraterritorial provisions of the GDPR. The definitions of personal data, sensitive data, controller, and processor are materially similar, as are the key principles governing processing — including lawfulness, purpose limitation, data minimization, accuracy, transparency, and security. The law expressly excludes anonymized data from its scope and establishes specific exemptions for journalistic activities, public security, and scientific research.

Another strength is Brazil’s institutional framework. The National Data Protection Authority (ANPD) was recently transformed into an autonomous regulatory agency, enhancing its independence and technical capacity. The ANPD holds both regulatory and enforcement powers: it can issue binding regulations, impose administrative sanctions, and publish authoritative guidance. To date, it has issued key guidelines on topics such as consent, legitimate interest, the role of the Data Protection Officer (DPO), and security incident reporting. Internationally, the ANPD is an active participant in global data protection dialogue — it is a member of the Global Privacy Assembly and an official observer to the Council of Europe’s Convention 108.

The LGPD’s approach to international data transfers is also structurally aligned with the GDPR. It requires appropriate safeguards such as standard contractual clauses, allows for future adequacy decisions under a regime comparable to Article 45 of the GDPR, and includes detailed provisions for onward transfers and transit data — that is, data merely passing through Brazil without further processing. The rights of data subjects are robust and familiar to European practitioners: access, rectification, erasure, portability, and withdrawal of consent are guaranteed. Lawful bases for processing are also aligned — including consent, legal obligations, contract execution, and legitimate interest. Notably, the LGPD requires a documented balancing test when relying on legitimate interest, bringing additional accountability to this flexible legal basis.

Security incidents involving personal data must be notified to both the ANPD and affected data subjects when there is a significant risk of harm. The standard notification deadline is 72 hours, and the required content aligns closely with Articles 33 and 34 of the GDPR. The ANPD may also order public disclosure of incidents or require remedial measures, depending on the nature and scope of the breach.

Importantly, this process is not one-sided. In parallel to the European Commission’s adequacy decision, the ANPD is conducting its own adequacy assessment of the EU and EEA data protection frameworks. This process is regulated by the Brazilian Resolution CD/ANPD No. 19/2024, which governs international data transfers. Once the technical and legal evaluation is complete, the ANPD’s Board of Directors will issue a formal decision. This reciprocal move reflects Brazil’s commitment to mutual recognition and regulatory symmetry — a positive signal for companies on both sides of the Atlantic.

In conclusion: If confirmed, Brazil’s adequacy status will simplify international operations, reduce compliance costs, and expand opportunities for data-driven business and legal cooperation. For European lawyers advising SMEs with interests in Latin America, this development is a strategic signal: Brazil is emerging not just as a growing market, but as a legally compatible and data-safe jurisdiction for international partnerships.

Remember the USA – EU agreement on 15% tariffs? I wrote that with a negotiator like Trump the game is never over (article here) and—after the recent interlude featuring a threat of 100% tariffs on pharmaceuticals—the U.S. government has announced the imposition of an overall 107% duty on Italian pasta, which could take effect on January 1, 2026.

Where this new duty comes from

The antidumping investigation was launched by the U.S. Department of Commerce at the request of certain competing American companies and is based on a 1996 antidumping order that allows for periodic reviews of imports of Italian pasta. The Department of Commerce conducts these checks annually to assess whether Italian producers are selling pasta at prices lower than the U.S. domestic market, a practice known as “dumping.”

Companies involved in the investigation

The Department of Commerce selected two sample companies for in-depth analysis, defined as “mandatory respondents”: La Molisana and Pastificio Lucio Garofalo. According to the official document published by the U.S. administration, for the period from July 1, 2023 to June 30, 2024, both companies allegedly sold their products below market prices, resulting in the imposition of a duty of 91.74%.

U.S. authorities justified this percentage by claiming the two companies did not provide complete or compliant information as requested by the Department and were therefore insufficiently cooperative during the investigation. What is very important is that, in addition to the two companies directly examined, the additional 91.74% duty is also applied to numerous other Italian producers not individually reviewed. This methodology, while formally permitted under U.S. law as an exception, is being applied without any direct verification of the other companies.

Next steps in the procedure

Italy’s Ministry of Foreign Affairs moved immediately, formally intervening in the proceeding as an “interested party” through the Italian Embassy in Washington. The Foreign Ministry is working in close coordination with the companies concerned and, in concert with the European Commission, to persuade the U.S. Department to revise the provisional duties.

The two companies involved (La Molisana and Garofalo) can submit documentation to contest the dumping allegations. However, if dumping is confirmed, the Department of Commerce will instruct Customs to apply antidumping duties on goods sold and entered into U.S. commerce.

The preliminary nature of this determination means there is still room to change the decision before it becomes final.

Possible effective date

The new super-duty of 91.74%, which will be added to the existing 15% tariff for a total of 107%, is scheduled to take effect on January 1, 2026. This date therefore represents a crucial deadline for all ongoing diplomatic and legal actions.

If confirmed, the economic impact would be significant: in 2024, Italian pasta exports to the United States reached a value of €671 million according to Coldiretti, accounting for nearly 17% of the sector’s total exports. A 107% duty would risk seriously undermining competitiveness in one of the most important markets for Italian agri-food products.

 What to do between now and January 1, 2026?

At this stage, the entry into force of the new duty depends on the outcome of the ongoing procedure: given what has happened in recent months, and the political use the U.S. administration has made of tariffs—well beyond their technical function—it is reasonable to be pessimistic.

So, what to do? In recent months we have seen companies react to the uncertainty over the fate of the tariffs in three ways:

  • Some rushed to ship as many products as possible before the potential effective date of the duty;
  • Some granted—upfront—discounts equivalent to the threatened duty, in case it came into force;
  • Some suspended orders, pending definitive news on the impact of the duties.

These are all  valid options, but other effective tools for managing the uncertainty caused by the flurry of announcements, negotiations, and threats from the U.S. administration should not be forgotten: the risk of new duties being introduced, or existing ones being increased, can be managed in the contract by agreeing with the U.S. importer how any tariff change will affect the product.

The parties can stipulate, for example, that the increase will be split equally; or that the importer will bear it beyond a certain threshold; or that if the duty exceeds a certain level, the contracts may be terminated. You can find a deeper dive in this article.

The only certainty is that trade relations with the U.S. will stay unpredictable for a long time, and it’s vital to carefully manage the risk factors involved in selling products there. Right now, the focus is on tariffs and prices, and I encourage you to take this chance to thoroughly review existing agreements and assess whether—and how—other important points are addressed that could entail significant liabilities: we discuss them, very practically, in this book.

A dedicated notary account in Brazil is a legal mechanism that brings greater security, transparency, and reliability to financial transactions. Regulated under Law 8.935/1994 and Provision No. 197/2025, this service allows notaries to receive, manage, and release funds only after contractual conditions have been fulfilled. By ensuring segregation of assets, traceability, and impartial oversight, dedicated notary accounts provide an effective escrow-like solution for real estate deals, mergers and acquisitions, import/export operations, high-value asset purchases, and complex commercial contracts. This tool not only reduces legal risks and potential disputes but also strengthens trust between parties by guaranteeing that payments are safeguarded until obligations are met.

The legal basis can be found in Law 8.935/1994, § 1 of art. 7-A, which allows notaries to receive, deposit, and manage amounts related to legal transactions, with transactions subject to objectively verifiable facts/conditions. Provision No. 197, dated June 13, 2025, regulates, at the national level, the service of notarial accounts linked to Notary Public Offices.

Practical applications: among others, in the following transactions:

  • Real estate: guarantee that the down payment and settlement amounts will be secured in a specific account. This mitigates the risk of misappropriation of funds and ensures that the money will be released only after all contractual conditions have been met.
  • M&A: the linked notarial account creates a standardized escrow mechanism for the payment of price/holdbacks/earn-outs and conditional obligations.
  • Purchase and Sale of High-Value Movable Property: the linked account can be used to guarantee payment. The buyer deposits the amount and the seller knows that the money is safe, being released only after the transfer of ownership and delivery of the goods.
  • Import and Export: the transaction amount can be deposited with the notary and released to the exporter only after confirmation of delivery of the goods in the destination country, for example.
  • Guarantee of Obligations: In any contract that provides for the payment of a sum of money as a guarantee, the notary account can be used to provide greater security to the parties.
  • Supply, EPC/turnkey, and construction contracts: performance retentions, milestone acceptance (commissioning, as-built, issuance of ART/CREA), and payment against formal acceptance.
  • Contractual joint ventures and commercial partnerships: advances conditional on licenses, authorizations, or competitive approval, where applicable.

Reduction of Legal Risks: The use of linked accounts reduces the chances of litigation related to lack of clarity about the origin and destination of funds. Companies can clearly demonstrate that payments were made and held by an impartial and secure institution.

Operational structure: limited to banking entities affiliated with the CNB, which must ensure the segregation of assets, traceability through audit trails, and proof of all transactions. The authorization of the delegate requires prior accreditation and electronic registration of the essential details of the transaction and its conditions in the CNB system, with access restricted to the parties and the notary.

Specific Purpose: amounts received as payment, guarantee, or advance payment as a result of notarial acts must be deposited in a bank account linked to the specific act and may only be moved for the purpose for which they are intended.

Transparency and Traceability: With the linked notarial account, it is possible to clearly track the financial flow of each transaction, which increases transparency for all parties and for supervisory bodies.

Verification of conditions and release. Once the objective conditions have been met, the notary authorizes the transfer to the recipients and files the proof of verification. In the event of a dispute between the parties, the notary suspends any movement, draws up a notarial deed, and advises on a consensual or judicial solution, without deciding on the effectiveness/termination of the transaction; if the transaction is frustrated and no solution is found, the procedure is terminated and the amounts are returned to the depositor, in accordance with the agreed clauses.

Confidentiality and access. In transactions with a confidentiality clause, the notary public maintains confidentiality and does not issue certificates regarding the content of the transaction; documents are accessible only for correctional purposes or by court order.

Remuneration and costs. The notary’s remuneration for the notarial account service is paid by the financial institution under the terms of the agreement, and the transfer of additional costs to the user is prohibited, without prejudice to fees for any related notarial acts.

Article 442-1.II of the French Commercial Code (former Article L. 442-6.I.5 °) sanctions the termination by a trader of a written contract or an informal business relationship without giving sufficient written prior notice. Over the last twenty years, this article became the recurring legal basis for all compensation actions (up to 18 months of gross margin, plus other damages) when a commercial relationship or a contract ends (totally or even partially).

Therefore, a foreign trader who contracts with a French company should try not to fall under the aegis of this rule (part I) and, if it cannot, should understand and control its implementation (part II).

In a nutshell:

How can a foreign company avoid or control the risk linked to the “sudden termination of commercial relations” set by French law? Foreign companies doing business with a French counterpart should:

  • enter, as soon as possible, into a written (frame) agreement with their French suppliers or customers, even for a very simple relation and;
  • stipulate a clause in favour of foreign court or arbitration and foreign applicable law while, failing to choose it, they would rather be subject to French courts and laws;

How can a foreign company master the risk linked to the “sudden termination of commercial relations” set by French law? Foreign companies doing business with a French counterpart should:

  • know that this article applies to almost all type of commercial relationship or contracts, whether written or not, fixed-term or not;
  • check whether its relation/contract is sufficiently long, regular and significant and whether the other party has a legitimate belief in the continuation of this relation/contract;
  • give a written notice of termination or non-renewal (or even of a major modification), which length takes mainly into account the duration of the relation, irrespectively of the length of the contractual notice;
  • invoke, with cautiousness, force majeure and gross negligence of the party, to set aside “sudden termination”;
  • anticipate, in case of insufficient notice, a compensation which amount is the product of the average monthly gross margin per the length of non-granted prior notice.

How to avoid the application of the French “Sudden Termination” rule?

In international matters, a foreign company must anticipate whether its relationship will be subject or not to French law before terminating a contract or a business relationship and, in case of dispute, whether it will be brought before a French court or not.

What will be the law applicable to “Sudden Termination”?

It is quite difficult for a foreign company to correctly grasp the French legal framework of conflict of laws rules applicable to “sudden termination”. In a ruling of September 19, 2018 (RG 16/05579, DES/ Clarins), the Court of appeal of Paris made, by an implicit reference to the Granarolo EU ruling (07 14 16, N°C196/15) an extension of the contractual qualification to most of the business relationships which will improve foreseeability in order for a foreign company to try to exclude French law and its “sudden termination” rule.

Sudden termination of a written contract or of a “tacit contractual relationship”

According to Rome I Regulation (EC No 593/2008, June 17 2008) on the law applicable to contracts:

– In case of choice of a foreign law by the parties: The clause selecting a foreign applicable law will be valid and respected by French judges (subject to OMR, see below), provided that the choice of law by the parties is express or certain.

– In case of no choice by the parties: French law will likely to be declared applicable as it might be either the law of the country where is based the distributor/franchisee, etc. or the law of the country where the party who is to provide the service features of the contract has its domicile.

Sudden termination of a “non-tacit contractual relationship”

In case of informal relationship (i.e. orders placed from time to time), French judges would retain the tort qualification and will refer to the Rome II Regulation (No 864/2007, July 11 2007) on the law applicable to non-contractual obligations..

– In case of choice of a foreign law by the parties: a properly drafted choice of foreign law clause should be implemented by a French judge, provided that it expressly includes tort cases.

– In case of no choice of law by the parties: French law will likely to be declared applicable as it might be the law of the country where the damage occurs (regardless of the place of the causing event or that of the indirect consequences), which is the place of the head office where the French victim suffers the consequences of the termination.

“Sudden Termination” rule, a French Overriding Mandatory Rule?

The position of French courts is quite vague and unsatisfactory, and this has been the case for a long time. To make it short: the Commercial Court of Paris judges that “sudden termination” is not an OMR, the Court of appeal of Paris (sole French appellate court in charge of “sudden termination” cases) is also not in favour of the OMR qualification on the grounds that the text “protects purely private economic interests” (CA Paris, pôle 5, ch. 5, Feb 28. 2019, n° 17/16475 / CA Paris, pôle 5, ch. 5, Oct 8. 2020, n°17/19893). Recently, the Paris Court of Appeal reaffirmed that the rules on sudden termination of established commercial relations are not an OMR (Court of appeal Paris, March 11, 2021, n° 18/03112).

The French Supreme Court has never explicitly addressed the issue (OMR or not OMR). Indeed, the French Supreme Court ruled in the Expedia case (Cass. com., July 8, 2020, n°17-31.536) that the provisions of the former article L. 442-6, I, 2º and II, d), about “significant imbalance” (which is in the same set of rules than “Sudden termination”) are OMR. However, this qualification should be limited to the specific action brought by the Ministry of Finance and not be applicable to an action by a private party. Moreover, some courts may be tempted to invoke the provisions of French law n°2023-221 (March 30, 2023, aka Egalim III) to qualify Sudden termination rule as an OMR, however this text (article L 444-1.A Commercial code) does not quote expressly OMR and set no justification whatsoever to set such a qualification.

Consequently, if a claim for “sudden termination” is brought to a French court, there is still a  risk that the latter would exclude the applicable foreign law and replace it with the regime resulting from the “sudden termination” of Article L 442-1. II. However, to avoid this risk, a foreign company would better not only choose a foreign governing law but also stipulate that the dispute will be brought before a foreign judge or an arbitral tribunal.

How to avoid jurisdiction of French court over a “Sudden Termination” claim?

“Sudden Termination” claim and intra EU co-contractor

The ECJ ruling (Granarolo, July 14, 2016, N°C196/15) created a distinction between claims occurring from:

– written framework contract or tacit contractual relationship (existing only if the body of evidences listed by the ECJ are identified by national judges, i.e. length of relation and commitments recognized to each other, such as exclusivity, special price or terms of delivery or payment, non-competition, etc.): such claim has a contractual nature according to conflict of jurisdiction rules under Brussels I recast Regulation;

– informal relationship which is a non–tacit contractual relationship (i.e. orders placed from time to time): such a request has a tort nature under Brussels I recast ;

To be noted: the so-called Egalim III law has no impact on the EU rules on jurisdiction clauses.

(a) Who is the Judge of the “sudden termination” of a written contract or of a “tacit contractual relationship”?

– Jurisdiction clause for the benefit of a foreign court will be enforced by French courts, even though it is an asymmetrical clause (Court of cassation, October 7, 2015, Ebizcuss.com / Apple Sales International).

– In case of lack of choice of court clause, French courts are likely to have jurisdiction if the French claimant bringing a case based on “sudden termination» is the service provider, such as distributor, agent, etc. (see ECJ Corman Collins case, 19 12 13, C-9/12, and article 7.1.b.2 of Brussels I recast°).

(b) Who is the Judge of the “sudden termination” of a “non- tacit contractual relationship”?

– We believe that French courts may continue to give effect to a jurisdiction clause in tort case, especially when it expressly encompasses tort litigation (Court of cassation, 1° Ch. Civ., January 18, 2017, n° 15-26105, Riviera Motors / Aston Martin Lagonda Ltd).

– In case of lack of choice of court clause, French courts will have jurisdiction over a “sudden termination” claim as the judge of the place where the harmful event occurred (art. 7.3 of Brussels I recast), which is the place where the sudden termination has effect…i.e. in France if the French company is the victim.

“Sudden Termination” claim and Non-EU co-contractor

The Granarolo solution will not ipso facto apply if a French victim brings a claim to French courts, based on a “sudden termination” made by a non-EU company. In non-EU relations, French judges could continue to retain only the tort qualification. In such a case, French courts may keep their jurisdiction based on the place where the harmful event occurs.

Jurisdiction clause to a foreign court may be recognized in France (even for tort-based claims), provided that this jurisdiction clause is valid according to either a bilateral international convention or to the Hague Convention of 30 June 2005 on choice of court agreements. Otherwise, according to Egalim III law, imperative jurisdiction might be attributable to French courts.

“Sudden Termination” claim and arbitration

Stipulating an ad hoc or institutional arbitration clause is probably the safest solution to avoid the jurisdiction of French courts. Ideally, the clause will fix the seat of the arbitral tribunal outside France. According to the principle of competence-competence of the arbitrators, French courts declare themselves incompetent, unless the arbitration clause is manifestly void or manifestly inapplicable, regardless of contract or tort ground (see, in particular, Paris Court of Appeal, 5 September 2019, n°17/03703). The so-called “Egalim III” law has no impact on arbitration clauses.

Conclusion: Foreign companies should not leave open the Jurisdiction and governing Law issues. They must negotiate a safe harbour, otherwise a French victim of a termination will likely to be entitled to bring a “sudden termination” claim in front of French judges (see what happen below in Part 2)

How to master the “Sudden Termination” French rules?

When French law is applicable, the foreign company will face the legal regime of article L442 -1.II of the French Commercial Code sanctioning “sudden termination”. As a preliminary remark, it is important to know, above all, that the implementation of the liability for “sudden termination” is the consequence of the lack of a notice or a too short notice. Thus, this scheme does not lay down an automatic compensation rule. In other words, as soon as reasonable notice is given by the author of the termination, liability on that basis can be dismissed.

The prerequisite for “Sudden Termination”: an established commercial relationship

All contracts are covered by this legal regime, except for contracts whose regulations provide for a specific notice of termination, like commercial agency contracts and transport of goods by road subcontracts.

First, there must be a relationship that can be proven by a written contract or de facto, by behaviour of the parties. Article L.442-1 II of the French Commercial Code covers all “commercial” relationships and not only “contractual ones so that such relationship may be based on a succession of tacitly renewed contracts or a regular flow of business, materialized by multiple orders. This was recently recalled by the Supreme Court (Supreme Court, February 16, 2022, n° 20-18.844)

Second, this relationship must have an established character. There is no legal definition, but this notion has been defined year after year by case law which has established an objective criterion and a more subjective one.

(a) The objective criterion implies a sufficiently long, regular and significant relationship between the two parties. The duration of the relationship is the most important criterion. The relationship must also be regular, that is, it must not have been interrupted (too often or too long). The relationship must ultimately be meaningful and represent a serious flow of business between the parties, in volume or value.

(b) The subjective test focuses primarily on the legitimate belief of the victim of the rupture in the continuation of the contract / the relationship that is based on factual elements, such as investment requests, budgets over several years, etc. Conversely, it is on the basis of the finding of a lack of legitimate belief in a common future that the terminating party can prove the absence of a stable character when he has resorted, on several occasions, a call for tenders (unless it is a trick).

Anticipating a “Sudden Termination” claim

(a) The termination may be total or partial

The total rupture is materialized by a complete stop of the relations, for example ending the contract, stopping the sending of orders by the purchaser or the recording of orders by the supplier.

The Supreme Court recently recalled that a significant drop in sales with a partner must be considered as a partial rupture of the relationship (February 16, 2022, n° 20-18.844, cited above). But the most complicated situation to deal with is the so-called partial rupture that will be deduced from a modification of elements that partly impacts the relationship but does not reduce it to nothing (ex.: a price increase or decrease, a change in the terms of payment or delivery).

(b) The termination must be subject to a reasonable written prior notice

The notice must be notified in writing. The absence of written notice is already a breach in itself. The notification must clearly reflect the willingness of a party to sever the relationship in whole or in part, which must be clearly identified. The notification must also clearly identify the date on which the relationship will end.

Thus, an ambiguity on the notice period (e.g if the termination of an agreement is notified, whilst offering to maintain certain prices and payment terms, in the meantime) is considered as an insufficient termination notice (French Supreme Court, January 29, 2013, n° 11-23.676).

Parties must distinguish between the letter of formal notice for default and the subsequent notification of the breach, giving notice (if applicable). During the period of notice, parties must fully comply with all contractual conditions.

This principle also applies to distribution contracts subject to specific French rules imposing annual or multi-year negotiation obligations. In fact, the Court of cassation has ruled that “when the conditions of the commercial relationship established between the parties are subject to annual negotiation, modifications made during the notice period which are not so substantial as to undermine its effectiveness do not constitute a brutal breach of that relationship” (Cass. com., Dec. 7, 2022, n° 19-22.538).

However, it’s not necessary to mention the reasons why the commercial relationship is terminated is not a fault or breach of the relationship. In fact, French courts consider that “the fact that the given reason to terminate was false does not in any way present the terminating party from terminating the commercial relationship” (Versailles Court of Appeal, June 10, 1999).

The duration of the prior notice to be respected is not defined by French law which did not pose precise rule until the reform 2019. If several criteria are stated by case law, it should be noted that the most important criterion is the duration of the relationship. Judges also take into account the share of turnover achieved by the victim, the existence or not of a territorial exclusivity, the nature of the products and the sector of activity, the importance of the investments made by the victim especially to the relationship in question, and finally the state of economic dependence. Economic dependence is defined as the impossibility for a company to have a solution that is technically and economically equivalent to the contractual relations it has established with another company. Case law considers this to be an aggravating factor justifying a longer termination notice.

The minimum notice period must be notified at the time of notification of termination. As a consequence, events that affect the victim after the notification, both positively (conclusion of a new contract) and negatively (loss of another custome), will not be taken into account by the judge, at the time of ruling, when assessing the “brutality” of the termination.

The length of the notice given by the judges is very variable. The appreciation of notice is made on a case-by-case basis. It is very difficult to give a golden rule, even though roughly for each year of relationship, a month’s notice might be due (to modulate up or down depending on the other criteria in the relationship). But way of illustration, however, the following case law may be cited:

  • Paris Court of Appeal , Feb.9, 2022: 16-year relationship with 15 months’ notice;
  • Paris Court of Appeal, Jan.20, 2022: 12-year relationship with 8 months’ notice;
  • Paris Court of Appeal, Oct. 25, 2022: 16-year relationship with 18 months’ notice;
  • Paris Court of Appeal , Feb. 23, 2022: 17-year relationship with 11 months’ notice;
  • Paris Court of Appeal, Sept. 21, 2022: 5-year relationship with 14 months’ notice.

Since the Order of April 24, 2019, which limits the length of reasonable notice to a maximum of 18 months, if the notice period granted by a party is 18 months, it cannot be held liable for a sudden termination. However, much of the litigation remains uncertain, as only exceptionally long or particularly sensitive relationships led, prior to 019, to the award of more than 18 months’ notice. Ordinance of April 24, 2019, limits to 18 months the maximum period of notice reasonably due under Article L 442-1.II. But much of the litigation will remain uncertain since only relations of exceptional longevity or particularly sensitive, could have led to the allocation of a notice higher than 18 months.

Judges are not bound by the contractual notices stipulated in the contract. But if the author of the breach also violated the terms and conditions of termination provided for by contract, the victim may seek the responsibility of the author both on the tort basis of the sudden rupture and also on the basis of the breach of a contractual obligation.

Cases in which “Sudden Termination” is ruled out

The legal regime provides for two cases, and the case-law seems to have imposed others.

(a) The two legal exceptions are Force majeure (very rarely consecrated by the courts) and the fault of the victim of the termination, case-law having added that it must be a serious violation (“faute grave”) of a contractual commitment or a legal provision (such as non-respect of an exclusivity, a non-compete, a confidentiality or a change of control duty, or non-payment of amounts due contractually).

The judges consider themselves, of course, not bound by a termination clause defining what constitutes serious misconduct. In any case the party who terminates for serious misconduct must clearly notify it in its letter of termination. Above all, serious misconduct leads to a lack of notice, therefore, if the terminating party alleges serious misconduct but grants notice, whichever it may be, judges may conclude that the fault was not serious enough.

Thus, the seriousness of the misconduct must be motivated by judges in their rulings. Noting that the contract was breached after two formal notices is not sufficient (Cass. com., Feb 16. 2022, n° 20-18.844).

However, the Court of Cassation considers that “even in the case of serious misconduct justifying the immediate termination of the commercial relationship, the other party remains free to give the other party a notice” (Cass. Com., Oct. 14 2020, n°18-22.119).

(b) In recent years, case-law has added other cases of liability waiver. This is the case when the rupture is the consequence of a cause external to the author of the rupture, such as the economic crisis, the loss of its own customers or suppliers, upstream or downstream.

For example, in 2021 the Court of cassation has ruled that “the business partner is not entitled to an unchanged relationship and cannot refuse any adaptation required by economic changes” (Com, Dec 01, 2021, n°20-19.113). In fact, to be attributable to an economic player, a termination must be free and deliberate. This is not the case if termination is imposed by the economic situation.

However, adding a liability exemption clause in a contract, aimed at waiving destinated to escape the penalties of article L. 442-1, is without consequences on the judge’s appreciation.

Judges have also excluded “sudden termination” in the hypothesis of the end of the first period of a fixed-term contract, whatever its duration is: the first renewal of a contract, constitutes a foreseeable event for the victim of the rupture, which excludes the very notion of brutality; but once the contract has been renewed at least once, judges can subsequently characterize the victim’s legitimate belief in a new tacit renewal.

Compensation for “Sudden Termination”

Judges only compensate for the detrimental consequences of the brutality itself of the breach but do not compensate, at least in the context of article L442 -1.II, for the consequences of the breach itself.

The basic rule is very simple: it is necessary to determine the length of the notice which should have been granted, from which the notice actually granted is deducted. This net notice is multiplied by the average monthly gross margin of the victim, or more often the so called margin on variable costs (i.e. the turnover minus costs disappearing with non-performance of the contract/relation). Defendant should not hesitate to ask for the full accountancy evidences, especially to identify (lower) margin rates, or even for a judicial expertise on those accounting elements. In general, the base of the average monthly margin consists of the last 24 or 36 months.

The compensation calculated on the average margin is, in general, exclusive of any other compensation. However, the victim can prove that it has suffered other losses as a consequence of the brutality of the rupture. Such as dismissals directly caused by this brutality or the depreciation of investments made recently by the victim.

Some practical tips when considering to anticipate “Sudden Termination”

Even though the legal regime is still ambiguous and the case-law terribly casuistic which prevents to release strong guidelines, here are some practical tips when a company plans to terminate a relationship / contract:

  • in the case of a fixed-term contract renewable tacitly, the notification of non-renewal must be anticipated well in advance of the beginning of the contractual notice in order to avoid being in a situation where it is necessary to choose between not renewing the contract with a notice that is not sufficient or agree to see the contract renewed itself for a new term;
  • commercial teams must be made aware of the risk of partial sudden termination when they change the conditions of execution of a commercial relationship / contract too radically;
  • in some cases, it may be useful to send a pre-notice of termination with a “notice proposal” in order to try to validate this notice with the other party;
  • it may also be useful, in certain relationships, to notify the end of the relationship with different lengths of notice depending on the nature of the product lines;
  • Finally, the best way is to conclude an end-of-relation protocol, fixing the duration of the notice as well as, if necessary, the progressive decline of the orders, the whole within the framework of a settlement agreement which definitively waives any claim, including “sudden termination”.

Sudden termination regime shall be taken into consideration when entering into the final phase of a duration relationship: the way in which the contract (or de facto relationship) is terminated must be carefully planned, in order to manage the risk of causing damages to the counterparty and being sued for compensation.

Given the significance of the influencer market (over €21 billion in 2023), which now encompasses all sectors, and with a view for transparency and consumer protection, France, with the law of June 9, 2023, proposed the world’s first regulation governing the activities of influencers, with the objective of defining and regulating influencer activities on social media platforms.

However, influencers are subject to multiple obligations stemming from various sources, necessitating the utmost vigilance, both in drafting influence agreements (between influencers and agencies or between influencers and advertisers) and in the behaviour they must adopt on social media or online platforms. This vigilance is particularly heightened as existing regulations do not cover the core of influencers’ activities, especially their status and remuneration, which remain subject to legal ambiguity, posing risks to advertisers as regulatory authorities’ scrutiny intensifies.

 

Key points to remember 

  • Influencers’ activity is subject to numerous regulations, including the law of June 9, 2023.
  • This law not only regulates the drafting of influence contracts but also the influencer’s behaviour to ensure greater transparency for consumers.
  • Every influencer whose audience includes French users is affected by the provisions of the law of June 9, 2023, even if they are not physically present in French territory.
  • Both the law of June 9, 2023, and the “Digital Services Act,” as well as the proposed law on “fast fashion,” foresee increasing accountability for various actors in the commercial influence sector, particularly influencers and online platforms.
  • Despite a plethora of regulations, the status and remuneration of influencers remain unaddressed issues that require special attention from advertisers engaging with influencers.

 

The law of June 9, 2023, regulating influencer activity  

The definition of influencer professions

The law of June 9, 2023, provides two essential definitions for influencer activities:

  • Influencers are defined as ‘natural or legal persons who, for consideration, mobilize their notoriety with their audience to communicate to the public, electronically, content aimed at promoting, directly or indirectly, goods, services, or any cause, engaging in commercial influence activities electronically.’
  • The activity of an influencer agent is defined as ‘that which consists of representing, for consideration,’ the influencer or a possible agent ‘with the aim of promoting, for consideration, goods, services, or any cause‘ (article 7) The influencer agent must take ‘necessary measures to ensure the defense of the interests of the persons they represent, to avoid situations of conflict of interest, and to ensure the compliance of their activity‘ with the law of June 9, 2023.

 

The obligations imposed on commercial messages created by the influencer

The law sets forth obligations that influencers must adhere to regarding their publications: 

  • Mandatory particulars: When creating content, this law imposes an obligation on influencers to provide information to consumers, aiming for transparency towards their audience. Thus, influencers are required to clearly, legibly, and identifiably indicate on the influencer’s image or video, regardless of its format and throughout the entire viewing duration (according to modalities to be defined by decree):

    – The mention “advertisement” or “commercial collaboration.” Violating this obligation constitutes deceptive commercial practice punishable by two years’ imprisonment and a fine of €300,000 (Article 5 of the law of June 9, 2023).
    – The mention of “altered images” (modification by image processing methods aimed at refining or thickening the silhouette or modifying the appearance of the face) or “virtual images” (images created by artificial intelligence). Failure to do so may result in a one-year prison sentence and a fine of €4,500 (Article 5 of the law of June 9, 2023).

  • Prohibited or regulated promotions: This law reminds certain prohibitions, subject to criminal and administrative sanctions, stemming from French law on the direct or indirect promotion of certain categories of products and services, under penalty of criminal or administrative sanctions. This includes the promotion of products and services related to:

    – health: surgery, aesthetic medicine, therapeutic prescriptions, and nicotine products;
    – non-domestic animals, unless it concerns an establishment authorized to hold them;
    – financial: contracts, financial products, and services;
    – sports-related: subscriptions to sports advice or predictions;
    – crypto assets: if not from registered actors or have not received approval from the AMF;
    – gambling: their promotion prohibited for those under 18 years old and regulated by law;
    – professional training: their promotion is not prohibited but regulated.

 

The accountability of influencer behaviour

The law also holds influencers accountable from the contracting of their relationships and when they act as sellers:

  • Regulation of commercial influence agreements: This law imposes, subject to nullity, from a certain threshold of influencer remuneration (defined by decree), the formalization in writing of the agreement between the advertiser and the influencer, but also, if applicable, between the influencer’s agent, and the mandatory stipulation of certain clauses (remuneration, mission description, etc.).
  • Influencer responsibility as a cyber seller: Influencers engaging in drop shipping (selling products without handling their delivery, done by the supplier) must provide the buyer with all information in French as required by Article L. 221-5 of the Consumer Code about the product, such as its availability and legality (i.e., guarantee that the product is not counterfeit), applicable product warranty, and supplier identity. Additionally, influencers must ensure the proper delivery and receipt of products and, in case of default, compensate the buyer. Influencers are also logically subject to obligations regarding deceptive commercial practices (for more information, the DGCCRF website explain the dropshipping).

 

The accountability of other actors in the commercial influence ecosystem

 

Joint and several liability is set by law, for the advertiser, influencer, or influencer’s agent for damages caused to third parties in the execution of the commercial influence contract, allowing the victim of the damage to act against the most solvent party.

Furthermore, the law introduces accountability for online platforms by partially incorporating the European Regulation 2022/2065 on digital services (known as the “DSA“) of October 19, 2022.

 

French regulation and international influencers

 

Influencers established outside the European Union (including also Switzerland and the EEA) who promote products or services to a French audience must obtain professional liability insurance from an insurer established within the EU. They must also designate a legal or natural person providing “a form of representation” (SIC) within the EU. This representative (whose regime is not very clear) is remunerated to represent the influencer before administrative and judicial authorities and to ensure the compliance of the influencer’s activity with law of June 9, 2023.

Furthermore, according to law of June 9, 2023, when the contract binding the influencer (or their agency) aims to implement a commercial influence activity electronically “targeting in particular an audience established in French territory” (SIC), this contract should be exclusively subject to French law (including the Consumer Code, the Intellectual Property Code, and the law of June 9, 2023). According to this law, the absence of such a stipulation would be sanctioned by the nullity of the contract. Law of June 9, 2023, seems to be established as an overriding mandatory law capable of setting aside the choice of a foreign law.

However, the legitimacy (what about compliance with the definition of overriding mandatory rules established by Regulation Rome I?) and effectiveness (what if the contract specifies a foreign law and a foreign jurisdiction?) of such a legal provision can be questioned, notably due to its vague and general wording. In fact, it should be the activity deployed by the “foreign” influencer to their community in France that should be apprehended by French overriding mandatory rules, rather than the content of the agreement concluded with the advertiser (which itself could also be foreign, by the way).

 

The other regulations governing the activity of influencers

 

The European regulations

The DSA further holds influencers accountable because, in addition to the reporting mechanism imposed on platforms to report illicit content (thus identifying a failing influencer), platforms must ensure (and will therefore shift this responsibility to the influencer) the identification of commercial communications and specific transparency obligations towards consumers.

The «soft law»

As early as 2015, the Advertising Regulatory Authority (“ARPP”) issued recommendations on best practices for digital advertising. Similarly, in March 2023, the French Ministry of Economy published a “code of conduct” for influencers and content creators. In 2023, the European Commission launched a legal information platform for influencers. Although non-binding, these rules, in addition to existing regulations, serve as guidelines for both influencers and content creators, as well as for judicial and administrative authorities.

 

The special status of child influencers

The law of October 19, 2020, aimed at regulating the commercial exploitation of children’s images on online platforms, notably opens up the possibility for child influencers to be recognized as salaried workers. However, this law only targeted video-sharing platforms. Article 2 of the law of June 9, 2023, extended the provisions regarding child influencer labor introduced by the 2020 law to all online platforms. Finally, a recent law aimed at ensuring respect for the image rights of children was published on February 19, 2024, introducing a principle of joint and several responsibility of both parents in protecting the minor’s image rights.

 

The status and remuneration of influencers: uncertainty persists

 

Despite the diversity of regulations applicable to influencers, none address their status and remuneration.

The status of the influencer

In the absence of regulations governing the status of influencers, a legal ambiguity persists regarding whether the influencer should be considered an independent contractor, an employee (as is partly the case for models or artists), or even as a brand representative (i.e. commercial agent), depending on the missions contractually entrusted to the influencer.

The nature of the contract and the applicable social security regime stem from the missions assigned to the influencer:

  • In the case of an employment contract, the influencer will fall under the general regime for employees and assimilated persons, based on Articles L. 311-2 or 311-3 of the French Social Security Code.
  • In the case of a service contract, the influencer will fall under the regime for self-employed workers.

 

The existence of a relationship of subordination between the advertiser and the influencer typically determines the qualification of an employment contract. Subordination is generally characterized when the employer gives orders and directives, has the power to control and sanction, and the influencer follows these directives. However, some activities are subject to a presumption of an employment contract; this is the case (at least in part) for artist contracts under Article L. 7121-3 of the French Labor Code and model contracts under Article L. 7123-2 of the French Labor Code.

 

The remuneration of the influencer

The influencer can be remunerated in cash (fixed or proportional) and/or in kind (for example: receiving a product from the brand, invitations to private or public events, coverage of travel expenses, etc.). The influencer’s remuneration must be specified in the influencer agreement and is directly impacted by the influencer’s status, as certain obligations (minimum wage, payment of social security contributions, etc.) apply in the case of an employment contract.

Furthermore, the remuneration (for the influencer’s services) must be distinguished from that of the transfer of their copyrights or image rights, which are subject to separate remuneration in exchange for the IP rights transferred.

 

The influencers… in the spotlight

The law of June 9, 2023, grants the French authority (i.e. the Consumer Affairs, Competition and Fraud Prevention Agency, “DGCCRF”) new injunction powers (with reinforced penalties). This comes in addition to the recent creation of a “commercial influence squad“, within the DGCCRF, tasked with monitoring social networks, and responding to reports received through Signal Conso. The law provides for fines and the possibility of blocking content.

As early as August 2023, the DGCCRF issued warnings to several influencers to comply with the new regulations on commercial influence and imposed on them the obligation to publicly disclose their conviction for non-compliance with the new provisions regarding transparency to consumers on their own social networks, a heavy penalty for actors whose activity relies on their popularity (DGCCRF investigation on the commercial practices of influencers).

On February 14, 2024, the European Commission and the national consumer protection authorities of 22 EU member states, Norway, and Iceland published the results of an analysis conducted on 570 influencers (the so-called “clean-up operation” of 2023 on influencers): only one in five influencers consistently presented their commercial content as advertising. 

In response to environmental, ethical, and quality concerns related to “fast fashion,” a draft law aiming to ban advertising for fast fashion brands, including advertising done by influencers (Proposal for a law aiming to reduce the environmental impact of the textile industry), was adopted by the National Assembly on first reading on March 14, 2024.

Lastly, the law of June 9, 2023, has been criticized by the European Commission, which considers that the law would contravene certain principles provided by EU law, notably the principle of “country of origin,” according to which the company providing a service in other EU countries is exclusively subject to the law of its country of establishment (principle initially provided for by the E-commerce Directive of June 8, 2000, and included in the DSA). Some of its provisions, particularly those concerning the application of French law to foreign influencers, could therefore be subject to forthcoming – and welcome – modifications.

Summary

To avoid disputes with important suppliers, it is advisable to plan purchases over the medium and long term and not operate solely on the basis of orders and order confirmations. Planning makes it possible to agree on the duration of the ‘supply agreement, minimum volumes of products to be delivered and delivery schedules, prices, and the conditions under which prices can be varied over time.
The use of a framework purchase agreement can help avoid future uncertainties and allows various options to be used to manage commodity price fluctuations depending on the type of products , such as automatic price indexing or agreement to renegotiate in the event of commodity fluctuations beyond a certain set tolerance period.

I read in a press release: “These days, the glass industry is sending wine companies new unilateral contract amendments with price changes of 20%…”

What can one do to avoid the imposition of price increases by suppliers? 

  • Know your rights and act in an informed manner
  • Plan and organise your supply chain

Does my supplier have the right to increase prices?

If contracts have already been concluded, e.g., orders have already been confirmed by the supplier, the answer is often no.

It is not legitimate to request a price change. It is much less legitimate to communicate it unilaterally, with the threat of cancelling the order or not delivering the goods if the request is not granted.

What if he tells me it is force majeure?

That’s wrong: increased costs are not a force majeure but rather an unforeseen excessive onerousness, which hardly happens.

What if the supplier canceled the order, unilaterally increased the price, or did not deliver the goods?

He would be in breach of contract and liable to pay damages for violating his contractual obligations.

How can one avoid a tug-of-war with suppliers?

The tools are there. You have to know them and use them.

It is necessary to plan purchases in the medium term, agreeing with suppliers on a schedule in which are set out:

  • the quantities of products to be ordered
  • the delivery terms
  • the durationof the agreement
  • the pricesof the products or raw materials
  • the conditions under which prices can be varied

There is a very effective instrument to do so: a framework purchase agreement.

Using a framework purchase agreement, the parties negotiate the above elements, which will be valid for the agreed period.

Once the agreement is concluded, product orders will follow, governed by the framework agreement, without the need to renegotiate the content of individual deliveries each time.

For an in-depth discussion of this contract, see this article.

  • “Yes, but my suppliers will never sign it!”

Why not? Ask them to explain the reason.

This type of agreement is in the interest of both parties. It allows planning future orders and grants certainty as to whether, when, and how much the parties can change the price.

In contrast, acting without written agreements forces the parties to operate in an environment of uncertainty. Suppliers can request price increases from one day to the next and refuse supply if the changes are not accepted.

How are price changes for future supplies regulated?

Depending on the type of products or services and the raw materials or energy relevant in determining the final price, there are several possibilities.

  • The first option is to index the price automatically. E.g., if the cost of a barrel of Brent oil increases/decreases by 10%, the party concerned is entitled to request a corresponding adjustment of the product’s price in all orders placed as of the following week.
  • An alternative is to provide for a price renegotiation in the event of a fluctuation of the reference commodity. E.g., suppose the LME Aluminium index of the London Stock Exchange increases above a certain threshold. In that case, the interested party may request a price renegotiationfor orders in the period following the increase.

What if the parties do not agree on new prices?

It is possible to terminate the contract or refer the price determination to a third party, who would act as arbitrator and set the new prices for future orders.

Ignacio Alonso

Áreas de prática

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  • Empresa
  • Distribuição
  • Franchising
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    How real estate tokenisation works, what is the regulatory framework, and what rights investors actually acquire?

    Real estate tokenisation, already present in Spain for several years, is no longer a futuristic promise but a tangible reality in the Spanish market. It represents more than just a technological innovation: it signifies a profound transformation in how we understand ownership, investment, and liquidity within the real estate sector — one of the most traditional and tightly regulated areas of our economy.

    What is real estate tokenisation and how does it work?

    In essence, to tokenise a property today means converting the economic rights associated with that asset into digital units that can circulate on blockchain-based platforms. Each token represents a fraction of those economic rights, allowing investors with more modest capital to access a market that has traditionally required substantial investments.

    The role of smart contracts

    Tokens operate through smart contracts that automatically execute the distribution of rental income or resale proceeds of that partial representation of the property, including any potential difference in value, eliminating intermediaries and providing transparency to the process. This automation is not merely cosmetic: it reduces operational costs, speeds up transactions, and potentially increases the liquidity of assets that have historically been among the least liquid in the market.

    The legal reality: what is actually tokenised in Spain

    It is essential to clarify from the outset a key point often blurred by marketing discourse: in practice, real estate tokenisation projects in Spain do not tokenise the property itself but rather the economic rights linked to a corporate vehicle (usually a special purpose vehicle, or SPV) that owns the property. Spanish law only allows the tokenisation of shares in joint-stock companies (sociedades anónimas) using distributed ledger technology; shares in limited liability companies (sociedades limitadas) cannot be tokenised. This means that if the SPV is a limited liability company, its shares cannot be directly tokenised — only other instruments such as participative loans or credit rights over income streams can be represented as tokens. Only if the SPV is incorporated as a joint-stock company is it legally possible to tokenise its shares.

    What rights does a real estate token investor actually acquire?

    An investor who acquires a token does not become a direct co-owner of the property. Depending on the structure chosen, they may become a shareholder in a tokenised joint-stock company that owns the property or a holder of economic rights derived from participative loans or other indirect forms of economic participation issued by the SPV that owns the asset. The distinction is crucial: if the company faces solvency issues or bankruptcy, the value of the token collapses with it, and the investor cannot exercise any direct real rights over the property.

    Spanish law, rooted in centuries of land registry tradition, does not currently allow the transfer of real property rights through the mere transfer of tokens; a public deed and registration are required for the transfer to be effective against third parties. The SPV structure is therefore a compromise between technological possibilities and the demands of the current legal framework.

    Regulatory framework for real estate tokenisation in Spain

    CNMV authorisation and the 2023 Securities Market Law

    The Spanish regulator has begun to establish a legal foundation for this technology to develop within a secure framework. In 2023, the Spanish National Securities Market Commission (CNMV) authorised Adventurees Capital PFP as the first crowdfunding platform to issue tokenised securities — a milestone in the convergence of crowdfunding and blockchain. This authorisation was accompanied by the approval of Law 6/2023 on the Securities Market, which expressly recognises the representation of transferable securities through distributed ledger technologies such as blockchain, granting them full legal validity.

    The role of the Land Registry in the blockchain era

    In parallel, the Spanish Association of Land Registrars is exploring how to integrate blockchain technology into the registry system, although it is important to clarify the real scope of these initiatives. Current projects focus mainly on complementary applications such as digital management of the Building Book or improved traceability and accessibility of registry information. They do not aim to replace the fundamental pillars of the system: execution of public deeds before a notary and registration of ownership, which remain absolutely mandatory for the transfer of real rights over property. Registrars are firm in their institutional stance: blockchain can complement and streamline document management, but it cannot replace the legal control exercised by the registrar or the protection of third parties offered by the Land Registry — both essential components of the Spanish legal system. This position reflects the current limitation of the model: tokens circulate on the blockchain representing positions in SPVs or economic rights over them, but the actual ownership of the property remains anchored in the traditional registry system, held by the corporate vehicle, and any transfer of that ownership must still follow the conventional legal process with all its guarantees.

    European regulation: ECSPR, MiCA and the DLT Pilot Regime

    Spain also benefits from a European regulatory framework that is positioning the EU as a global leader in digital asset regulation. The European Crowdfunding Service Providers Regulation (ECSPR) harmonises the rules for crowdfunding platforms, allowing an authorised platform in one Member State to operate across the EU through the so-called “European passport”. The MiCA Regulation, which came fully into force on 30 December 2024, broadly regulates crypto-asset markets, setting obligations for both issuers and service providers. The DLT Pilot Regime (EU Regulation 2022/858) allows market infrastructures based on distributed ledger technology to operate under certain temporary exemptions, creating a controlled testing environment to assess the potential of these technologies in financial markets.

    The Spanish regulator’s approach could be described as cautiously supportive: innovation is encouraged, but strict compliance with anti-money laundering, customer identification, and disclosure obligations is required to protect investors. This is not technological laissez-faire, but rather an effort to integrate innovation within a solid framework of legal guarantees.

    Legal challenges and risks of real estate tokenisation

    The risks of the SPV structure

    The legal challenges that remain are significant and deserve attention. The SPV structure, while legally viable, introduces an additional layer of complexity and risk that must be clearly communicated to investors. Unlike direct ownership — where the investor holds real rights over the property enforceable against third parties — in the current tokenised model, investors hold positions in indirect forms of economic participation (shares, participative loans, credit rights) linked to the company that owns the property. This has important implications for corporate liability, taxation, and insolvency protection.

    The disconnect between the on-chain and off-chain worlds

    It is also essential to understand that the connection between the “on-chain” world (where tokens circulate) and the “off-chain” world (where property rights are recorded) is neither direct nor automatic. Transferring a token does not in itself alter the Land Registry: ownership of the property remains with the SPV regardless of who holds the tokens, and only a duly notarised and registered deed can change that ownership. The exploratory projects of the Land Registrars aim to improve efficiency in information management but do not alter this fundamental principle. As in any emerging market, it is essential to prevent fraudulent schemes that promise unrealistic returns or market tokens without proper legal backing.

    Practical implications for investors and legal practitioners

    For legal practitioners, real estate tokenisation may require adapting contracts, corporate bylaws, and financing structures to an environment where rights circulate digitally and in a decentralised manner. For investors, it offers an opportunity to diversify portfolios with smaller capital contributions and greater liquidity potential than traditional real estate investment, provided they understand that they are not acquiring direct ownership of the property but rather a financial position linked to the corporate structure that owns it. And for the wider economy, it could invigorate a real estate market worth trillions of euros by facilitating the entry of retail capital previously excluded from such investments.

    The future of real estate tokenisation in Spain

    This is an evolution that combines law, technology, and finance in an inseparable way. It is essential to understand that tokenisation is not a passing trend but a tool that, when properly used and regulated, can transform access to one of society’s most valuable assets — property. However, this transformation currently operates through intermediate corporate structures and indirect forms of economic participation, not through direct ownership as commercial language sometimes suggests. It certainly does not imply an immediate revolution of Spain’s land registration system, whose fundamental guarantees remain intact.

    It is quite common for business relationships with agents or distributors to last for years without any signed documents. And be careful, because we know that a contract can exist even verbally.

    The absence of a written contract will add difficulties in the event of a possible claim, so what you do between the decision to terminate, and the moment of the claim is very important. Remember: ‘anything you write will be used against you’.

    The decision to terminate a business relationship is a very delicate moment to which, for some reason, solicitors are not invited. Here are some examples (all real) in which companies or employees with the best of intentions wrote to the agent/distributor. All of them were subsequently very damaging to the company:

    Saying ‘We are terminating our business relationship’ when the strategy will be to argue that no such business relationship exists, but rather that there are separate and linked contracts (e.g., supply rather than ongoing distribution contract; very significant compensation consequences).

    ‘You no longer represent our company’, which may be evidence that you did so before.

    ‘As of day X, you may no longer act on behalf of our company,’ which would prove that you were previously able to act on its behalf.

    ‘You may not attend the X trade fair on our behalf.’ A way of confirming that the agent/distributor’s responsibilities included participating in trade fairs and probably accrediting the customers obtained.

    ‘The sales you promoted have been significantly reduced in year N.’ When there is no written contract or other form of documentation, imputing a breach of an obligation that is not clear can be counterproductive.

    Saying ‘You are not actively promoting our products’ and then adding: ‘We urge you to stop promoting the sale of our products’.

    ‘You are no longer our exclusive representative’, which proves a type of relationship (representation/agent) and a tacit or express agreement (‘exclusivity’).

    ‘We have appointed another representative in your area’, which shows that the agent/distributor had an assigned area and was “representing”.

    ‘From this moment on, orders will be handled by X’, which also confirms a type of relationship.

     

    In summary: from the moment the company considers terminating a commercial relationship, especially when it is not in writing and before sending any letter, it is advisable to think carefully about the strategy in case of a possible claim. This is the best time to seek advice and avoid surprises. Any communication that is not in line with this strategy designed from the outset can only lead to confusion and problems.

    Since the General Data Protection Regulation (GDPR) took effect in 2018, the European Union (EU) has granted adequacy status to only a limited number of jurisdictions — those whose data protection regimes are deemed to provide an “essentially equivalent” level of protection to that of the EU. The current list includes Andorra, Argentina, Canada (under PIPEDA), Faroe Islands, Guernsey, Isle of Man, Israel, Japan, Jersey, New Zealand, South Korea, Switzerland, Uruguay, the United Kingdom, and the United States (limited to companies certified under the Data Privacy Framework).

    As of 5 September 2025, Brazil is on the verge of joining this exclusive group. The European Commission has issued a draft adequacy decision concluding that the Brazilian General Data Protection Law (Lei Geral de Proteção de Dados Pessoais – LGPD), in conjunction with Brazil’s broader legal and constitutional framework, offers protections that are essentially equivalent to those found in the GDPR. While Brazil’s rules offer somewhat more flexibility in specific areas of data processing, the foundational principles and safeguards are well-aligned with EU standards.

    Once finalized, the adequacy decision will authorize the free flow of personal data from the EU to Brazil without the need for additional contractual clauses or technical safeguards. Such a development is not just regulatory — it also answers a core political argument made by LGPD advocates since its inception: that the absence of a comprehensive data protection framework was undermining Brazil’s international competitiveness by limiting data flows and discouraging investment. For businesses, the EU decision may finally mean the removal of a significant layer of compliance complexity — a development especially welcome by small and medium-sized enterprises engaged in cross-border trade or service provision. The draft is currently under review by the European Data Protection Board (EDPB) and the Member States of the EU.

    The Commission’s assessment highlights several key aspects of Brazil’s data protection landscape. It begins by noting that the Brazilian Constitution expressly guarantees the right to privacy and the protection of personal data — a notable distinction among non-EU jurisdictions. These protections are further supported by Brazil’s ratification of the American Convention on Human Rights and its recognition of the jurisdiction of the Inter-American Court of Human Rights, reinforcing a commitment to fundamental rights and democratic oversight.

    The LGPD mirrors the GDPR in many critical respects and defines its territorial scope clearly. It applies to: (i) data processing carried out within Brazilian territory, (ii) the offering of goods or services to individuals in Brazil, and (iii) data collected in Brazil, even if subsequently processed abroad. This aligns well with the extraterritorial provisions of the GDPR. The definitions of personal data, sensitive data, controller, and processor are materially similar, as are the key principles governing processing — including lawfulness, purpose limitation, data minimization, accuracy, transparency, and security. The law expressly excludes anonymized data from its scope and establishes specific exemptions for journalistic activities, public security, and scientific research.

    Another strength is Brazil’s institutional framework. The National Data Protection Authority (ANPD) was recently transformed into an autonomous regulatory agency, enhancing its independence and technical capacity. The ANPD holds both regulatory and enforcement powers: it can issue binding regulations, impose administrative sanctions, and publish authoritative guidance. To date, it has issued key guidelines on topics such as consent, legitimate interest, the role of the Data Protection Officer (DPO), and security incident reporting. Internationally, the ANPD is an active participant in global data protection dialogue — it is a member of the Global Privacy Assembly and an official observer to the Council of Europe’s Convention 108.

    The LGPD’s approach to international data transfers is also structurally aligned with the GDPR. It requires appropriate safeguards such as standard contractual clauses, allows for future adequacy decisions under a regime comparable to Article 45 of the GDPR, and includes detailed provisions for onward transfers and transit data — that is, data merely passing through Brazil without further processing. The rights of data subjects are robust and familiar to European practitioners: access, rectification, erasure, portability, and withdrawal of consent are guaranteed. Lawful bases for processing are also aligned — including consent, legal obligations, contract execution, and legitimate interest. Notably, the LGPD requires a documented balancing test when relying on legitimate interest, bringing additional accountability to this flexible legal basis.

    Security incidents involving personal data must be notified to both the ANPD and affected data subjects when there is a significant risk of harm. The standard notification deadline is 72 hours, and the required content aligns closely with Articles 33 and 34 of the GDPR. The ANPD may also order public disclosure of incidents or require remedial measures, depending on the nature and scope of the breach.

    Importantly, this process is not one-sided. In parallel to the European Commission’s adequacy decision, the ANPD is conducting its own adequacy assessment of the EU and EEA data protection frameworks. This process is regulated by the Brazilian Resolution CD/ANPD No. 19/2024, which governs international data transfers. Once the technical and legal evaluation is complete, the ANPD’s Board of Directors will issue a formal decision. This reciprocal move reflects Brazil’s commitment to mutual recognition and regulatory symmetry — a positive signal for companies on both sides of the Atlantic.

    In conclusion: If confirmed, Brazil’s adequacy status will simplify international operations, reduce compliance costs, and expand opportunities for data-driven business and legal cooperation. For European lawyers advising SMEs with interests in Latin America, this development is a strategic signal: Brazil is emerging not just as a growing market, but as a legally compatible and data-safe jurisdiction for international partnerships.

    Remember the USA – EU agreement on 15% tariffs? I wrote that with a negotiator like Trump the game is never over (article here) and—after the recent interlude featuring a threat of 100% tariffs on pharmaceuticals—the U.S. government has announced the imposition of an overall 107% duty on Italian pasta, which could take effect on January 1, 2026.

    Where this new duty comes from

    The antidumping investigation was launched by the U.S. Department of Commerce at the request of certain competing American companies and is based on a 1996 antidumping order that allows for periodic reviews of imports of Italian pasta. The Department of Commerce conducts these checks annually to assess whether Italian producers are selling pasta at prices lower than the U.S. domestic market, a practice known as “dumping.”

    Companies involved in the investigation

    The Department of Commerce selected two sample companies for in-depth analysis, defined as “mandatory respondents”: La Molisana and Pastificio Lucio Garofalo. According to the official document published by the U.S. administration, for the period from July 1, 2023 to June 30, 2024, both companies allegedly sold their products below market prices, resulting in the imposition of a duty of 91.74%.

    U.S. authorities justified this percentage by claiming the two companies did not provide complete or compliant information as requested by the Department and were therefore insufficiently cooperative during the investigation. What is very important is that, in addition to the two companies directly examined, the additional 91.74% duty is also applied to numerous other Italian producers not individually reviewed. This methodology, while formally permitted under U.S. law as an exception, is being applied without any direct verification of the other companies.

    Next steps in the procedure

    Italy’s Ministry of Foreign Affairs moved immediately, formally intervening in the proceeding as an “interested party” through the Italian Embassy in Washington. The Foreign Ministry is working in close coordination with the companies concerned and, in concert with the European Commission, to persuade the U.S. Department to revise the provisional duties.

    The two companies involved (La Molisana and Garofalo) can submit documentation to contest the dumping allegations. However, if dumping is confirmed, the Department of Commerce will instruct Customs to apply antidumping duties on goods sold and entered into U.S. commerce.

    The preliminary nature of this determination means there is still room to change the decision before it becomes final.

    Possible effective date

    The new super-duty of 91.74%, which will be added to the existing 15% tariff for a total of 107%, is scheduled to take effect on January 1, 2026. This date therefore represents a crucial deadline for all ongoing diplomatic and legal actions.

    If confirmed, the economic impact would be significant: in 2024, Italian pasta exports to the United States reached a value of €671 million according to Coldiretti, accounting for nearly 17% of the sector’s total exports. A 107% duty would risk seriously undermining competitiveness in one of the most important markets for Italian agri-food products.

     What to do between now and January 1, 2026?

    At this stage, the entry into force of the new duty depends on the outcome of the ongoing procedure: given what has happened in recent months, and the political use the U.S. administration has made of tariffs—well beyond their technical function—it is reasonable to be pessimistic.

    So, what to do? In recent months we have seen companies react to the uncertainty over the fate of the tariffs in three ways:

    • Some rushed to ship as many products as possible before the potential effective date of the duty;
    • Some granted—upfront—discounts equivalent to the threatened duty, in case it came into force;
    • Some suspended orders, pending definitive news on the impact of the duties.

    These are all  valid options, but other effective tools for managing the uncertainty caused by the flurry of announcements, negotiations, and threats from the U.S. administration should not be forgotten: the risk of new duties being introduced, or existing ones being increased, can be managed in the contract by agreeing with the U.S. importer how any tariff change will affect the product.

    The parties can stipulate, for example, that the increase will be split equally; or that the importer will bear it beyond a certain threshold; or that if the duty exceeds a certain level, the contracts may be terminated. You can find a deeper dive in this article.

    The only certainty is that trade relations with the U.S. will stay unpredictable for a long time, and it’s vital to carefully manage the risk factors involved in selling products there. Right now, the focus is on tariffs and prices, and I encourage you to take this chance to thoroughly review existing agreements and assess whether—and how—other important points are addressed that could entail significant liabilities: we discuss them, very practically, in this book.

    A dedicated notary account in Brazil is a legal mechanism that brings greater security, transparency, and reliability to financial transactions. Regulated under Law 8.935/1994 and Provision No. 197/2025, this service allows notaries to receive, manage, and release funds only after contractual conditions have been fulfilled. By ensuring segregation of assets, traceability, and impartial oversight, dedicated notary accounts provide an effective escrow-like solution for real estate deals, mergers and acquisitions, import/export operations, high-value asset purchases, and complex commercial contracts. This tool not only reduces legal risks and potential disputes but also strengthens trust between parties by guaranteeing that payments are safeguarded until obligations are met.

    The legal basis can be found in Law 8.935/1994, § 1 of art. 7-A, which allows notaries to receive, deposit, and manage amounts related to legal transactions, with transactions subject to objectively verifiable facts/conditions. Provision No. 197, dated June 13, 2025, regulates, at the national level, the service of notarial accounts linked to Notary Public Offices.

    Practical applications: among others, in the following transactions:

    • Real estate: guarantee that the down payment and settlement amounts will be secured in a specific account. This mitigates the risk of misappropriation of funds and ensures that the money will be released only after all contractual conditions have been met.
    • M&A: the linked notarial account creates a standardized escrow mechanism for the payment of price/holdbacks/earn-outs and conditional obligations.
    • Purchase and Sale of High-Value Movable Property: the linked account can be used to guarantee payment. The buyer deposits the amount and the seller knows that the money is safe, being released only after the transfer of ownership and delivery of the goods.
    • Import and Export: the transaction amount can be deposited with the notary and released to the exporter only after confirmation of delivery of the goods in the destination country, for example.
    • Guarantee of Obligations: In any contract that provides for the payment of a sum of money as a guarantee, the notary account can be used to provide greater security to the parties.
    • Supply, EPC/turnkey, and construction contracts: performance retentions, milestone acceptance (commissioning, as-built, issuance of ART/CREA), and payment against formal acceptance.
    • Contractual joint ventures and commercial partnerships: advances conditional on licenses, authorizations, or competitive approval, where applicable.

    Reduction of Legal Risks: The use of linked accounts reduces the chances of litigation related to lack of clarity about the origin and destination of funds. Companies can clearly demonstrate that payments were made and held by an impartial and secure institution.

    Operational structure: limited to banking entities affiliated with the CNB, which must ensure the segregation of assets, traceability through audit trails, and proof of all transactions. The authorization of the delegate requires prior accreditation and electronic registration of the essential details of the transaction and its conditions in the CNB system, with access restricted to the parties and the notary.

    Specific Purpose: amounts received as payment, guarantee, or advance payment as a result of notarial acts must be deposited in a bank account linked to the specific act and may only be moved for the purpose for which they are intended.

    Transparency and Traceability: With the linked notarial account, it is possible to clearly track the financial flow of each transaction, which increases transparency for all parties and for supervisory bodies.

    Verification of conditions and release. Once the objective conditions have been met, the notary authorizes the transfer to the recipients and files the proof of verification. In the event of a dispute between the parties, the notary suspends any movement, draws up a notarial deed, and advises on a consensual or judicial solution, without deciding on the effectiveness/termination of the transaction; if the transaction is frustrated and no solution is found, the procedure is terminated and the amounts are returned to the depositor, in accordance with the agreed clauses.

    Confidentiality and access. In transactions with a confidentiality clause, the notary public maintains confidentiality and does not issue certificates regarding the content of the transaction; documents are accessible only for correctional purposes or by court order.

    Remuneration and costs. The notary’s remuneration for the notarial account service is paid by the financial institution under the terms of the agreement, and the transfer of additional costs to the user is prohibited, without prejudice to fees for any related notarial acts.

    Article 442-1.II of the French Commercial Code (former Article L. 442-6.I.5 °) sanctions the termination by a trader of a written contract or an informal business relationship without giving sufficient written prior notice. Over the last twenty years, this article became the recurring legal basis for all compensation actions (up to 18 months of gross margin, plus other damages) when a commercial relationship or a contract ends (totally or even partially).

    Therefore, a foreign trader who contracts with a French company should try not to fall under the aegis of this rule (part I) and, if it cannot, should understand and control its implementation (part II).

    In a nutshell:

    How can a foreign company avoid or control the risk linked to the “sudden termination of commercial relations” set by French law? Foreign companies doing business with a French counterpart should:

    • enter, as soon as possible, into a written (frame) agreement with their French suppliers or customers, even for a very simple relation and;
    • stipulate a clause in favour of foreign court or arbitration and foreign applicable law while, failing to choose it, they would rather be subject to French courts and laws;

    How can a foreign company master the risk linked to the “sudden termination of commercial relations” set by French law? Foreign companies doing business with a French counterpart should:

    • know that this article applies to almost all type of commercial relationship or contracts, whether written or not, fixed-term or not;
    • check whether its relation/contract is sufficiently long, regular and significant and whether the other party has a legitimate belief in the continuation of this relation/contract;
    • give a written notice of termination or non-renewal (or even of a major modification), which length takes mainly into account the duration of the relation, irrespectively of the length of the contractual notice;
    • invoke, with cautiousness, force majeure and gross negligence of the party, to set aside “sudden termination”;
    • anticipate, in case of insufficient notice, a compensation which amount is the product of the average monthly gross margin per the length of non-granted prior notice.

    How to avoid the application of the French “Sudden Termination” rule?

    In international matters, a foreign company must anticipate whether its relationship will be subject or not to French law before terminating a contract or a business relationship and, in case of dispute, whether it will be brought before a French court or not.

    What will be the law applicable to “Sudden Termination”?

    It is quite difficult for a foreign company to correctly grasp the French legal framework of conflict of laws rules applicable to “sudden termination”. In a ruling of September 19, 2018 (RG 16/05579, DES/ Clarins), the Court of appeal of Paris made, by an implicit reference to the Granarolo EU ruling (07 14 16, N°C196/15) an extension of the contractual qualification to most of the business relationships which will improve foreseeability in order for a foreign company to try to exclude French law and its “sudden termination” rule.

    Sudden termination of a written contract or of a “tacit contractual relationship”

    According to Rome I Regulation (EC No 593/2008, June 17 2008) on the law applicable to contracts:

    – In case of choice of a foreign law by the parties: The clause selecting a foreign applicable law will be valid and respected by French judges (subject to OMR, see below), provided that the choice of law by the parties is express or certain.

    – In case of no choice by the parties: French law will likely to be declared applicable as it might be either the law of the country where is based the distributor/franchisee, etc. or the law of the country where the party who is to provide the service features of the contract has its domicile.

    Sudden termination of a “non-tacit contractual relationship”

    In case of informal relationship (i.e. orders placed from time to time), French judges would retain the tort qualification and will refer to the Rome II Regulation (No 864/2007, July 11 2007) on the law applicable to non-contractual obligations..

    – In case of choice of a foreign law by the parties: a properly drafted choice of foreign law clause should be implemented by a French judge, provided that it expressly includes tort cases.

    – In case of no choice of law by the parties: French law will likely to be declared applicable as it might be the law of the country where the damage occurs (regardless of the place of the causing event or that of the indirect consequences), which is the place of the head office where the French victim suffers the consequences of the termination.

    “Sudden Termination” rule, a French Overriding Mandatory Rule?

    The position of French courts is quite vague and unsatisfactory, and this has been the case for a long time. To make it short: the Commercial Court of Paris judges that “sudden termination” is not an OMR, the Court of appeal of Paris (sole French appellate court in charge of “sudden termination” cases) is also not in favour of the OMR qualification on the grounds that the text “protects purely private economic interests” (CA Paris, pôle 5, ch. 5, Feb 28. 2019, n° 17/16475 / CA Paris, pôle 5, ch. 5, Oct 8. 2020, n°17/19893). Recently, the Paris Court of Appeal reaffirmed that the rules on sudden termination of established commercial relations are not an OMR (Court of appeal Paris, March 11, 2021, n° 18/03112).

    The French Supreme Court has never explicitly addressed the issue (OMR or not OMR). Indeed, the French Supreme Court ruled in the Expedia case (Cass. com., July 8, 2020, n°17-31.536) that the provisions of the former article L. 442-6, I, 2º and II, d), about “significant imbalance” (which is in the same set of rules than “Sudden termination”) are OMR. However, this qualification should be limited to the specific action brought by the Ministry of Finance and not be applicable to an action by a private party. Moreover, some courts may be tempted to invoke the provisions of French law n°2023-221 (March 30, 2023, aka Egalim III) to qualify Sudden termination rule as an OMR, however this text (article L 444-1.A Commercial code) does not quote expressly OMR and set no justification whatsoever to set such a qualification.

    Consequently, if a claim for “sudden termination” is brought to a French court, there is still a  risk that the latter would exclude the applicable foreign law and replace it with the regime resulting from the “sudden termination” of Article L 442-1. II. However, to avoid this risk, a foreign company would better not only choose a foreign governing law but also stipulate that the dispute will be brought before a foreign judge or an arbitral tribunal.

    How to avoid jurisdiction of French court over a “Sudden Termination” claim?

    “Sudden Termination” claim and intra EU co-contractor

    The ECJ ruling (Granarolo, July 14, 2016, N°C196/15) created a distinction between claims occurring from:

    – written framework contract or tacit contractual relationship (existing only if the body of evidences listed by the ECJ are identified by national judges, i.e. length of relation and commitments recognized to each other, such as exclusivity, special price or terms of delivery or payment, non-competition, etc.): such claim has a contractual nature according to conflict of jurisdiction rules under Brussels I recast Regulation;

    – informal relationship which is a non–tacit contractual relationship (i.e. orders placed from time to time): such a request has a tort nature under Brussels I recast ;

    To be noted: the so-called Egalim III law has no impact on the EU rules on jurisdiction clauses.

    (a) Who is the Judge of the “sudden termination” of a written contract or of a “tacit contractual relationship”?

    – Jurisdiction clause for the benefit of a foreign court will be enforced by French courts, even though it is an asymmetrical clause (Court of cassation, October 7, 2015, Ebizcuss.com / Apple Sales International).

    – In case of lack of choice of court clause, French courts are likely to have jurisdiction if the French claimant bringing a case based on “sudden termination» is the service provider, such as distributor, agent, etc. (see ECJ Corman Collins case, 19 12 13, C-9/12, and article 7.1.b.2 of Brussels I recast°).

    (b) Who is the Judge of the “sudden termination” of a “non- tacit contractual relationship”?

    – We believe that French courts may continue to give effect to a jurisdiction clause in tort case, especially when it expressly encompasses tort litigation (Court of cassation, 1° Ch. Civ., January 18, 2017, n° 15-26105, Riviera Motors / Aston Martin Lagonda Ltd).

    – In case of lack of choice of court clause, French courts will have jurisdiction over a “sudden termination” claim as the judge of the place where the harmful event occurred (art. 7.3 of Brussels I recast), which is the place where the sudden termination has effect…i.e. in France if the French company is the victim.

    “Sudden Termination” claim and Non-EU co-contractor

    The Granarolo solution will not ipso facto apply if a French victim brings a claim to French courts, based on a “sudden termination” made by a non-EU company. In non-EU relations, French judges could continue to retain only the tort qualification. In such a case, French courts may keep their jurisdiction based on the place where the harmful event occurs.

    Jurisdiction clause to a foreign court may be recognized in France (even for tort-based claims), provided that this jurisdiction clause is valid according to either a bilateral international convention or to the Hague Convention of 30 June 2005 on choice of court agreements. Otherwise, according to Egalim III law, imperative jurisdiction might be attributable to French courts.

    “Sudden Termination” claim and arbitration

    Stipulating an ad hoc or institutional arbitration clause is probably the safest solution to avoid the jurisdiction of French courts. Ideally, the clause will fix the seat of the arbitral tribunal outside France. According to the principle of competence-competence of the arbitrators, French courts declare themselves incompetent, unless the arbitration clause is manifestly void or manifestly inapplicable, regardless of contract or tort ground (see, in particular, Paris Court of Appeal, 5 September 2019, n°17/03703). The so-called “Egalim III” law has no impact on arbitration clauses.

    Conclusion: Foreign companies should not leave open the Jurisdiction and governing Law issues. They must negotiate a safe harbour, otherwise a French victim of a termination will likely to be entitled to bring a “sudden termination” claim in front of French judges (see what happen below in Part 2)

    How to master the “Sudden Termination” French rules?

    When French law is applicable, the foreign company will face the legal regime of article L442 -1.II of the French Commercial Code sanctioning “sudden termination”. As a preliminary remark, it is important to know, above all, that the implementation of the liability for “sudden termination” is the consequence of the lack of a notice or a too short notice. Thus, this scheme does not lay down an automatic compensation rule. In other words, as soon as reasonable notice is given by the author of the termination, liability on that basis can be dismissed.

    The prerequisite for “Sudden Termination”: an established commercial relationship

    All contracts are covered by this legal regime, except for contracts whose regulations provide for a specific notice of termination, like commercial agency contracts and transport of goods by road subcontracts.

    First, there must be a relationship that can be proven by a written contract or de facto, by behaviour of the parties. Article L.442-1 II of the French Commercial Code covers all “commercial” relationships and not only “contractual ones so that such relationship may be based on a succession of tacitly renewed contracts or a regular flow of business, materialized by multiple orders. This was recently recalled by the Supreme Court (Supreme Court, February 16, 2022, n° 20-18.844)

    Second, this relationship must have an established character. There is no legal definition, but this notion has been defined year after year by case law which has established an objective criterion and a more subjective one.

    (a) The objective criterion implies a sufficiently long, regular and significant relationship between the two parties. The duration of the relationship is the most important criterion. The relationship must also be regular, that is, it must not have been interrupted (too often or too long). The relationship must ultimately be meaningful and represent a serious flow of business between the parties, in volume or value.

    (b) The subjective test focuses primarily on the legitimate belief of the victim of the rupture in the continuation of the contract / the relationship that is based on factual elements, such as investment requests, budgets over several years, etc. Conversely, it is on the basis of the finding of a lack of legitimate belief in a common future that the terminating party can prove the absence of a stable character when he has resorted, on several occasions, a call for tenders (unless it is a trick).

    Anticipating a “Sudden Termination” claim

    (a) The termination may be total or partial

    The total rupture is materialized by a complete stop of the relations, for example ending the contract, stopping the sending of orders by the purchaser or the recording of orders by the supplier.

    The Supreme Court recently recalled that a significant drop in sales with a partner must be considered as a partial rupture of the relationship (February 16, 2022, n° 20-18.844, cited above). But the most complicated situation to deal with is the so-called partial rupture that will be deduced from a modification of elements that partly impacts the relationship but does not reduce it to nothing (ex.: a price increase or decrease, a change in the terms of payment or delivery).

    (b) The termination must be subject to a reasonable written prior notice

    The notice must be notified in writing. The absence of written notice is already a breach in itself. The notification must clearly reflect the willingness of a party to sever the relationship in whole or in part, which must be clearly identified. The notification must also clearly identify the date on which the relationship will end.

    Thus, an ambiguity on the notice period (e.g if the termination of an agreement is notified, whilst offering to maintain certain prices and payment terms, in the meantime) is considered as an insufficient termination notice (French Supreme Court, January 29, 2013, n° 11-23.676).

    Parties must distinguish between the letter of formal notice for default and the subsequent notification of the breach, giving notice (if applicable). During the period of notice, parties must fully comply with all contractual conditions.

    This principle also applies to distribution contracts subject to specific French rules imposing annual or multi-year negotiation obligations. In fact, the Court of cassation has ruled that “when the conditions of the commercial relationship established between the parties are subject to annual negotiation, modifications made during the notice period which are not so substantial as to undermine its effectiveness do not constitute a brutal breach of that relationship” (Cass. com., Dec. 7, 2022, n° 19-22.538).

    However, it’s not necessary to mention the reasons why the commercial relationship is terminated is not a fault or breach of the relationship. In fact, French courts consider that “the fact that the given reason to terminate was false does not in any way present the terminating party from terminating the commercial relationship” (Versailles Court of Appeal, June 10, 1999).

    The duration of the prior notice to be respected is not defined by French law which did not pose precise rule until the reform 2019. If several criteria are stated by case law, it should be noted that the most important criterion is the duration of the relationship. Judges also take into account the share of turnover achieved by the victim, the existence or not of a territorial exclusivity, the nature of the products and the sector of activity, the importance of the investments made by the victim especially to the relationship in question, and finally the state of economic dependence. Economic dependence is defined as the impossibility for a company to have a solution that is technically and economically equivalent to the contractual relations it has established with another company. Case law considers this to be an aggravating factor justifying a longer termination notice.

    The minimum notice period must be notified at the time of notification of termination. As a consequence, events that affect the victim after the notification, both positively (conclusion of a new contract) and negatively (loss of another custome), will not be taken into account by the judge, at the time of ruling, when assessing the “brutality” of the termination.

    The length of the notice given by the judges is very variable. The appreciation of notice is made on a case-by-case basis. It is very difficult to give a golden rule, even though roughly for each year of relationship, a month’s notice might be due (to modulate up or down depending on the other criteria in the relationship). But way of illustration, however, the following case law may be cited:

    • Paris Court of Appeal , Feb.9, 2022: 16-year relationship with 15 months’ notice;
    • Paris Court of Appeal, Jan.20, 2022: 12-year relationship with 8 months’ notice;
    • Paris Court of Appeal, Oct. 25, 2022: 16-year relationship with 18 months’ notice;
    • Paris Court of Appeal , Feb. 23, 2022: 17-year relationship with 11 months’ notice;
    • Paris Court of Appeal, Sept. 21, 2022: 5-year relationship with 14 months’ notice.

    Since the Order of April 24, 2019, which limits the length of reasonable notice to a maximum of 18 months, if the notice period granted by a party is 18 months, it cannot be held liable for a sudden termination. However, much of the litigation remains uncertain, as only exceptionally long or particularly sensitive relationships led, prior to 019, to the award of more than 18 months’ notice. Ordinance of April 24, 2019, limits to 18 months the maximum period of notice reasonably due under Article L 442-1.II. But much of the litigation will remain uncertain since only relations of exceptional longevity or particularly sensitive, could have led to the allocation of a notice higher than 18 months.

    Judges are not bound by the contractual notices stipulated in the contract. But if the author of the breach also violated the terms and conditions of termination provided for by contract, the victim may seek the responsibility of the author both on the tort basis of the sudden rupture and also on the basis of the breach of a contractual obligation.

    Cases in which “Sudden Termination” is ruled out

    The legal regime provides for two cases, and the case-law seems to have imposed others.

    (a) The two legal exceptions are Force majeure (very rarely consecrated by the courts) and the fault of the victim of the termination, case-law having added that it must be a serious violation (“faute grave”) of a contractual commitment or a legal provision (such as non-respect of an exclusivity, a non-compete, a confidentiality or a change of control duty, or non-payment of amounts due contractually).

    The judges consider themselves, of course, not bound by a termination clause defining what constitutes serious misconduct. In any case the party who terminates for serious misconduct must clearly notify it in its letter of termination. Above all, serious misconduct leads to a lack of notice, therefore, if the terminating party alleges serious misconduct but grants notice, whichever it may be, judges may conclude that the fault was not serious enough.

    Thus, the seriousness of the misconduct must be motivated by judges in their rulings. Noting that the contract was breached after two formal notices is not sufficient (Cass. com., Feb 16. 2022, n° 20-18.844).

    However, the Court of Cassation considers that “even in the case of serious misconduct justifying the immediate termination of the commercial relationship, the other party remains free to give the other party a notice” (Cass. Com., Oct. 14 2020, n°18-22.119).

    (b) In recent years, case-law has added other cases of liability waiver. This is the case when the rupture is the consequence of a cause external to the author of the rupture, such as the economic crisis, the loss of its own customers or suppliers, upstream or downstream.

    For example, in 2021 the Court of cassation has ruled that “the business partner is not entitled to an unchanged relationship and cannot refuse any adaptation required by economic changes” (Com, Dec 01, 2021, n°20-19.113). In fact, to be attributable to an economic player, a termination must be free and deliberate. This is not the case if termination is imposed by the economic situation.

    However, adding a liability exemption clause in a contract, aimed at waiving destinated to escape the penalties of article L. 442-1, is without consequences on the judge’s appreciation.

    Judges have also excluded “sudden termination” in the hypothesis of the end of the first period of a fixed-term contract, whatever its duration is: the first renewal of a contract, constitutes a foreseeable event for the victim of the rupture, which excludes the very notion of brutality; but once the contract has been renewed at least once, judges can subsequently characterize the victim’s legitimate belief in a new tacit renewal.

    Compensation for “Sudden Termination”

    Judges only compensate for the detrimental consequences of the brutality itself of the breach but do not compensate, at least in the context of article L442 -1.II, for the consequences of the breach itself.

    The basic rule is very simple: it is necessary to determine the length of the notice which should have been granted, from which the notice actually granted is deducted. This net notice is multiplied by the average monthly gross margin of the victim, or more often the so called margin on variable costs (i.e. the turnover minus costs disappearing with non-performance of the contract/relation). Defendant should not hesitate to ask for the full accountancy evidences, especially to identify (lower) margin rates, or even for a judicial expertise on those accounting elements. In general, the base of the average monthly margin consists of the last 24 or 36 months.

    The compensation calculated on the average margin is, in general, exclusive of any other compensation. However, the victim can prove that it has suffered other losses as a consequence of the brutality of the rupture. Such as dismissals directly caused by this brutality or the depreciation of investments made recently by the victim.

    Some practical tips when considering to anticipate “Sudden Termination”

    Even though the legal regime is still ambiguous and the case-law terribly casuistic which prevents to release strong guidelines, here are some practical tips when a company plans to terminate a relationship / contract:

    • in the case of a fixed-term contract renewable tacitly, the notification of non-renewal must be anticipated well in advance of the beginning of the contractual notice in order to avoid being in a situation where it is necessary to choose between not renewing the contract with a notice that is not sufficient or agree to see the contract renewed itself for a new term;
    • commercial teams must be made aware of the risk of partial sudden termination when they change the conditions of execution of a commercial relationship / contract too radically;
    • in some cases, it may be useful to send a pre-notice of termination with a “notice proposal” in order to try to validate this notice with the other party;
    • it may also be useful, in certain relationships, to notify the end of the relationship with different lengths of notice depending on the nature of the product lines;
    • Finally, the best way is to conclude an end-of-relation protocol, fixing the duration of the notice as well as, if necessary, the progressive decline of the orders, the whole within the framework of a settlement agreement which definitively waives any claim, including “sudden termination”.

    Sudden termination regime shall be taken into consideration when entering into the final phase of a duration relationship: the way in which the contract (or de facto relationship) is terminated must be carefully planned, in order to manage the risk of causing damages to the counterparty and being sued for compensation.

    Given the significance of the influencer market (over €21 billion in 2023), which now encompasses all sectors, and with a view for transparency and consumer protection, France, with the law of June 9, 2023, proposed the world’s first regulation governing the activities of influencers, with the objective of defining and regulating influencer activities on social media platforms.

    However, influencers are subject to multiple obligations stemming from various sources, necessitating the utmost vigilance, both in drafting influence agreements (between influencers and agencies or between influencers and advertisers) and in the behaviour they must adopt on social media or online platforms. This vigilance is particularly heightened as existing regulations do not cover the core of influencers’ activities, especially their status and remuneration, which remain subject to legal ambiguity, posing risks to advertisers as regulatory authorities’ scrutiny intensifies.

     

    Key points to remember 

    • Influencers’ activity is subject to numerous regulations, including the law of June 9, 2023.
    • This law not only regulates the drafting of influence contracts but also the influencer’s behaviour to ensure greater transparency for consumers.
    • Every influencer whose audience includes French users is affected by the provisions of the law of June 9, 2023, even if they are not physically present in French territory.
    • Both the law of June 9, 2023, and the “Digital Services Act,” as well as the proposed law on “fast fashion,” foresee increasing accountability for various actors in the commercial influence sector, particularly influencers and online platforms.
    • Despite a plethora of regulations, the status and remuneration of influencers remain unaddressed issues that require special attention from advertisers engaging with influencers.

     

    The law of June 9, 2023, regulating influencer activity  

    The definition of influencer professions

    The law of June 9, 2023, provides two essential definitions for influencer activities:

    • Influencers are defined as ‘natural or legal persons who, for consideration, mobilize their notoriety with their audience to communicate to the public, electronically, content aimed at promoting, directly or indirectly, goods, services, or any cause, engaging in commercial influence activities electronically.’
    • The activity of an influencer agent is defined as ‘that which consists of representing, for consideration,’ the influencer or a possible agent ‘with the aim of promoting, for consideration, goods, services, or any cause‘ (article 7) The influencer agent must take ‘necessary measures to ensure the defense of the interests of the persons they represent, to avoid situations of conflict of interest, and to ensure the compliance of their activity‘ with the law of June 9, 2023.

     

    The obligations imposed on commercial messages created by the influencer

    The law sets forth obligations that influencers must adhere to regarding their publications: 

    • Mandatory particulars: When creating content, this law imposes an obligation on influencers to provide information to consumers, aiming for transparency towards their audience. Thus, influencers are required to clearly, legibly, and identifiably indicate on the influencer’s image or video, regardless of its format and throughout the entire viewing duration (according to modalities to be defined by decree):

      – The mention “advertisement” or “commercial collaboration.” Violating this obligation constitutes deceptive commercial practice punishable by two years’ imprisonment and a fine of €300,000 (Article 5 of the law of June 9, 2023).
      – The mention of “altered images” (modification by image processing methods aimed at refining or thickening the silhouette or modifying the appearance of the face) or “virtual images” (images created by artificial intelligence). Failure to do so may result in a one-year prison sentence and a fine of €4,500 (Article 5 of the law of June 9, 2023).

    • Prohibited or regulated promotions: This law reminds certain prohibitions, subject to criminal and administrative sanctions, stemming from French law on the direct or indirect promotion of certain categories of products and services, under penalty of criminal or administrative sanctions. This includes the promotion of products and services related to:

      – health: surgery, aesthetic medicine, therapeutic prescriptions, and nicotine products;
      – non-domestic animals, unless it concerns an establishment authorized to hold them;
      – financial: contracts, financial products, and services;
      – sports-related: subscriptions to sports advice or predictions;
      – crypto assets: if not from registered actors or have not received approval from the AMF;
      – gambling: their promotion prohibited for those under 18 years old and regulated by law;
      – professional training: their promotion is not prohibited but regulated.

     

    The accountability of influencer behaviour

    The law also holds influencers accountable from the contracting of their relationships and when they act as sellers:

    • Regulation of commercial influence agreements: This law imposes, subject to nullity, from a certain threshold of influencer remuneration (defined by decree), the formalization in writing of the agreement between the advertiser and the influencer, but also, if applicable, between the influencer’s agent, and the mandatory stipulation of certain clauses (remuneration, mission description, etc.).
    • Influencer responsibility as a cyber seller: Influencers engaging in drop shipping (selling products without handling their delivery, done by the supplier) must provide the buyer with all information in French as required by Article L. 221-5 of the Consumer Code about the product, such as its availability and legality (i.e., guarantee that the product is not counterfeit), applicable product warranty, and supplier identity. Additionally, influencers must ensure the proper delivery and receipt of products and, in case of default, compensate the buyer. Influencers are also logically subject to obligations regarding deceptive commercial practices (for more information, the DGCCRF website explain the dropshipping).

     

    The accountability of other actors in the commercial influence ecosystem

     

    Joint and several liability is set by law, for the advertiser, influencer, or influencer’s agent for damages caused to third parties in the execution of the commercial influence contract, allowing the victim of the damage to act against the most solvent party.

    Furthermore, the law introduces accountability for online platforms by partially incorporating the European Regulation 2022/2065 on digital services (known as the “DSA“) of October 19, 2022.

     

    French regulation and international influencers

     

    Influencers established outside the European Union (including also Switzerland and the EEA) who promote products or services to a French audience must obtain professional liability insurance from an insurer established within the EU. They must also designate a legal or natural person providing “a form of representation” (SIC) within the EU. This representative (whose regime is not very clear) is remunerated to represent the influencer before administrative and judicial authorities and to ensure the compliance of the influencer’s activity with law of June 9, 2023.

    Furthermore, according to law of June 9, 2023, when the contract binding the influencer (or their agency) aims to implement a commercial influence activity electronically “targeting in particular an audience established in French territory” (SIC), this contract should be exclusively subject to French law (including the Consumer Code, the Intellectual Property Code, and the law of June 9, 2023). According to this law, the absence of such a stipulation would be sanctioned by the nullity of the contract. Law of June 9, 2023, seems to be established as an overriding mandatory law capable of setting aside the choice of a foreign law.

    However, the legitimacy (what about compliance with the definition of overriding mandatory rules established by Regulation Rome I?) and effectiveness (what if the contract specifies a foreign law and a foreign jurisdiction?) of such a legal provision can be questioned, notably due to its vague and general wording. In fact, it should be the activity deployed by the “foreign” influencer to their community in France that should be apprehended by French overriding mandatory rules, rather than the content of the agreement concluded with the advertiser (which itself could also be foreign, by the way).

     

    The other regulations governing the activity of influencers

     

    The European regulations

    The DSA further holds influencers accountable because, in addition to the reporting mechanism imposed on platforms to report illicit content (thus identifying a failing influencer), platforms must ensure (and will therefore shift this responsibility to the influencer) the identification of commercial communications and specific transparency obligations towards consumers.

    The «soft law»

    As early as 2015, the Advertising Regulatory Authority (“ARPP”) issued recommendations on best practices for digital advertising. Similarly, in March 2023, the French Ministry of Economy published a “code of conduct” for influencers and content creators. In 2023, the European Commission launched a legal information platform for influencers. Although non-binding, these rules, in addition to existing regulations, serve as guidelines for both influencers and content creators, as well as for judicial and administrative authorities.

     

    The special status of child influencers

    The law of October 19, 2020, aimed at regulating the commercial exploitation of children’s images on online platforms, notably opens up the possibility for child influencers to be recognized as salaried workers. However, this law only targeted video-sharing platforms. Article 2 of the law of June 9, 2023, extended the provisions regarding child influencer labor introduced by the 2020 law to all online platforms. Finally, a recent law aimed at ensuring respect for the image rights of children was published on February 19, 2024, introducing a principle of joint and several responsibility of both parents in protecting the minor’s image rights.

     

    The status and remuneration of influencers: uncertainty persists

     

    Despite the diversity of regulations applicable to influencers, none address their status and remuneration.

    The status of the influencer

    In the absence of regulations governing the status of influencers, a legal ambiguity persists regarding whether the influencer should be considered an independent contractor, an employee (as is partly the case for models or artists), or even as a brand representative (i.e. commercial agent), depending on the missions contractually entrusted to the influencer.

    The nature of the contract and the applicable social security regime stem from the missions assigned to the influencer:

    • In the case of an employment contract, the influencer will fall under the general regime for employees and assimilated persons, based on Articles L. 311-2 or 311-3 of the French Social Security Code.
    • In the case of a service contract, the influencer will fall under the regime for self-employed workers.

     

    The existence of a relationship of subordination between the advertiser and the influencer typically determines the qualification of an employment contract. Subordination is generally characterized when the employer gives orders and directives, has the power to control and sanction, and the influencer follows these directives. However, some activities are subject to a presumption of an employment contract; this is the case (at least in part) for artist contracts under Article L. 7121-3 of the French Labor Code and model contracts under Article L. 7123-2 of the French Labor Code.

     

    The remuneration of the influencer

    The influencer can be remunerated in cash (fixed or proportional) and/or in kind (for example: receiving a product from the brand, invitations to private or public events, coverage of travel expenses, etc.). The influencer’s remuneration must be specified in the influencer agreement and is directly impacted by the influencer’s status, as certain obligations (minimum wage, payment of social security contributions, etc.) apply in the case of an employment contract.

    Furthermore, the remuneration (for the influencer’s services) must be distinguished from that of the transfer of their copyrights or image rights, which are subject to separate remuneration in exchange for the IP rights transferred.

     

    The influencers… in the spotlight

    The law of June 9, 2023, grants the French authority (i.e. the Consumer Affairs, Competition and Fraud Prevention Agency, “DGCCRF”) new injunction powers (with reinforced penalties). This comes in addition to the recent creation of a “commercial influence squad“, within the DGCCRF, tasked with monitoring social networks, and responding to reports received through Signal Conso. The law provides for fines and the possibility of blocking content.

    As early as August 2023, the DGCCRF issued warnings to several influencers to comply with the new regulations on commercial influence and imposed on them the obligation to publicly disclose their conviction for non-compliance with the new provisions regarding transparency to consumers on their own social networks, a heavy penalty for actors whose activity relies on their popularity (DGCCRF investigation on the commercial practices of influencers).

    On February 14, 2024, the European Commission and the national consumer protection authorities of 22 EU member states, Norway, and Iceland published the results of an analysis conducted on 570 influencers (the so-called “clean-up operation” of 2023 on influencers): only one in five influencers consistently presented their commercial content as advertising. 

    In response to environmental, ethical, and quality concerns related to “fast fashion,” a draft law aiming to ban advertising for fast fashion brands, including advertising done by influencers (Proposal for a law aiming to reduce the environmental impact of the textile industry), was adopted by the National Assembly on first reading on March 14, 2024.

    Lastly, the law of June 9, 2023, has been criticized by the European Commission, which considers that the law would contravene certain principles provided by EU law, notably the principle of “country of origin,” according to which the company providing a service in other EU countries is exclusively subject to the law of its country of establishment (principle initially provided for by the E-commerce Directive of June 8, 2000, and included in the DSA). Some of its provisions, particularly those concerning the application of French law to foreign influencers, could therefore be subject to forthcoming – and welcome – modifications.

    Summary

    To avoid disputes with important suppliers, it is advisable to plan purchases over the medium and long term and not operate solely on the basis of orders and order confirmations. Planning makes it possible to agree on the duration of the ‘supply agreement, minimum volumes of products to be delivered and delivery schedules, prices, and the conditions under which prices can be varied over time.
    The use of a framework purchase agreement can help avoid future uncertainties and allows various options to be used to manage commodity price fluctuations depending on the type of products , such as automatic price indexing or agreement to renegotiate in the event of commodity fluctuations beyond a certain set tolerance period.

    I read in a press release: “These days, the glass industry is sending wine companies new unilateral contract amendments with price changes of 20%…”

    What can one do to avoid the imposition of price increases by suppliers? 

    • Know your rights and act in an informed manner
    • Plan and organise your supply chain

    Does my supplier have the right to increase prices?

    If contracts have already been concluded, e.g., orders have already been confirmed by the supplier, the answer is often no.

    It is not legitimate to request a price change. It is much less legitimate to communicate it unilaterally, with the threat of cancelling the order or not delivering the goods if the request is not granted.

    What if he tells me it is force majeure?

    That’s wrong: increased costs are not a force majeure but rather an unforeseen excessive onerousness, which hardly happens.

    What if the supplier canceled the order, unilaterally increased the price, or did not deliver the goods?

    He would be in breach of contract and liable to pay damages for violating his contractual obligations.

    How can one avoid a tug-of-war with suppliers?

    The tools are there. You have to know them and use them.

    It is necessary to plan purchases in the medium term, agreeing with suppliers on a schedule in which are set out:

    • the quantities of products to be ordered
    • the delivery terms
    • the durationof the agreement
    • the pricesof the products or raw materials
    • the conditions under which prices can be varied

    There is a very effective instrument to do so: a framework purchase agreement.

    Using a framework purchase agreement, the parties negotiate the above elements, which will be valid for the agreed period.

    Once the agreement is concluded, product orders will follow, governed by the framework agreement, without the need to renegotiate the content of individual deliveries each time.

    For an in-depth discussion of this contract, see this article.

    • “Yes, but my suppliers will never sign it!”

    Why not? Ask them to explain the reason.

    This type of agreement is in the interest of both parties. It allows planning future orders and grants certainty as to whether, when, and how much the parties can change the price.

    In contrast, acting without written agreements forces the parties to operate in an environment of uncertainty. Suppliers can request price increases from one day to the next and refuse supply if the changes are not accepted.

    How are price changes for future supplies regulated?

    Depending on the type of products or services and the raw materials or energy relevant in determining the final price, there are several possibilities.

    • The first option is to index the price automatically. E.g., if the cost of a barrel of Brent oil increases/decreases by 10%, the party concerned is entitled to request a corresponding adjustment of the product’s price in all orders placed as of the following week.
    • An alternative is to provide for a price renegotiation in the event of a fluctuation of the reference commodity. E.g., suppose the LME Aluminium index of the London Stock Exchange increases above a certain threshold. In that case, the interested party may request a price renegotiationfor orders in the period following the increase.

    What if the parties do not agree on new prices?

    It is possible to terminate the contract or refer the price determination to a third party, who would act as arbitrator and set the new prices for future orders.

    Leopoldo Pagotto

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      How real estate tokenisation works, what is the regulatory framework, and what rights investors actually acquire?

      Real estate tokenisation, already present in Spain for several years, is no longer a futuristic promise but a tangible reality in the Spanish market. It represents more than just a technological innovation: it signifies a profound transformation in how we understand ownership, investment, and liquidity within the real estate sector — one of the most traditional and tightly regulated areas of our economy.

      What is real estate tokenisation and how does it work?

      In essence, to tokenise a property today means converting the economic rights associated with that asset into digital units that can circulate on blockchain-based platforms. Each token represents a fraction of those economic rights, allowing investors with more modest capital to access a market that has traditionally required substantial investments.

      The role of smart contracts

      Tokens operate through smart contracts that automatically execute the distribution of rental income or resale proceeds of that partial representation of the property, including any potential difference in value, eliminating intermediaries and providing transparency to the process. This automation is not merely cosmetic: it reduces operational costs, speeds up transactions, and potentially increases the liquidity of assets that have historically been among the least liquid in the market.

      The legal reality: what is actually tokenised in Spain

      It is essential to clarify from the outset a key point often blurred by marketing discourse: in practice, real estate tokenisation projects in Spain do not tokenise the property itself but rather the economic rights linked to a corporate vehicle (usually a special purpose vehicle, or SPV) that owns the property. Spanish law only allows the tokenisation of shares in joint-stock companies (sociedades anónimas) using distributed ledger technology; shares in limited liability companies (sociedades limitadas) cannot be tokenised. This means that if the SPV is a limited liability company, its shares cannot be directly tokenised — only other instruments such as participative loans or credit rights over income streams can be represented as tokens. Only if the SPV is incorporated as a joint-stock company is it legally possible to tokenise its shares.

      What rights does a real estate token investor actually acquire?

      An investor who acquires a token does not become a direct co-owner of the property. Depending on the structure chosen, they may become a shareholder in a tokenised joint-stock company that owns the property or a holder of economic rights derived from participative loans or other indirect forms of economic participation issued by the SPV that owns the asset. The distinction is crucial: if the company faces solvency issues or bankruptcy, the value of the token collapses with it, and the investor cannot exercise any direct real rights over the property.

      Spanish law, rooted in centuries of land registry tradition, does not currently allow the transfer of real property rights through the mere transfer of tokens; a public deed and registration are required for the transfer to be effective against third parties. The SPV structure is therefore a compromise between technological possibilities and the demands of the current legal framework.

      Regulatory framework for real estate tokenisation in Spain

      CNMV authorisation and the 2023 Securities Market Law

      The Spanish regulator has begun to establish a legal foundation for this technology to develop within a secure framework. In 2023, the Spanish National Securities Market Commission (CNMV) authorised Adventurees Capital PFP as the first crowdfunding platform to issue tokenised securities — a milestone in the convergence of crowdfunding and blockchain. This authorisation was accompanied by the approval of Law 6/2023 on the Securities Market, which expressly recognises the representation of transferable securities through distributed ledger technologies such as blockchain, granting them full legal validity.

      The role of the Land Registry in the blockchain era

      In parallel, the Spanish Association of Land Registrars is exploring how to integrate blockchain technology into the registry system, although it is important to clarify the real scope of these initiatives. Current projects focus mainly on complementary applications such as digital management of the Building Book or improved traceability and accessibility of registry information. They do not aim to replace the fundamental pillars of the system: execution of public deeds before a notary and registration of ownership, which remain absolutely mandatory for the transfer of real rights over property. Registrars are firm in their institutional stance: blockchain can complement and streamline document management, but it cannot replace the legal control exercised by the registrar or the protection of third parties offered by the Land Registry — both essential components of the Spanish legal system. This position reflects the current limitation of the model: tokens circulate on the blockchain representing positions in SPVs or economic rights over them, but the actual ownership of the property remains anchored in the traditional registry system, held by the corporate vehicle, and any transfer of that ownership must still follow the conventional legal process with all its guarantees.

      European regulation: ECSPR, MiCA and the DLT Pilot Regime

      Spain also benefits from a European regulatory framework that is positioning the EU as a global leader in digital asset regulation. The European Crowdfunding Service Providers Regulation (ECSPR) harmonises the rules for crowdfunding platforms, allowing an authorised platform in one Member State to operate across the EU through the so-called “European passport”. The MiCA Regulation, which came fully into force on 30 December 2024, broadly regulates crypto-asset markets, setting obligations for both issuers and service providers. The DLT Pilot Regime (EU Regulation 2022/858) allows market infrastructures based on distributed ledger technology to operate under certain temporary exemptions, creating a controlled testing environment to assess the potential of these technologies in financial markets.

      The Spanish regulator’s approach could be described as cautiously supportive: innovation is encouraged, but strict compliance with anti-money laundering, customer identification, and disclosure obligations is required to protect investors. This is not technological laissez-faire, but rather an effort to integrate innovation within a solid framework of legal guarantees.

      Legal challenges and risks of real estate tokenisation

      The risks of the SPV structure

      The legal challenges that remain are significant and deserve attention. The SPV structure, while legally viable, introduces an additional layer of complexity and risk that must be clearly communicated to investors. Unlike direct ownership — where the investor holds real rights over the property enforceable against third parties — in the current tokenised model, investors hold positions in indirect forms of economic participation (shares, participative loans, credit rights) linked to the company that owns the property. This has important implications for corporate liability, taxation, and insolvency protection.

      The disconnect between the on-chain and off-chain worlds

      It is also essential to understand that the connection between the “on-chain” world (where tokens circulate) and the “off-chain” world (where property rights are recorded) is neither direct nor automatic. Transferring a token does not in itself alter the Land Registry: ownership of the property remains with the SPV regardless of who holds the tokens, and only a duly notarised and registered deed can change that ownership. The exploratory projects of the Land Registrars aim to improve efficiency in information management but do not alter this fundamental principle. As in any emerging market, it is essential to prevent fraudulent schemes that promise unrealistic returns or market tokens without proper legal backing.

      Practical implications for investors and legal practitioners

      For legal practitioners, real estate tokenisation may require adapting contracts, corporate bylaws, and financing structures to an environment where rights circulate digitally and in a decentralised manner. For investors, it offers an opportunity to diversify portfolios with smaller capital contributions and greater liquidity potential than traditional real estate investment, provided they understand that they are not acquiring direct ownership of the property but rather a financial position linked to the corporate structure that owns it. And for the wider economy, it could invigorate a real estate market worth trillions of euros by facilitating the entry of retail capital previously excluded from such investments.

      The future of real estate tokenisation in Spain

      This is an evolution that combines law, technology, and finance in an inseparable way. It is essential to understand that tokenisation is not a passing trend but a tool that, when properly used and regulated, can transform access to one of society’s most valuable assets — property. However, this transformation currently operates through intermediate corporate structures and indirect forms of economic participation, not through direct ownership as commercial language sometimes suggests. It certainly does not imply an immediate revolution of Spain’s land registration system, whose fundamental guarantees remain intact.

      It is quite common for business relationships with agents or distributors to last for years without any signed documents. And be careful, because we know that a contract can exist even verbally.

      The absence of a written contract will add difficulties in the event of a possible claim, so what you do between the decision to terminate, and the moment of the claim is very important. Remember: ‘anything you write will be used against you’.

      The decision to terminate a business relationship is a very delicate moment to which, for some reason, solicitors are not invited. Here are some examples (all real) in which companies or employees with the best of intentions wrote to the agent/distributor. All of them were subsequently very damaging to the company:

      Saying ‘We are terminating our business relationship’ when the strategy will be to argue that no such business relationship exists, but rather that there are separate and linked contracts (e.g., supply rather than ongoing distribution contract; very significant compensation consequences).

      ‘You no longer represent our company’, which may be evidence that you did so before.

      ‘As of day X, you may no longer act on behalf of our company,’ which would prove that you were previously able to act on its behalf.

      ‘You may not attend the X trade fair on our behalf.’ A way of confirming that the agent/distributor’s responsibilities included participating in trade fairs and probably accrediting the customers obtained.

      ‘The sales you promoted have been significantly reduced in year N.’ When there is no written contract or other form of documentation, imputing a breach of an obligation that is not clear can be counterproductive.

      Saying ‘You are not actively promoting our products’ and then adding: ‘We urge you to stop promoting the sale of our products’.

      ‘You are no longer our exclusive representative’, which proves a type of relationship (representation/agent) and a tacit or express agreement (‘exclusivity’).

      ‘We have appointed another representative in your area’, which shows that the agent/distributor had an assigned area and was “representing”.

      ‘From this moment on, orders will be handled by X’, which also confirms a type of relationship.

       

      In summary: from the moment the company considers terminating a commercial relationship, especially when it is not in writing and before sending any letter, it is advisable to think carefully about the strategy in case of a possible claim. This is the best time to seek advice and avoid surprises. Any communication that is not in line with this strategy designed from the outset can only lead to confusion and problems.

      Since the General Data Protection Regulation (GDPR) took effect in 2018, the European Union (EU) has granted adequacy status to only a limited number of jurisdictions — those whose data protection regimes are deemed to provide an “essentially equivalent” level of protection to that of the EU. The current list includes Andorra, Argentina, Canada (under PIPEDA), Faroe Islands, Guernsey, Isle of Man, Israel, Japan, Jersey, New Zealand, South Korea, Switzerland, Uruguay, the United Kingdom, and the United States (limited to companies certified under the Data Privacy Framework).

      As of 5 September 2025, Brazil is on the verge of joining this exclusive group. The European Commission has issued a draft adequacy decision concluding that the Brazilian General Data Protection Law (Lei Geral de Proteção de Dados Pessoais – LGPD), in conjunction with Brazil’s broader legal and constitutional framework, offers protections that are essentially equivalent to those found in the GDPR. While Brazil’s rules offer somewhat more flexibility in specific areas of data processing, the foundational principles and safeguards are well-aligned with EU standards.

      Once finalized, the adequacy decision will authorize the free flow of personal data from the EU to Brazil without the need for additional contractual clauses or technical safeguards. Such a development is not just regulatory — it also answers a core political argument made by LGPD advocates since its inception: that the absence of a comprehensive data protection framework was undermining Brazil’s international competitiveness by limiting data flows and discouraging investment. For businesses, the EU decision may finally mean the removal of a significant layer of compliance complexity — a development especially welcome by small and medium-sized enterprises engaged in cross-border trade or service provision. The draft is currently under review by the European Data Protection Board (EDPB) and the Member States of the EU.

      The Commission’s assessment highlights several key aspects of Brazil’s data protection landscape. It begins by noting that the Brazilian Constitution expressly guarantees the right to privacy and the protection of personal data — a notable distinction among non-EU jurisdictions. These protections are further supported by Brazil’s ratification of the American Convention on Human Rights and its recognition of the jurisdiction of the Inter-American Court of Human Rights, reinforcing a commitment to fundamental rights and democratic oversight.

      The LGPD mirrors the GDPR in many critical respects and defines its territorial scope clearly. It applies to: (i) data processing carried out within Brazilian territory, (ii) the offering of goods or services to individuals in Brazil, and (iii) data collected in Brazil, even if subsequently processed abroad. This aligns well with the extraterritorial provisions of the GDPR. The definitions of personal data, sensitive data, controller, and processor are materially similar, as are the key principles governing processing — including lawfulness, purpose limitation, data minimization, accuracy, transparency, and security. The law expressly excludes anonymized data from its scope and establishes specific exemptions for journalistic activities, public security, and scientific research.

      Another strength is Brazil’s institutional framework. The National Data Protection Authority (ANPD) was recently transformed into an autonomous regulatory agency, enhancing its independence and technical capacity. The ANPD holds both regulatory and enforcement powers: it can issue binding regulations, impose administrative sanctions, and publish authoritative guidance. To date, it has issued key guidelines on topics such as consent, legitimate interest, the role of the Data Protection Officer (DPO), and security incident reporting. Internationally, the ANPD is an active participant in global data protection dialogue — it is a member of the Global Privacy Assembly and an official observer to the Council of Europe’s Convention 108.

      The LGPD’s approach to international data transfers is also structurally aligned with the GDPR. It requires appropriate safeguards such as standard contractual clauses, allows for future adequacy decisions under a regime comparable to Article 45 of the GDPR, and includes detailed provisions for onward transfers and transit data — that is, data merely passing through Brazil without further processing. The rights of data subjects are robust and familiar to European practitioners: access, rectification, erasure, portability, and withdrawal of consent are guaranteed. Lawful bases for processing are also aligned — including consent, legal obligations, contract execution, and legitimate interest. Notably, the LGPD requires a documented balancing test when relying on legitimate interest, bringing additional accountability to this flexible legal basis.

      Security incidents involving personal data must be notified to both the ANPD and affected data subjects when there is a significant risk of harm. The standard notification deadline is 72 hours, and the required content aligns closely with Articles 33 and 34 of the GDPR. The ANPD may also order public disclosure of incidents or require remedial measures, depending on the nature and scope of the breach.

      Importantly, this process is not one-sided. In parallel to the European Commission’s adequacy decision, the ANPD is conducting its own adequacy assessment of the EU and EEA data protection frameworks. This process is regulated by the Brazilian Resolution CD/ANPD No. 19/2024, which governs international data transfers. Once the technical and legal evaluation is complete, the ANPD’s Board of Directors will issue a formal decision. This reciprocal move reflects Brazil’s commitment to mutual recognition and regulatory symmetry — a positive signal for companies on both sides of the Atlantic.

      In conclusion: If confirmed, Brazil’s adequacy status will simplify international operations, reduce compliance costs, and expand opportunities for data-driven business and legal cooperation. For European lawyers advising SMEs with interests in Latin America, this development is a strategic signal: Brazil is emerging not just as a growing market, but as a legally compatible and data-safe jurisdiction for international partnerships.

      Remember the USA – EU agreement on 15% tariffs? I wrote that with a negotiator like Trump the game is never over (article here) and—after the recent interlude featuring a threat of 100% tariffs on pharmaceuticals—the U.S. government has announced the imposition of an overall 107% duty on Italian pasta, which could take effect on January 1, 2026.

      Where this new duty comes from

      The antidumping investigation was launched by the U.S. Department of Commerce at the request of certain competing American companies and is based on a 1996 antidumping order that allows for periodic reviews of imports of Italian pasta. The Department of Commerce conducts these checks annually to assess whether Italian producers are selling pasta at prices lower than the U.S. domestic market, a practice known as “dumping.”

      Companies involved in the investigation

      The Department of Commerce selected two sample companies for in-depth analysis, defined as “mandatory respondents”: La Molisana and Pastificio Lucio Garofalo. According to the official document published by the U.S. administration, for the period from July 1, 2023 to June 30, 2024, both companies allegedly sold their products below market prices, resulting in the imposition of a duty of 91.74%.

      U.S. authorities justified this percentage by claiming the two companies did not provide complete or compliant information as requested by the Department and were therefore insufficiently cooperative during the investigation. What is very important is that, in addition to the two companies directly examined, the additional 91.74% duty is also applied to numerous other Italian producers not individually reviewed. This methodology, while formally permitted under U.S. law as an exception, is being applied without any direct verification of the other companies.

      Next steps in the procedure

      Italy’s Ministry of Foreign Affairs moved immediately, formally intervening in the proceeding as an “interested party” through the Italian Embassy in Washington. The Foreign Ministry is working in close coordination with the companies concerned and, in concert with the European Commission, to persuade the U.S. Department to revise the provisional duties.

      The two companies involved (La Molisana and Garofalo) can submit documentation to contest the dumping allegations. However, if dumping is confirmed, the Department of Commerce will instruct Customs to apply antidumping duties on goods sold and entered into U.S. commerce.

      The preliminary nature of this determination means there is still room to change the decision before it becomes final.

      Possible effective date

      The new super-duty of 91.74%, which will be added to the existing 15% tariff for a total of 107%, is scheduled to take effect on January 1, 2026. This date therefore represents a crucial deadline for all ongoing diplomatic and legal actions.

      If confirmed, the economic impact would be significant: in 2024, Italian pasta exports to the United States reached a value of €671 million according to Coldiretti, accounting for nearly 17% of the sector’s total exports. A 107% duty would risk seriously undermining competitiveness in one of the most important markets for Italian agri-food products.

       What to do between now and January 1, 2026?

      At this stage, the entry into force of the new duty depends on the outcome of the ongoing procedure: given what has happened in recent months, and the political use the U.S. administration has made of tariffs—well beyond their technical function—it is reasonable to be pessimistic.

      So, what to do? In recent months we have seen companies react to the uncertainty over the fate of the tariffs in three ways:

      • Some rushed to ship as many products as possible before the potential effective date of the duty;
      • Some granted—upfront—discounts equivalent to the threatened duty, in case it came into force;
      • Some suspended orders, pending definitive news on the impact of the duties.

      These are all  valid options, but other effective tools for managing the uncertainty caused by the flurry of announcements, negotiations, and threats from the U.S. administration should not be forgotten: the risk of new duties being introduced, or existing ones being increased, can be managed in the contract by agreeing with the U.S. importer how any tariff change will affect the product.

      The parties can stipulate, for example, that the increase will be split equally; or that the importer will bear it beyond a certain threshold; or that if the duty exceeds a certain level, the contracts may be terminated. You can find a deeper dive in this article.

      The only certainty is that trade relations with the U.S. will stay unpredictable for a long time, and it’s vital to carefully manage the risk factors involved in selling products there. Right now, the focus is on tariffs and prices, and I encourage you to take this chance to thoroughly review existing agreements and assess whether—and how—other important points are addressed that could entail significant liabilities: we discuss them, very practically, in this book.

      A dedicated notary account in Brazil is a legal mechanism that brings greater security, transparency, and reliability to financial transactions. Regulated under Law 8.935/1994 and Provision No. 197/2025, this service allows notaries to receive, manage, and release funds only after contractual conditions have been fulfilled. By ensuring segregation of assets, traceability, and impartial oversight, dedicated notary accounts provide an effective escrow-like solution for real estate deals, mergers and acquisitions, import/export operations, high-value asset purchases, and complex commercial contracts. This tool not only reduces legal risks and potential disputes but also strengthens trust between parties by guaranteeing that payments are safeguarded until obligations are met.

      The legal basis can be found in Law 8.935/1994, § 1 of art. 7-A, which allows notaries to receive, deposit, and manage amounts related to legal transactions, with transactions subject to objectively verifiable facts/conditions. Provision No. 197, dated June 13, 2025, regulates, at the national level, the service of notarial accounts linked to Notary Public Offices.

      Practical applications: among others, in the following transactions:

      • Real estate: guarantee that the down payment and settlement amounts will be secured in a specific account. This mitigates the risk of misappropriation of funds and ensures that the money will be released only after all contractual conditions have been met.
      • M&A: the linked notarial account creates a standardized escrow mechanism for the payment of price/holdbacks/earn-outs and conditional obligations.
      • Purchase and Sale of High-Value Movable Property: the linked account can be used to guarantee payment. The buyer deposits the amount and the seller knows that the money is safe, being released only after the transfer of ownership and delivery of the goods.
      • Import and Export: the transaction amount can be deposited with the notary and released to the exporter only after confirmation of delivery of the goods in the destination country, for example.
      • Guarantee of Obligations: In any contract that provides for the payment of a sum of money as a guarantee, the notary account can be used to provide greater security to the parties.
      • Supply, EPC/turnkey, and construction contracts: performance retentions, milestone acceptance (commissioning, as-built, issuance of ART/CREA), and payment against formal acceptance.
      • Contractual joint ventures and commercial partnerships: advances conditional on licenses, authorizations, or competitive approval, where applicable.

      Reduction of Legal Risks: The use of linked accounts reduces the chances of litigation related to lack of clarity about the origin and destination of funds. Companies can clearly demonstrate that payments were made and held by an impartial and secure institution.

      Operational structure: limited to banking entities affiliated with the CNB, which must ensure the segregation of assets, traceability through audit trails, and proof of all transactions. The authorization of the delegate requires prior accreditation and electronic registration of the essential details of the transaction and its conditions in the CNB system, with access restricted to the parties and the notary.

      Specific Purpose: amounts received as payment, guarantee, or advance payment as a result of notarial acts must be deposited in a bank account linked to the specific act and may only be moved for the purpose for which they are intended.

      Transparency and Traceability: With the linked notarial account, it is possible to clearly track the financial flow of each transaction, which increases transparency for all parties and for supervisory bodies.

      Verification of conditions and release. Once the objective conditions have been met, the notary authorizes the transfer to the recipients and files the proof of verification. In the event of a dispute between the parties, the notary suspends any movement, draws up a notarial deed, and advises on a consensual or judicial solution, without deciding on the effectiveness/termination of the transaction; if the transaction is frustrated and no solution is found, the procedure is terminated and the amounts are returned to the depositor, in accordance with the agreed clauses.

      Confidentiality and access. In transactions with a confidentiality clause, the notary public maintains confidentiality and does not issue certificates regarding the content of the transaction; documents are accessible only for correctional purposes or by court order.

      Remuneration and costs. The notary’s remuneration for the notarial account service is paid by the financial institution under the terms of the agreement, and the transfer of additional costs to the user is prohibited, without prejudice to fees for any related notarial acts.

      Article 442-1.II of the French Commercial Code (former Article L. 442-6.I.5 °) sanctions the termination by a trader of a written contract or an informal business relationship without giving sufficient written prior notice. Over the last twenty years, this article became the recurring legal basis for all compensation actions (up to 18 months of gross margin, plus other damages) when a commercial relationship or a contract ends (totally or even partially).

      Therefore, a foreign trader who contracts with a French company should try not to fall under the aegis of this rule (part I) and, if it cannot, should understand and control its implementation (part II).

      In a nutshell:

      How can a foreign company avoid or control the risk linked to the “sudden termination of commercial relations” set by French law? Foreign companies doing business with a French counterpart should:

      • enter, as soon as possible, into a written (frame) agreement with their French suppliers or customers, even for a very simple relation and;
      • stipulate a clause in favour of foreign court or arbitration and foreign applicable law while, failing to choose it, they would rather be subject to French courts and laws;

      How can a foreign company master the risk linked to the “sudden termination of commercial relations” set by French law? Foreign companies doing business with a French counterpart should:

      • know that this article applies to almost all type of commercial relationship or contracts, whether written or not, fixed-term or not;
      • check whether its relation/contract is sufficiently long, regular and significant and whether the other party has a legitimate belief in the continuation of this relation/contract;
      • give a written notice of termination or non-renewal (or even of a major modification), which length takes mainly into account the duration of the relation, irrespectively of the length of the contractual notice;
      • invoke, with cautiousness, force majeure and gross negligence of the party, to set aside “sudden termination”;
      • anticipate, in case of insufficient notice, a compensation which amount is the product of the average monthly gross margin per the length of non-granted prior notice.

      How to avoid the application of the French “Sudden Termination” rule?

      In international matters, a foreign company must anticipate whether its relationship will be subject or not to French law before terminating a contract or a business relationship and, in case of dispute, whether it will be brought before a French court or not.

      What will be the law applicable to “Sudden Termination”?

      It is quite difficult for a foreign company to correctly grasp the French legal framework of conflict of laws rules applicable to “sudden termination”. In a ruling of September 19, 2018 (RG 16/05579, DES/ Clarins), the Court of appeal of Paris made, by an implicit reference to the Granarolo EU ruling (07 14 16, N°C196/15) an extension of the contractual qualification to most of the business relationships which will improve foreseeability in order for a foreign company to try to exclude French law and its “sudden termination” rule.

      Sudden termination of a written contract or of a “tacit contractual relationship”

      According to Rome I Regulation (EC No 593/2008, June 17 2008) on the law applicable to contracts:

      – In case of choice of a foreign law by the parties: The clause selecting a foreign applicable law will be valid and respected by French judges (subject to OMR, see below), provided that the choice of law by the parties is express or certain.

      – In case of no choice by the parties: French law will likely to be declared applicable as it might be either the law of the country where is based the distributor/franchisee, etc. or the law of the country where the party who is to provide the service features of the contract has its domicile.

      Sudden termination of a “non-tacit contractual relationship”

      In case of informal relationship (i.e. orders placed from time to time), French judges would retain the tort qualification and will refer to the Rome II Regulation (No 864/2007, July 11 2007) on the law applicable to non-contractual obligations..

      – In case of choice of a foreign law by the parties: a properly drafted choice of foreign law clause should be implemented by a French judge, provided that it expressly includes tort cases.

      – In case of no choice of law by the parties: French law will likely to be declared applicable as it might be the law of the country where the damage occurs (regardless of the place of the causing event or that of the indirect consequences), which is the place of the head office where the French victim suffers the consequences of the termination.

      “Sudden Termination” rule, a French Overriding Mandatory Rule?

      The position of French courts is quite vague and unsatisfactory, and this has been the case for a long time. To make it short: the Commercial Court of Paris judges that “sudden termination” is not an OMR, the Court of appeal of Paris (sole French appellate court in charge of “sudden termination” cases) is also not in favour of the OMR qualification on the grounds that the text “protects purely private economic interests” (CA Paris, pôle 5, ch. 5, Feb 28. 2019, n° 17/16475 / CA Paris, pôle 5, ch. 5, Oct 8. 2020, n°17/19893). Recently, the Paris Court of Appeal reaffirmed that the rules on sudden termination of established commercial relations are not an OMR (Court of appeal Paris, March 11, 2021, n° 18/03112).

      The French Supreme Court has never explicitly addressed the issue (OMR or not OMR). Indeed, the French Supreme Court ruled in the Expedia case (Cass. com., July 8, 2020, n°17-31.536) that the provisions of the former article L. 442-6, I, 2º and II, d), about “significant imbalance” (which is in the same set of rules than “Sudden termination”) are OMR. However, this qualification should be limited to the specific action brought by the Ministry of Finance and not be applicable to an action by a private party. Moreover, some courts may be tempted to invoke the provisions of French law n°2023-221 (March 30, 2023, aka Egalim III) to qualify Sudden termination rule as an OMR, however this text (article L 444-1.A Commercial code) does not quote expressly OMR and set no justification whatsoever to set such a qualification.

      Consequently, if a claim for “sudden termination” is brought to a French court, there is still a  risk that the latter would exclude the applicable foreign law and replace it with the regime resulting from the “sudden termination” of Article L 442-1. II. However, to avoid this risk, a foreign company would better not only choose a foreign governing law but also stipulate that the dispute will be brought before a foreign judge or an arbitral tribunal.

      How to avoid jurisdiction of French court over a “Sudden Termination” claim?

      “Sudden Termination” claim and intra EU co-contractor

      The ECJ ruling (Granarolo, July 14, 2016, N°C196/15) created a distinction between claims occurring from:

      – written framework contract or tacit contractual relationship (existing only if the body of evidences listed by the ECJ are identified by national judges, i.e. length of relation and commitments recognized to each other, such as exclusivity, special price or terms of delivery or payment, non-competition, etc.): such claim has a contractual nature according to conflict of jurisdiction rules under Brussels I recast Regulation;

      – informal relationship which is a non–tacit contractual relationship (i.e. orders placed from time to time): such a request has a tort nature under Brussels I recast ;

      To be noted: the so-called Egalim III law has no impact on the EU rules on jurisdiction clauses.

      (a) Who is the Judge of the “sudden termination” of a written contract or of a “tacit contractual relationship”?

      – Jurisdiction clause for the benefit of a foreign court will be enforced by French courts, even though it is an asymmetrical clause (Court of cassation, October 7, 2015, Ebizcuss.com / Apple Sales International).

      – In case of lack of choice of court clause, French courts are likely to have jurisdiction if the French claimant bringing a case based on “sudden termination» is the service provider, such as distributor, agent, etc. (see ECJ Corman Collins case, 19 12 13, C-9/12, and article 7.1.b.2 of Brussels I recast°).

      (b) Who is the Judge of the “sudden termination” of a “non- tacit contractual relationship”?

      – We believe that French courts may continue to give effect to a jurisdiction clause in tort case, especially when it expressly encompasses tort litigation (Court of cassation, 1° Ch. Civ., January 18, 2017, n° 15-26105, Riviera Motors / Aston Martin Lagonda Ltd).

      – In case of lack of choice of court clause, French courts will have jurisdiction over a “sudden termination” claim as the judge of the place where the harmful event occurred (art. 7.3 of Brussels I recast), which is the place where the sudden termination has effect…i.e. in France if the French company is the victim.

      “Sudden Termination” claim and Non-EU co-contractor

      The Granarolo solution will not ipso facto apply if a French victim brings a claim to French courts, based on a “sudden termination” made by a non-EU company. In non-EU relations, French judges could continue to retain only the tort qualification. In such a case, French courts may keep their jurisdiction based on the place where the harmful event occurs.

      Jurisdiction clause to a foreign court may be recognized in France (even for tort-based claims), provided that this jurisdiction clause is valid according to either a bilateral international convention or to the Hague Convention of 30 June 2005 on choice of court agreements. Otherwise, according to Egalim III law, imperative jurisdiction might be attributable to French courts.

      “Sudden Termination” claim and arbitration

      Stipulating an ad hoc or institutional arbitration clause is probably the safest solution to avoid the jurisdiction of French courts. Ideally, the clause will fix the seat of the arbitral tribunal outside France. According to the principle of competence-competence of the arbitrators, French courts declare themselves incompetent, unless the arbitration clause is manifestly void or manifestly inapplicable, regardless of contract or tort ground (see, in particular, Paris Court of Appeal, 5 September 2019, n°17/03703). The so-called “Egalim III” law has no impact on arbitration clauses.

      Conclusion: Foreign companies should not leave open the Jurisdiction and governing Law issues. They must negotiate a safe harbour, otherwise a French victim of a termination will likely to be entitled to bring a “sudden termination” claim in front of French judges (see what happen below in Part 2)

      How to master the “Sudden Termination” French rules?

      When French law is applicable, the foreign company will face the legal regime of article L442 -1.II of the French Commercial Code sanctioning “sudden termination”. As a preliminary remark, it is important to know, above all, that the implementation of the liability for “sudden termination” is the consequence of the lack of a notice or a too short notice. Thus, this scheme does not lay down an automatic compensation rule. In other words, as soon as reasonable notice is given by the author of the termination, liability on that basis can be dismissed.

      The prerequisite for “Sudden Termination”: an established commercial relationship

      All contracts are covered by this legal regime, except for contracts whose regulations provide for a specific notice of termination, like commercial agency contracts and transport of goods by road subcontracts.

      First, there must be a relationship that can be proven by a written contract or de facto, by behaviour of the parties. Article L.442-1 II of the French Commercial Code covers all “commercial” relationships and not only “contractual ones so that such relationship may be based on a succession of tacitly renewed contracts or a regular flow of business, materialized by multiple orders. This was recently recalled by the Supreme Court (Supreme Court, February 16, 2022, n° 20-18.844)

      Second, this relationship must have an established character. There is no legal definition, but this notion has been defined year after year by case law which has established an objective criterion and a more subjective one.

      (a) The objective criterion implies a sufficiently long, regular and significant relationship between the two parties. The duration of the relationship is the most important criterion. The relationship must also be regular, that is, it must not have been interrupted (too often or too long). The relationship must ultimately be meaningful and represent a serious flow of business between the parties, in volume or value.

      (b) The subjective test focuses primarily on the legitimate belief of the victim of the rupture in the continuation of the contract / the relationship that is based on factual elements, such as investment requests, budgets over several years, etc. Conversely, it is on the basis of the finding of a lack of legitimate belief in a common future that the terminating party can prove the absence of a stable character when he has resorted, on several occasions, a call for tenders (unless it is a trick).

      Anticipating a “Sudden Termination” claim

      (a) The termination may be total or partial

      The total rupture is materialized by a complete stop of the relations, for example ending the contract, stopping the sending of orders by the purchaser or the recording of orders by the supplier.

      The Supreme Court recently recalled that a significant drop in sales with a partner must be considered as a partial rupture of the relationship (February 16, 2022, n° 20-18.844, cited above). But the most complicated situation to deal with is the so-called partial rupture that will be deduced from a modification of elements that partly impacts the relationship but does not reduce it to nothing (ex.: a price increase or decrease, a change in the terms of payment or delivery).

      (b) The termination must be subject to a reasonable written prior notice

      The notice must be notified in writing. The absence of written notice is already a breach in itself. The notification must clearly reflect the willingness of a party to sever the relationship in whole or in part, which must be clearly identified. The notification must also clearly identify the date on which the relationship will end.

      Thus, an ambiguity on the notice period (e.g if the termination of an agreement is notified, whilst offering to maintain certain prices and payment terms, in the meantime) is considered as an insufficient termination notice (French Supreme Court, January 29, 2013, n° 11-23.676).

      Parties must distinguish between the letter of formal notice for default and the subsequent notification of the breach, giving notice (if applicable). During the period of notice, parties must fully comply with all contractual conditions.

      This principle also applies to distribution contracts subject to specific French rules imposing annual or multi-year negotiation obligations. In fact, the Court of cassation has ruled that “when the conditions of the commercial relationship established between the parties are subject to annual negotiation, modifications made during the notice period which are not so substantial as to undermine its effectiveness do not constitute a brutal breach of that relationship” (Cass. com., Dec. 7, 2022, n° 19-22.538).

      However, it’s not necessary to mention the reasons why the commercial relationship is terminated is not a fault or breach of the relationship. In fact, French courts consider that “the fact that the given reason to terminate was false does not in any way present the terminating party from terminating the commercial relationship” (Versailles Court of Appeal, June 10, 1999).

      The duration of the prior notice to be respected is not defined by French law which did not pose precise rule until the reform 2019. If several criteria are stated by case law, it should be noted that the most important criterion is the duration of the relationship. Judges also take into account the share of turnover achieved by the victim, the existence or not of a territorial exclusivity, the nature of the products and the sector of activity, the importance of the investments made by the victim especially to the relationship in question, and finally the state of economic dependence. Economic dependence is defined as the impossibility for a company to have a solution that is technically and economically equivalent to the contractual relations it has established with another company. Case law considers this to be an aggravating factor justifying a longer termination notice.

      The minimum notice period must be notified at the time of notification of termination. As a consequence, events that affect the victim after the notification, both positively (conclusion of a new contract) and negatively (loss of another custome), will not be taken into account by the judge, at the time of ruling, when assessing the “brutality” of the termination.

      The length of the notice given by the judges is very variable. The appreciation of notice is made on a case-by-case basis. It is very difficult to give a golden rule, even though roughly for each year of relationship, a month’s notice might be due (to modulate up or down depending on the other criteria in the relationship). But way of illustration, however, the following case law may be cited:

      • Paris Court of Appeal , Feb.9, 2022: 16-year relationship with 15 months’ notice;
      • Paris Court of Appeal, Jan.20, 2022: 12-year relationship with 8 months’ notice;
      • Paris Court of Appeal, Oct. 25, 2022: 16-year relationship with 18 months’ notice;
      • Paris Court of Appeal , Feb. 23, 2022: 17-year relationship with 11 months’ notice;
      • Paris Court of Appeal, Sept. 21, 2022: 5-year relationship with 14 months’ notice.

      Since the Order of April 24, 2019, which limits the length of reasonable notice to a maximum of 18 months, if the notice period granted by a party is 18 months, it cannot be held liable for a sudden termination. However, much of the litigation remains uncertain, as only exceptionally long or particularly sensitive relationships led, prior to 019, to the award of more than 18 months’ notice. Ordinance of April 24, 2019, limits to 18 months the maximum period of notice reasonably due under Article L 442-1.II. But much of the litigation will remain uncertain since only relations of exceptional longevity or particularly sensitive, could have led to the allocation of a notice higher than 18 months.

      Judges are not bound by the contractual notices stipulated in the contract. But if the author of the breach also violated the terms and conditions of termination provided for by contract, the victim may seek the responsibility of the author both on the tort basis of the sudden rupture and also on the basis of the breach of a contractual obligation.

      Cases in which “Sudden Termination” is ruled out

      The legal regime provides for two cases, and the case-law seems to have imposed others.

      (a) The two legal exceptions are Force majeure (very rarely consecrated by the courts) and the fault of the victim of the termination, case-law having added that it must be a serious violation (“faute grave”) of a contractual commitment or a legal provision (such as non-respect of an exclusivity, a non-compete, a confidentiality or a change of control duty, or non-payment of amounts due contractually).

      The judges consider themselves, of course, not bound by a termination clause defining what constitutes serious misconduct. In any case the party who terminates for serious misconduct must clearly notify it in its letter of termination. Above all, serious misconduct leads to a lack of notice, therefore, if the terminating party alleges serious misconduct but grants notice, whichever it may be, judges may conclude that the fault was not serious enough.

      Thus, the seriousness of the misconduct must be motivated by judges in their rulings. Noting that the contract was breached after two formal notices is not sufficient (Cass. com., Feb 16. 2022, n° 20-18.844).

      However, the Court of Cassation considers that “even in the case of serious misconduct justifying the immediate termination of the commercial relationship, the other party remains free to give the other party a notice” (Cass. Com., Oct. 14 2020, n°18-22.119).

      (b) In recent years, case-law has added other cases of liability waiver. This is the case when the rupture is the consequence of a cause external to the author of the rupture, such as the economic crisis, the loss of its own customers or suppliers, upstream or downstream.

      For example, in 2021 the Court of cassation has ruled that “the business partner is not entitled to an unchanged relationship and cannot refuse any adaptation required by economic changes” (Com, Dec 01, 2021, n°20-19.113). In fact, to be attributable to an economic player, a termination must be free and deliberate. This is not the case if termination is imposed by the economic situation.

      However, adding a liability exemption clause in a contract, aimed at waiving destinated to escape the penalties of article L. 442-1, is without consequences on the judge’s appreciation.

      Judges have also excluded “sudden termination” in the hypothesis of the end of the first period of a fixed-term contract, whatever its duration is: the first renewal of a contract, constitutes a foreseeable event for the victim of the rupture, which excludes the very notion of brutality; but once the contract has been renewed at least once, judges can subsequently characterize the victim’s legitimate belief in a new tacit renewal.

      Compensation for “Sudden Termination”

      Judges only compensate for the detrimental consequences of the brutality itself of the breach but do not compensate, at least in the context of article L442 -1.II, for the consequences of the breach itself.

      The basic rule is very simple: it is necessary to determine the length of the notice which should have been granted, from which the notice actually granted is deducted. This net notice is multiplied by the average monthly gross margin of the victim, or more often the so called margin on variable costs (i.e. the turnover minus costs disappearing with non-performance of the contract/relation). Defendant should not hesitate to ask for the full accountancy evidences, especially to identify (lower) margin rates, or even for a judicial expertise on those accounting elements. In general, the base of the average monthly margin consists of the last 24 or 36 months.

      The compensation calculated on the average margin is, in general, exclusive of any other compensation. However, the victim can prove that it has suffered other losses as a consequence of the brutality of the rupture. Such as dismissals directly caused by this brutality or the depreciation of investments made recently by the victim.

      Some practical tips when considering to anticipate “Sudden Termination”

      Even though the legal regime is still ambiguous and the case-law terribly casuistic which prevents to release strong guidelines, here are some practical tips when a company plans to terminate a relationship / contract:

      • in the case of a fixed-term contract renewable tacitly, the notification of non-renewal must be anticipated well in advance of the beginning of the contractual notice in order to avoid being in a situation where it is necessary to choose between not renewing the contract with a notice that is not sufficient or agree to see the contract renewed itself for a new term;
      • commercial teams must be made aware of the risk of partial sudden termination when they change the conditions of execution of a commercial relationship / contract too radically;
      • in some cases, it may be useful to send a pre-notice of termination with a “notice proposal” in order to try to validate this notice with the other party;
      • it may also be useful, in certain relationships, to notify the end of the relationship with different lengths of notice depending on the nature of the product lines;
      • Finally, the best way is to conclude an end-of-relation protocol, fixing the duration of the notice as well as, if necessary, the progressive decline of the orders, the whole within the framework of a settlement agreement which definitively waives any claim, including “sudden termination”.

      Sudden termination regime shall be taken into consideration when entering into the final phase of a duration relationship: the way in which the contract (or de facto relationship) is terminated must be carefully planned, in order to manage the risk of causing damages to the counterparty and being sued for compensation.

      Given the significance of the influencer market (over €21 billion in 2023), which now encompasses all sectors, and with a view for transparency and consumer protection, France, with the law of June 9, 2023, proposed the world’s first regulation governing the activities of influencers, with the objective of defining and regulating influencer activities on social media platforms.

      However, influencers are subject to multiple obligations stemming from various sources, necessitating the utmost vigilance, both in drafting influence agreements (between influencers and agencies or between influencers and advertisers) and in the behaviour they must adopt on social media or online platforms. This vigilance is particularly heightened as existing regulations do not cover the core of influencers’ activities, especially their status and remuneration, which remain subject to legal ambiguity, posing risks to advertisers as regulatory authorities’ scrutiny intensifies.

       

      Key points to remember 

      • Influencers’ activity is subject to numerous regulations, including the law of June 9, 2023.
      • This law not only regulates the drafting of influence contracts but also the influencer’s behaviour to ensure greater transparency for consumers.
      • Every influencer whose audience includes French users is affected by the provisions of the law of June 9, 2023, even if they are not physically present in French territory.
      • Both the law of June 9, 2023, and the “Digital Services Act,” as well as the proposed law on “fast fashion,” foresee increasing accountability for various actors in the commercial influence sector, particularly influencers and online platforms.
      • Despite a plethora of regulations, the status and remuneration of influencers remain unaddressed issues that require special attention from advertisers engaging with influencers.

       

      The law of June 9, 2023, regulating influencer activity  

      The definition of influencer professions

      The law of June 9, 2023, provides two essential definitions for influencer activities:

      • Influencers are defined as ‘natural or legal persons who, for consideration, mobilize their notoriety with their audience to communicate to the public, electronically, content aimed at promoting, directly or indirectly, goods, services, or any cause, engaging in commercial influence activities electronically.’
      • The activity of an influencer agent is defined as ‘that which consists of representing, for consideration,’ the influencer or a possible agent ‘with the aim of promoting, for consideration, goods, services, or any cause‘ (article 7) The influencer agent must take ‘necessary measures to ensure the defense of the interests of the persons they represent, to avoid situations of conflict of interest, and to ensure the compliance of their activity‘ with the law of June 9, 2023.

       

      The obligations imposed on commercial messages created by the influencer

      The law sets forth obligations that influencers must adhere to regarding their publications: 

      • Mandatory particulars: When creating content, this law imposes an obligation on influencers to provide information to consumers, aiming for transparency towards their audience. Thus, influencers are required to clearly, legibly, and identifiably indicate on the influencer’s image or video, regardless of its format and throughout the entire viewing duration (according to modalities to be defined by decree):

        – The mention “advertisement” or “commercial collaboration.” Violating this obligation constitutes deceptive commercial practice punishable by two years’ imprisonment and a fine of €300,000 (Article 5 of the law of June 9, 2023).
        – The mention of “altered images” (modification by image processing methods aimed at refining or thickening the silhouette or modifying the appearance of the face) or “virtual images” (images created by artificial intelligence). Failure to do so may result in a one-year prison sentence and a fine of €4,500 (Article 5 of the law of June 9, 2023).

      • Prohibited or regulated promotions: This law reminds certain prohibitions, subject to criminal and administrative sanctions, stemming from French law on the direct or indirect promotion of certain categories of products and services, under penalty of criminal or administrative sanctions. This includes the promotion of products and services related to:

        – health: surgery, aesthetic medicine, therapeutic prescriptions, and nicotine products;
        – non-domestic animals, unless it concerns an establishment authorized to hold them;
        – financial: contracts, financial products, and services;
        – sports-related: subscriptions to sports advice or predictions;
        – crypto assets: if not from registered actors or have not received approval from the AMF;
        – gambling: their promotion prohibited for those under 18 years old and regulated by law;
        – professional training: their promotion is not prohibited but regulated.

       

      The accountability of influencer behaviour

      The law also holds influencers accountable from the contracting of their relationships and when they act as sellers:

      • Regulation of commercial influence agreements: This law imposes, subject to nullity, from a certain threshold of influencer remuneration (defined by decree), the formalization in writing of the agreement between the advertiser and the influencer, but also, if applicable, between the influencer’s agent, and the mandatory stipulation of certain clauses (remuneration, mission description, etc.).
      • Influencer responsibility as a cyber seller: Influencers engaging in drop shipping (selling products without handling their delivery, done by the supplier) must provide the buyer with all information in French as required by Article L. 221-5 of the Consumer Code about the product, such as its availability and legality (i.e., guarantee that the product is not counterfeit), applicable product warranty, and supplier identity. Additionally, influencers must ensure the proper delivery and receipt of products and, in case of default, compensate the buyer. Influencers are also logically subject to obligations regarding deceptive commercial practices (for more information, the DGCCRF website explain the dropshipping).

       

      The accountability of other actors in the commercial influence ecosystem

       

      Joint and several liability is set by law, for the advertiser, influencer, or influencer’s agent for damages caused to third parties in the execution of the commercial influence contract, allowing the victim of the damage to act against the most solvent party.

      Furthermore, the law introduces accountability for online platforms by partially incorporating the European Regulation 2022/2065 on digital services (known as the “DSA“) of October 19, 2022.

       

      French regulation and international influencers

       

      Influencers established outside the European Union (including also Switzerland and the EEA) who promote products or services to a French audience must obtain professional liability insurance from an insurer established within the EU. They must also designate a legal or natural person providing “a form of representation” (SIC) within the EU. This representative (whose regime is not very clear) is remunerated to represent the influencer before administrative and judicial authorities and to ensure the compliance of the influencer’s activity with law of June 9, 2023.

      Furthermore, according to law of June 9, 2023, when the contract binding the influencer (or their agency) aims to implement a commercial influence activity electronically “targeting in particular an audience established in French territory” (SIC), this contract should be exclusively subject to French law (including the Consumer Code, the Intellectual Property Code, and the law of June 9, 2023). According to this law, the absence of such a stipulation would be sanctioned by the nullity of the contract. Law of June 9, 2023, seems to be established as an overriding mandatory law capable of setting aside the choice of a foreign law.

      However, the legitimacy (what about compliance with the definition of overriding mandatory rules established by Regulation Rome I?) and effectiveness (what if the contract specifies a foreign law and a foreign jurisdiction?) of such a legal provision can be questioned, notably due to its vague and general wording. In fact, it should be the activity deployed by the “foreign” influencer to their community in France that should be apprehended by French overriding mandatory rules, rather than the content of the agreement concluded with the advertiser (which itself could also be foreign, by the way).

       

      The other regulations governing the activity of influencers

       

      The European regulations

      The DSA further holds influencers accountable because, in addition to the reporting mechanism imposed on platforms to report illicit content (thus identifying a failing influencer), platforms must ensure (and will therefore shift this responsibility to the influencer) the identification of commercial communications and specific transparency obligations towards consumers.

      The «soft law»

      As early as 2015, the Advertising Regulatory Authority (“ARPP”) issued recommendations on best practices for digital advertising. Similarly, in March 2023, the French Ministry of Economy published a “code of conduct” for influencers and content creators. In 2023, the European Commission launched a legal information platform for influencers. Although non-binding, these rules, in addition to existing regulations, serve as guidelines for both influencers and content creators, as well as for judicial and administrative authorities.

       

      The special status of child influencers

      The law of October 19, 2020, aimed at regulating the commercial exploitation of children’s images on online platforms, notably opens up the possibility for child influencers to be recognized as salaried workers. However, this law only targeted video-sharing platforms. Article 2 of the law of June 9, 2023, extended the provisions regarding child influencer labor introduced by the 2020 law to all online platforms. Finally, a recent law aimed at ensuring respect for the image rights of children was published on February 19, 2024, introducing a principle of joint and several responsibility of both parents in protecting the minor’s image rights.

       

      The status and remuneration of influencers: uncertainty persists

       

      Despite the diversity of regulations applicable to influencers, none address their status and remuneration.

      The status of the influencer

      In the absence of regulations governing the status of influencers, a legal ambiguity persists regarding whether the influencer should be considered an independent contractor, an employee (as is partly the case for models or artists), or even as a brand representative (i.e. commercial agent), depending on the missions contractually entrusted to the influencer.

      The nature of the contract and the applicable social security regime stem from the missions assigned to the influencer:

      • In the case of an employment contract, the influencer will fall under the general regime for employees and assimilated persons, based on Articles L. 311-2 or 311-3 of the French Social Security Code.
      • In the case of a service contract, the influencer will fall under the regime for self-employed workers.

       

      The existence of a relationship of subordination between the advertiser and the influencer typically determines the qualification of an employment contract. Subordination is generally characterized when the employer gives orders and directives, has the power to control and sanction, and the influencer follows these directives. However, some activities are subject to a presumption of an employment contract; this is the case (at least in part) for artist contracts under Article L. 7121-3 of the French Labor Code and model contracts under Article L. 7123-2 of the French Labor Code.

       

      The remuneration of the influencer

      The influencer can be remunerated in cash (fixed or proportional) and/or in kind (for example: receiving a product from the brand, invitations to private or public events, coverage of travel expenses, etc.). The influencer’s remuneration must be specified in the influencer agreement and is directly impacted by the influencer’s status, as certain obligations (minimum wage, payment of social security contributions, etc.) apply in the case of an employment contract.

      Furthermore, the remuneration (for the influencer’s services) must be distinguished from that of the transfer of their copyrights or image rights, which are subject to separate remuneration in exchange for the IP rights transferred.

       

      The influencers… in the spotlight

      The law of June 9, 2023, grants the French authority (i.e. the Consumer Affairs, Competition and Fraud Prevention Agency, “DGCCRF”) new injunction powers (with reinforced penalties). This comes in addition to the recent creation of a “commercial influence squad“, within the DGCCRF, tasked with monitoring social networks, and responding to reports received through Signal Conso. The law provides for fines and the possibility of blocking content.

      As early as August 2023, the DGCCRF issued warnings to several influencers to comply with the new regulations on commercial influence and imposed on them the obligation to publicly disclose their conviction for non-compliance with the new provisions regarding transparency to consumers on their own social networks, a heavy penalty for actors whose activity relies on their popularity (DGCCRF investigation on the commercial practices of influencers).

      On February 14, 2024, the European Commission and the national consumer protection authorities of 22 EU member states, Norway, and Iceland published the results of an analysis conducted on 570 influencers (the so-called “clean-up operation” of 2023 on influencers): only one in five influencers consistently presented their commercial content as advertising. 

      In response to environmental, ethical, and quality concerns related to “fast fashion,” a draft law aiming to ban advertising for fast fashion brands, including advertising done by influencers (Proposal for a law aiming to reduce the environmental impact of the textile industry), was adopted by the National Assembly on first reading on March 14, 2024.

      Lastly, the law of June 9, 2023, has been criticized by the European Commission, which considers that the law would contravene certain principles provided by EU law, notably the principle of “country of origin,” according to which the company providing a service in other EU countries is exclusively subject to the law of its country of establishment (principle initially provided for by the E-commerce Directive of June 8, 2000, and included in the DSA). Some of its provisions, particularly those concerning the application of French law to foreign influencers, could therefore be subject to forthcoming – and welcome – modifications.

      Summary

      To avoid disputes with important suppliers, it is advisable to plan purchases over the medium and long term and not operate solely on the basis of orders and order confirmations. Planning makes it possible to agree on the duration of the ‘supply agreement, minimum volumes of products to be delivered and delivery schedules, prices, and the conditions under which prices can be varied over time.
      The use of a framework purchase agreement can help avoid future uncertainties and allows various options to be used to manage commodity price fluctuations depending on the type of products , such as automatic price indexing or agreement to renegotiate in the event of commodity fluctuations beyond a certain set tolerance period.

      I read in a press release: “These days, the glass industry is sending wine companies new unilateral contract amendments with price changes of 20%…”

      What can one do to avoid the imposition of price increases by suppliers? 

      • Know your rights and act in an informed manner
      • Plan and organise your supply chain

      Does my supplier have the right to increase prices?

      If contracts have already been concluded, e.g., orders have already been confirmed by the supplier, the answer is often no.

      It is not legitimate to request a price change. It is much less legitimate to communicate it unilaterally, with the threat of cancelling the order or not delivering the goods if the request is not granted.

      What if he tells me it is force majeure?

      That’s wrong: increased costs are not a force majeure but rather an unforeseen excessive onerousness, which hardly happens.

      What if the supplier canceled the order, unilaterally increased the price, or did not deliver the goods?

      He would be in breach of contract and liable to pay damages for violating his contractual obligations.

      How can one avoid a tug-of-war with suppliers?

      The tools are there. You have to know them and use them.

      It is necessary to plan purchases in the medium term, agreeing with suppliers on a schedule in which are set out:

      • the quantities of products to be ordered
      • the delivery terms
      • the durationof the agreement
      • the pricesof the products or raw materials
      • the conditions under which prices can be varied

      There is a very effective instrument to do so: a framework purchase agreement.

      Using a framework purchase agreement, the parties negotiate the above elements, which will be valid for the agreed period.

      Once the agreement is concluded, product orders will follow, governed by the framework agreement, without the need to renegotiate the content of individual deliveries each time.

      For an in-depth discussion of this contract, see this article.

      • “Yes, but my suppliers will never sign it!”

      Why not? Ask them to explain the reason.

      This type of agreement is in the interest of both parties. It allows planning future orders and grants certainty as to whether, when, and how much the parties can change the price.

      In contrast, acting without written agreements forces the parties to operate in an environment of uncertainty. Suppliers can request price increases from one day to the next and refuse supply if the changes are not accepted.

      How are price changes for future supplies regulated?

      Depending on the type of products or services and the raw materials or energy relevant in determining the final price, there are several possibilities.

      • The first option is to index the price automatically. E.g., if the cost of a barrel of Brent oil increases/decreases by 10%, the party concerned is entitled to request a corresponding adjustment of the product’s price in all orders placed as of the following week.
      • An alternative is to provide for a price renegotiation in the event of a fluctuation of the reference commodity. E.g., suppose the LME Aluminium index of the London Stock Exchange increases above a certain threshold. In that case, the interested party may request a price renegotiationfor orders in the period following the increase.

      What if the parties do not agree on new prices?

      It is possible to terminate the contract or refer the price determination to a third party, who would act as arbitrator and set the new prices for future orders.

      Roberto Luzi Crivellini

      Áreas de prática

      • Arbitragem
      • Distribuição
      • Comércio internacional
      • Contencioso
      • Imobiliário
      Contato Roberto

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        Brazil – Dedicated Notary Account

        28 de Agosto, 2025

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        How real estate tokenisation works, what is the regulatory framework, and what rights investors actually acquire?

        Real estate tokenisation, already present in Spain for several years, is no longer a futuristic promise but a tangible reality in the Spanish market. It represents more than just a technological innovation: it signifies a profound transformation in how we understand ownership, investment, and liquidity within the real estate sector — one of the most traditional and tightly regulated areas of our economy.

        What is real estate tokenisation and how does it work?

        In essence, to tokenise a property today means converting the economic rights associated with that asset into digital units that can circulate on blockchain-based platforms. Each token represents a fraction of those economic rights, allowing investors with more modest capital to access a market that has traditionally required substantial investments.

        The role of smart contracts

        Tokens operate through smart contracts that automatically execute the distribution of rental income or resale proceeds of that partial representation of the property, including any potential difference in value, eliminating intermediaries and providing transparency to the process. This automation is not merely cosmetic: it reduces operational costs, speeds up transactions, and potentially increases the liquidity of assets that have historically been among the least liquid in the market.

        The legal reality: what is actually tokenised in Spain

        It is essential to clarify from the outset a key point often blurred by marketing discourse: in practice, real estate tokenisation projects in Spain do not tokenise the property itself but rather the economic rights linked to a corporate vehicle (usually a special purpose vehicle, or SPV) that owns the property. Spanish law only allows the tokenisation of shares in joint-stock companies (sociedades anónimas) using distributed ledger technology; shares in limited liability companies (sociedades limitadas) cannot be tokenised. This means that if the SPV is a limited liability company, its shares cannot be directly tokenised — only other instruments such as participative loans or credit rights over income streams can be represented as tokens. Only if the SPV is incorporated as a joint-stock company is it legally possible to tokenise its shares.

        What rights does a real estate token investor actually acquire?

        An investor who acquires a token does not become a direct co-owner of the property. Depending on the structure chosen, they may become a shareholder in a tokenised joint-stock company that owns the property or a holder of economic rights derived from participative loans or other indirect forms of economic participation issued by the SPV that owns the asset. The distinction is crucial: if the company faces solvency issues or bankruptcy, the value of the token collapses with it, and the investor cannot exercise any direct real rights over the property.

        Spanish law, rooted in centuries of land registry tradition, does not currently allow the transfer of real property rights through the mere transfer of tokens; a public deed and registration are required for the transfer to be effective against third parties. The SPV structure is therefore a compromise between technological possibilities and the demands of the current legal framework.

        Regulatory framework for real estate tokenisation in Spain

        CNMV authorisation and the 2023 Securities Market Law

        The Spanish regulator has begun to establish a legal foundation for this technology to develop within a secure framework. In 2023, the Spanish National Securities Market Commission (CNMV) authorised Adventurees Capital PFP as the first crowdfunding platform to issue tokenised securities — a milestone in the convergence of crowdfunding and blockchain. This authorisation was accompanied by the approval of Law 6/2023 on the Securities Market, which expressly recognises the representation of transferable securities through distributed ledger technologies such as blockchain, granting them full legal validity.

        The role of the Land Registry in the blockchain era

        In parallel, the Spanish Association of Land Registrars is exploring how to integrate blockchain technology into the registry system, although it is important to clarify the real scope of these initiatives. Current projects focus mainly on complementary applications such as digital management of the Building Book or improved traceability and accessibility of registry information. They do not aim to replace the fundamental pillars of the system: execution of public deeds before a notary and registration of ownership, which remain absolutely mandatory for the transfer of real rights over property. Registrars are firm in their institutional stance: blockchain can complement and streamline document management, but it cannot replace the legal control exercised by the registrar or the protection of third parties offered by the Land Registry — both essential components of the Spanish legal system. This position reflects the current limitation of the model: tokens circulate on the blockchain representing positions in SPVs or economic rights over them, but the actual ownership of the property remains anchored in the traditional registry system, held by the corporate vehicle, and any transfer of that ownership must still follow the conventional legal process with all its guarantees.

        European regulation: ECSPR, MiCA and the DLT Pilot Regime

        Spain also benefits from a European regulatory framework that is positioning the EU as a global leader in digital asset regulation. The European Crowdfunding Service Providers Regulation (ECSPR) harmonises the rules for crowdfunding platforms, allowing an authorised platform in one Member State to operate across the EU through the so-called “European passport”. The MiCA Regulation, which came fully into force on 30 December 2024, broadly regulates crypto-asset markets, setting obligations for both issuers and service providers. The DLT Pilot Regime (EU Regulation 2022/858) allows market infrastructures based on distributed ledger technology to operate under certain temporary exemptions, creating a controlled testing environment to assess the potential of these technologies in financial markets.

        The Spanish regulator’s approach could be described as cautiously supportive: innovation is encouraged, but strict compliance with anti-money laundering, customer identification, and disclosure obligations is required to protect investors. This is not technological laissez-faire, but rather an effort to integrate innovation within a solid framework of legal guarantees.

        Legal challenges and risks of real estate tokenisation

        The risks of the SPV structure

        The legal challenges that remain are significant and deserve attention. The SPV structure, while legally viable, introduces an additional layer of complexity and risk that must be clearly communicated to investors. Unlike direct ownership — where the investor holds real rights over the property enforceable against third parties — in the current tokenised model, investors hold positions in indirect forms of economic participation (shares, participative loans, credit rights) linked to the company that owns the property. This has important implications for corporate liability, taxation, and insolvency protection.

        The disconnect between the on-chain and off-chain worlds

        It is also essential to understand that the connection between the “on-chain” world (where tokens circulate) and the “off-chain” world (where property rights are recorded) is neither direct nor automatic. Transferring a token does not in itself alter the Land Registry: ownership of the property remains with the SPV regardless of who holds the tokens, and only a duly notarised and registered deed can change that ownership. The exploratory projects of the Land Registrars aim to improve efficiency in information management but do not alter this fundamental principle. As in any emerging market, it is essential to prevent fraudulent schemes that promise unrealistic returns or market tokens without proper legal backing.

        Practical implications for investors and legal practitioners

        For legal practitioners, real estate tokenisation may require adapting contracts, corporate bylaws, and financing structures to an environment where rights circulate digitally and in a decentralised manner. For investors, it offers an opportunity to diversify portfolios with smaller capital contributions and greater liquidity potential than traditional real estate investment, provided they understand that they are not acquiring direct ownership of the property but rather a financial position linked to the corporate structure that owns it. And for the wider economy, it could invigorate a real estate market worth trillions of euros by facilitating the entry of retail capital previously excluded from such investments.

        The future of real estate tokenisation in Spain

        This is an evolution that combines law, technology, and finance in an inseparable way. It is essential to understand that tokenisation is not a passing trend but a tool that, when properly used and regulated, can transform access to one of society’s most valuable assets — property. However, this transformation currently operates through intermediate corporate structures and indirect forms of economic participation, not through direct ownership as commercial language sometimes suggests. It certainly does not imply an immediate revolution of Spain’s land registration system, whose fundamental guarantees remain intact.

        It is quite common for business relationships with agents or distributors to last for years without any signed documents. And be careful, because we know that a contract can exist even verbally.

        The absence of a written contract will add difficulties in the event of a possible claim, so what you do between the decision to terminate, and the moment of the claim is very important. Remember: ‘anything you write will be used against you’.

        The decision to terminate a business relationship is a very delicate moment to which, for some reason, solicitors are not invited. Here are some examples (all real) in which companies or employees with the best of intentions wrote to the agent/distributor. All of them were subsequently very damaging to the company:

        Saying ‘We are terminating our business relationship’ when the strategy will be to argue that no such business relationship exists, but rather that there are separate and linked contracts (e.g., supply rather than ongoing distribution contract; very significant compensation consequences).

        ‘You no longer represent our company’, which may be evidence that you did so before.

        ‘As of day X, you may no longer act on behalf of our company,’ which would prove that you were previously able to act on its behalf.

        ‘You may not attend the X trade fair on our behalf.’ A way of confirming that the agent/distributor’s responsibilities included participating in trade fairs and probably accrediting the customers obtained.

        ‘The sales you promoted have been significantly reduced in year N.’ When there is no written contract or other form of documentation, imputing a breach of an obligation that is not clear can be counterproductive.

        Saying ‘You are not actively promoting our products’ and then adding: ‘We urge you to stop promoting the sale of our products’.

        ‘You are no longer our exclusive representative’, which proves a type of relationship (representation/agent) and a tacit or express agreement (‘exclusivity’).

        ‘We have appointed another representative in your area’, which shows that the agent/distributor had an assigned area and was “representing”.

        ‘From this moment on, orders will be handled by X’, which also confirms a type of relationship.

         

        In summary: from the moment the company considers terminating a commercial relationship, especially when it is not in writing and before sending any letter, it is advisable to think carefully about the strategy in case of a possible claim. This is the best time to seek advice and avoid surprises. Any communication that is not in line with this strategy designed from the outset can only lead to confusion and problems.

        Since the General Data Protection Regulation (GDPR) took effect in 2018, the European Union (EU) has granted adequacy status to only a limited number of jurisdictions — those whose data protection regimes are deemed to provide an “essentially equivalent” level of protection to that of the EU. The current list includes Andorra, Argentina, Canada (under PIPEDA), Faroe Islands, Guernsey, Isle of Man, Israel, Japan, Jersey, New Zealand, South Korea, Switzerland, Uruguay, the United Kingdom, and the United States (limited to companies certified under the Data Privacy Framework).

        As of 5 September 2025, Brazil is on the verge of joining this exclusive group. The European Commission has issued a draft adequacy decision concluding that the Brazilian General Data Protection Law (Lei Geral de Proteção de Dados Pessoais – LGPD), in conjunction with Brazil’s broader legal and constitutional framework, offers protections that are essentially equivalent to those found in the GDPR. While Brazil’s rules offer somewhat more flexibility in specific areas of data processing, the foundational principles and safeguards are well-aligned with EU standards.

        Once finalized, the adequacy decision will authorize the free flow of personal data from the EU to Brazil without the need for additional contractual clauses or technical safeguards. Such a development is not just regulatory — it also answers a core political argument made by LGPD advocates since its inception: that the absence of a comprehensive data protection framework was undermining Brazil’s international competitiveness by limiting data flows and discouraging investment. For businesses, the EU decision may finally mean the removal of a significant layer of compliance complexity — a development especially welcome by small and medium-sized enterprises engaged in cross-border trade or service provision. The draft is currently under review by the European Data Protection Board (EDPB) and the Member States of the EU.

        The Commission’s assessment highlights several key aspects of Brazil’s data protection landscape. It begins by noting that the Brazilian Constitution expressly guarantees the right to privacy and the protection of personal data — a notable distinction among non-EU jurisdictions. These protections are further supported by Brazil’s ratification of the American Convention on Human Rights and its recognition of the jurisdiction of the Inter-American Court of Human Rights, reinforcing a commitment to fundamental rights and democratic oversight.

        The LGPD mirrors the GDPR in many critical respects and defines its territorial scope clearly. It applies to: (i) data processing carried out within Brazilian territory, (ii) the offering of goods or services to individuals in Brazil, and (iii) data collected in Brazil, even if subsequently processed abroad. This aligns well with the extraterritorial provisions of the GDPR. The definitions of personal data, sensitive data, controller, and processor are materially similar, as are the key principles governing processing — including lawfulness, purpose limitation, data minimization, accuracy, transparency, and security. The law expressly excludes anonymized data from its scope and establishes specific exemptions for journalistic activities, public security, and scientific research.

        Another strength is Brazil’s institutional framework. The National Data Protection Authority (ANPD) was recently transformed into an autonomous regulatory agency, enhancing its independence and technical capacity. The ANPD holds both regulatory and enforcement powers: it can issue binding regulations, impose administrative sanctions, and publish authoritative guidance. To date, it has issued key guidelines on topics such as consent, legitimate interest, the role of the Data Protection Officer (DPO), and security incident reporting. Internationally, the ANPD is an active participant in global data protection dialogue — it is a member of the Global Privacy Assembly and an official observer to the Council of Europe’s Convention 108.

        The LGPD’s approach to international data transfers is also structurally aligned with the GDPR. It requires appropriate safeguards such as standard contractual clauses, allows for future adequacy decisions under a regime comparable to Article 45 of the GDPR, and includes detailed provisions for onward transfers and transit data — that is, data merely passing through Brazil without further processing. The rights of data subjects are robust and familiar to European practitioners: access, rectification, erasure, portability, and withdrawal of consent are guaranteed. Lawful bases for processing are also aligned — including consent, legal obligations, contract execution, and legitimate interest. Notably, the LGPD requires a documented balancing test when relying on legitimate interest, bringing additional accountability to this flexible legal basis.

        Security incidents involving personal data must be notified to both the ANPD and affected data subjects when there is a significant risk of harm. The standard notification deadline is 72 hours, and the required content aligns closely with Articles 33 and 34 of the GDPR. The ANPD may also order public disclosure of incidents or require remedial measures, depending on the nature and scope of the breach.

        Importantly, this process is not one-sided. In parallel to the European Commission’s adequacy decision, the ANPD is conducting its own adequacy assessment of the EU and EEA data protection frameworks. This process is regulated by the Brazilian Resolution CD/ANPD No. 19/2024, which governs international data transfers. Once the technical and legal evaluation is complete, the ANPD’s Board of Directors will issue a formal decision. This reciprocal move reflects Brazil’s commitment to mutual recognition and regulatory symmetry — a positive signal for companies on both sides of the Atlantic.

        In conclusion: If confirmed, Brazil’s adequacy status will simplify international operations, reduce compliance costs, and expand opportunities for data-driven business and legal cooperation. For European lawyers advising SMEs with interests in Latin America, this development is a strategic signal: Brazil is emerging not just as a growing market, but as a legally compatible and data-safe jurisdiction for international partnerships.

        Remember the USA – EU agreement on 15% tariffs? I wrote that with a negotiator like Trump the game is never over (article here) and—after the recent interlude featuring a threat of 100% tariffs on pharmaceuticals—the U.S. government has announced the imposition of an overall 107% duty on Italian pasta, which could take effect on January 1, 2026.

        Where this new duty comes from

        The antidumping investigation was launched by the U.S. Department of Commerce at the request of certain competing American companies and is based on a 1996 antidumping order that allows for periodic reviews of imports of Italian pasta. The Department of Commerce conducts these checks annually to assess whether Italian producers are selling pasta at prices lower than the U.S. domestic market, a practice known as “dumping.”

        Companies involved in the investigation

        The Department of Commerce selected two sample companies for in-depth analysis, defined as “mandatory respondents”: La Molisana and Pastificio Lucio Garofalo. According to the official document published by the U.S. administration, for the period from July 1, 2023 to June 30, 2024, both companies allegedly sold their products below market prices, resulting in the imposition of a duty of 91.74%.

        U.S. authorities justified this percentage by claiming the two companies did not provide complete or compliant information as requested by the Department and were therefore insufficiently cooperative during the investigation. What is very important is that, in addition to the two companies directly examined, the additional 91.74% duty is also applied to numerous other Italian producers not individually reviewed. This methodology, while formally permitted under U.S. law as an exception, is being applied without any direct verification of the other companies.

        Next steps in the procedure

        Italy’s Ministry of Foreign Affairs moved immediately, formally intervening in the proceeding as an “interested party” through the Italian Embassy in Washington. The Foreign Ministry is working in close coordination with the companies concerned and, in concert with the European Commission, to persuade the U.S. Department to revise the provisional duties.

        The two companies involved (La Molisana and Garofalo) can submit documentation to contest the dumping allegations. However, if dumping is confirmed, the Department of Commerce will instruct Customs to apply antidumping duties on goods sold and entered into U.S. commerce.

        The preliminary nature of this determination means there is still room to change the decision before it becomes final.

        Possible effective date

        The new super-duty of 91.74%, which will be added to the existing 15% tariff for a total of 107%, is scheduled to take effect on January 1, 2026. This date therefore represents a crucial deadline for all ongoing diplomatic and legal actions.

        If confirmed, the economic impact would be significant: in 2024, Italian pasta exports to the United States reached a value of €671 million according to Coldiretti, accounting for nearly 17% of the sector’s total exports. A 107% duty would risk seriously undermining competitiveness in one of the most important markets for Italian agri-food products.

         What to do between now and January 1, 2026?

        At this stage, the entry into force of the new duty depends on the outcome of the ongoing procedure: given what has happened in recent months, and the political use the U.S. administration has made of tariffs—well beyond their technical function—it is reasonable to be pessimistic.

        So, what to do? In recent months we have seen companies react to the uncertainty over the fate of the tariffs in three ways:

        • Some rushed to ship as many products as possible before the potential effective date of the duty;
        • Some granted—upfront—discounts equivalent to the threatened duty, in case it came into force;
        • Some suspended orders, pending definitive news on the impact of the duties.

        These are all  valid options, but other effective tools for managing the uncertainty caused by the flurry of announcements, negotiations, and threats from the U.S. administration should not be forgotten: the risk of new duties being introduced, or existing ones being increased, can be managed in the contract by agreeing with the U.S. importer how any tariff change will affect the product.

        The parties can stipulate, for example, that the increase will be split equally; or that the importer will bear it beyond a certain threshold; or that if the duty exceeds a certain level, the contracts may be terminated. You can find a deeper dive in this article.

        The only certainty is that trade relations with the U.S. will stay unpredictable for a long time, and it’s vital to carefully manage the risk factors involved in selling products there. Right now, the focus is on tariffs and prices, and I encourage you to take this chance to thoroughly review existing agreements and assess whether—and how—other important points are addressed that could entail significant liabilities: we discuss them, very practically, in this book.

        A dedicated notary account in Brazil is a legal mechanism that brings greater security, transparency, and reliability to financial transactions. Regulated under Law 8.935/1994 and Provision No. 197/2025, this service allows notaries to receive, manage, and release funds only after contractual conditions have been fulfilled. By ensuring segregation of assets, traceability, and impartial oversight, dedicated notary accounts provide an effective escrow-like solution for real estate deals, mergers and acquisitions, import/export operations, high-value asset purchases, and complex commercial contracts. This tool not only reduces legal risks and potential disputes but also strengthens trust between parties by guaranteeing that payments are safeguarded until obligations are met.

        The legal basis can be found in Law 8.935/1994, § 1 of art. 7-A, which allows notaries to receive, deposit, and manage amounts related to legal transactions, with transactions subject to objectively verifiable facts/conditions. Provision No. 197, dated June 13, 2025, regulates, at the national level, the service of notarial accounts linked to Notary Public Offices.

        Practical applications: among others, in the following transactions:

        • Real estate: guarantee that the down payment and settlement amounts will be secured in a specific account. This mitigates the risk of misappropriation of funds and ensures that the money will be released only after all contractual conditions have been met.
        • M&A: the linked notarial account creates a standardized escrow mechanism for the payment of price/holdbacks/earn-outs and conditional obligations.
        • Purchase and Sale of High-Value Movable Property: the linked account can be used to guarantee payment. The buyer deposits the amount and the seller knows that the money is safe, being released only after the transfer of ownership and delivery of the goods.
        • Import and Export: the transaction amount can be deposited with the notary and released to the exporter only after confirmation of delivery of the goods in the destination country, for example.
        • Guarantee of Obligations: In any contract that provides for the payment of a sum of money as a guarantee, the notary account can be used to provide greater security to the parties.
        • Supply, EPC/turnkey, and construction contracts: performance retentions, milestone acceptance (commissioning, as-built, issuance of ART/CREA), and payment against formal acceptance.
        • Contractual joint ventures and commercial partnerships: advances conditional on licenses, authorizations, or competitive approval, where applicable.

        Reduction of Legal Risks: The use of linked accounts reduces the chances of litigation related to lack of clarity about the origin and destination of funds. Companies can clearly demonstrate that payments were made and held by an impartial and secure institution.

        Operational structure: limited to banking entities affiliated with the CNB, which must ensure the segregation of assets, traceability through audit trails, and proof of all transactions. The authorization of the delegate requires prior accreditation and electronic registration of the essential details of the transaction and its conditions in the CNB system, with access restricted to the parties and the notary.

        Specific Purpose: amounts received as payment, guarantee, or advance payment as a result of notarial acts must be deposited in a bank account linked to the specific act and may only be moved for the purpose for which they are intended.

        Transparency and Traceability: With the linked notarial account, it is possible to clearly track the financial flow of each transaction, which increases transparency for all parties and for supervisory bodies.

        Verification of conditions and release. Once the objective conditions have been met, the notary authorizes the transfer to the recipients and files the proof of verification. In the event of a dispute between the parties, the notary suspends any movement, draws up a notarial deed, and advises on a consensual or judicial solution, without deciding on the effectiveness/termination of the transaction; if the transaction is frustrated and no solution is found, the procedure is terminated and the amounts are returned to the depositor, in accordance with the agreed clauses.

        Confidentiality and access. In transactions with a confidentiality clause, the notary public maintains confidentiality and does not issue certificates regarding the content of the transaction; documents are accessible only for correctional purposes or by court order.

        Remuneration and costs. The notary’s remuneration for the notarial account service is paid by the financial institution under the terms of the agreement, and the transfer of additional costs to the user is prohibited, without prejudice to fees for any related notarial acts.

        Article 442-1.II of the French Commercial Code (former Article L. 442-6.I.5 °) sanctions the termination by a trader of a written contract or an informal business relationship without giving sufficient written prior notice. Over the last twenty years, this article became the recurring legal basis for all compensation actions (up to 18 months of gross margin, plus other damages) when a commercial relationship or a contract ends (totally or even partially).

        Therefore, a foreign trader who contracts with a French company should try not to fall under the aegis of this rule (part I) and, if it cannot, should understand and control its implementation (part II).

        In a nutshell:

        How can a foreign company avoid or control the risk linked to the “sudden termination of commercial relations” set by French law? Foreign companies doing business with a French counterpart should:

        • enter, as soon as possible, into a written (frame) agreement with their French suppliers or customers, even for a very simple relation and;
        • stipulate a clause in favour of foreign court or arbitration and foreign applicable law while, failing to choose it, they would rather be subject to French courts and laws;

        How can a foreign company master the risk linked to the “sudden termination of commercial relations” set by French law? Foreign companies doing business with a French counterpart should:

        • know that this article applies to almost all type of commercial relationship or contracts, whether written or not, fixed-term or not;
        • check whether its relation/contract is sufficiently long, regular and significant and whether the other party has a legitimate belief in the continuation of this relation/contract;
        • give a written notice of termination or non-renewal (or even of a major modification), which length takes mainly into account the duration of the relation, irrespectively of the length of the contractual notice;
        • invoke, with cautiousness, force majeure and gross negligence of the party, to set aside “sudden termination”;
        • anticipate, in case of insufficient notice, a compensation which amount is the product of the average monthly gross margin per the length of non-granted prior notice.

        How to avoid the application of the French “Sudden Termination” rule?

        In international matters, a foreign company must anticipate whether its relationship will be subject or not to French law before terminating a contract or a business relationship and, in case of dispute, whether it will be brought before a French court or not.

        What will be the law applicable to “Sudden Termination”?

        It is quite difficult for a foreign company to correctly grasp the French legal framework of conflict of laws rules applicable to “sudden termination”. In a ruling of September 19, 2018 (RG 16/05579, DES/ Clarins), the Court of appeal of Paris made, by an implicit reference to the Granarolo EU ruling (07 14 16, N°C196/15) an extension of the contractual qualification to most of the business relationships which will improve foreseeability in order for a foreign company to try to exclude French law and its “sudden termination” rule.

        Sudden termination of a written contract or of a “tacit contractual relationship”

        According to Rome I Regulation (EC No 593/2008, June 17 2008) on the law applicable to contracts:

        – In case of choice of a foreign law by the parties: The clause selecting a foreign applicable law will be valid and respected by French judges (subject to OMR, see below), provided that the choice of law by the parties is express or certain.

        – In case of no choice by the parties: French law will likely to be declared applicable as it might be either the law of the country where is based the distributor/franchisee, etc. or the law of the country where the party who is to provide the service features of the contract has its domicile.

        Sudden termination of a “non-tacit contractual relationship”

        In case of informal relationship (i.e. orders placed from time to time), French judges would retain the tort qualification and will refer to the Rome II Regulation (No 864/2007, July 11 2007) on the law applicable to non-contractual obligations..

        – In case of choice of a foreign law by the parties: a properly drafted choice of foreign law clause should be implemented by a French judge, provided that it expressly includes tort cases.

        – In case of no choice of law by the parties: French law will likely to be declared applicable as it might be the law of the country where the damage occurs (regardless of the place of the causing event or that of the indirect consequences), which is the place of the head office where the French victim suffers the consequences of the termination.

        “Sudden Termination” rule, a French Overriding Mandatory Rule?

        The position of French courts is quite vague and unsatisfactory, and this has been the case for a long time. To make it short: the Commercial Court of Paris judges that “sudden termination” is not an OMR, the Court of appeal of Paris (sole French appellate court in charge of “sudden termination” cases) is also not in favour of the OMR qualification on the grounds that the text “protects purely private economic interests” (CA Paris, pôle 5, ch. 5, Feb 28. 2019, n° 17/16475 / CA Paris, pôle 5, ch. 5, Oct 8. 2020, n°17/19893). Recently, the Paris Court of Appeal reaffirmed that the rules on sudden termination of established commercial relations are not an OMR (Court of appeal Paris, March 11, 2021, n° 18/03112).

        The French Supreme Court has never explicitly addressed the issue (OMR or not OMR). Indeed, the French Supreme Court ruled in the Expedia case (Cass. com., July 8, 2020, n°17-31.536) that the provisions of the former article L. 442-6, I, 2º and II, d), about “significant imbalance” (which is in the same set of rules than “Sudden termination”) are OMR. However, this qualification should be limited to the specific action brought by the Ministry of Finance and not be applicable to an action by a private party. Moreover, some courts may be tempted to invoke the provisions of French law n°2023-221 (March 30, 2023, aka Egalim III) to qualify Sudden termination rule as an OMR, however this text (article L 444-1.A Commercial code) does not quote expressly OMR and set no justification whatsoever to set such a qualification.

        Consequently, if a claim for “sudden termination” is brought to a French court, there is still a  risk that the latter would exclude the applicable foreign law and replace it with the regime resulting from the “sudden termination” of Article L 442-1. II. However, to avoid this risk, a foreign company would better not only choose a foreign governing law but also stipulate that the dispute will be brought before a foreign judge or an arbitral tribunal.

        How to avoid jurisdiction of French court over a “Sudden Termination” claim?

        “Sudden Termination” claim and intra EU co-contractor

        The ECJ ruling (Granarolo, July 14, 2016, N°C196/15) created a distinction between claims occurring from:

        – written framework contract or tacit contractual relationship (existing only if the body of evidences listed by the ECJ are identified by national judges, i.e. length of relation and commitments recognized to each other, such as exclusivity, special price or terms of delivery or payment, non-competition, etc.): such claim has a contractual nature according to conflict of jurisdiction rules under Brussels I recast Regulation;

        – informal relationship which is a non–tacit contractual relationship (i.e. orders placed from time to time): such a request has a tort nature under Brussels I recast ;

        To be noted: the so-called Egalim III law has no impact on the EU rules on jurisdiction clauses.

        (a) Who is the Judge of the “sudden termination” of a written contract or of a “tacit contractual relationship”?

        – Jurisdiction clause for the benefit of a foreign court will be enforced by French courts, even though it is an asymmetrical clause (Court of cassation, October 7, 2015, Ebizcuss.com / Apple Sales International).

        – In case of lack of choice of court clause, French courts are likely to have jurisdiction if the French claimant bringing a case based on “sudden termination» is the service provider, such as distributor, agent, etc. (see ECJ Corman Collins case, 19 12 13, C-9/12, and article 7.1.b.2 of Brussels I recast°).

        (b) Who is the Judge of the “sudden termination” of a “non- tacit contractual relationship”?

        – We believe that French courts may continue to give effect to a jurisdiction clause in tort case, especially when it expressly encompasses tort litigation (Court of cassation, 1° Ch. Civ., January 18, 2017, n° 15-26105, Riviera Motors / Aston Martin Lagonda Ltd).

        – In case of lack of choice of court clause, French courts will have jurisdiction over a “sudden termination” claim as the judge of the place where the harmful event occurred (art. 7.3 of Brussels I recast), which is the place where the sudden termination has effect…i.e. in France if the French company is the victim.

        “Sudden Termination” claim and Non-EU co-contractor

        The Granarolo solution will not ipso facto apply if a French victim brings a claim to French courts, based on a “sudden termination” made by a non-EU company. In non-EU relations, French judges could continue to retain only the tort qualification. In such a case, French courts may keep their jurisdiction based on the place where the harmful event occurs.

        Jurisdiction clause to a foreign court may be recognized in France (even for tort-based claims), provided that this jurisdiction clause is valid according to either a bilateral international convention or to the Hague Convention of 30 June 2005 on choice of court agreements. Otherwise, according to Egalim III law, imperative jurisdiction might be attributable to French courts.

        “Sudden Termination” claim and arbitration

        Stipulating an ad hoc or institutional arbitration clause is probably the safest solution to avoid the jurisdiction of French courts. Ideally, the clause will fix the seat of the arbitral tribunal outside France. According to the principle of competence-competence of the arbitrators, French courts declare themselves incompetent, unless the arbitration clause is manifestly void or manifestly inapplicable, regardless of contract or tort ground (see, in particular, Paris Court of Appeal, 5 September 2019, n°17/03703). The so-called “Egalim III” law has no impact on arbitration clauses.

        Conclusion: Foreign companies should not leave open the Jurisdiction and governing Law issues. They must negotiate a safe harbour, otherwise a French victim of a termination will likely to be entitled to bring a “sudden termination” claim in front of French judges (see what happen below in Part 2)

        How to master the “Sudden Termination” French rules?

        When French law is applicable, the foreign company will face the legal regime of article L442 -1.II of the French Commercial Code sanctioning “sudden termination”. As a preliminary remark, it is important to know, above all, that the implementation of the liability for “sudden termination” is the consequence of the lack of a notice or a too short notice. Thus, this scheme does not lay down an automatic compensation rule. In other words, as soon as reasonable notice is given by the author of the termination, liability on that basis can be dismissed.

        The prerequisite for “Sudden Termination”: an established commercial relationship

        All contracts are covered by this legal regime, except for contracts whose regulations provide for a specific notice of termination, like commercial agency contracts and transport of goods by road subcontracts.

        First, there must be a relationship that can be proven by a written contract or de facto, by behaviour of the parties. Article L.442-1 II of the French Commercial Code covers all “commercial” relationships and not only “contractual ones so that such relationship may be based on a succession of tacitly renewed contracts or a regular flow of business, materialized by multiple orders. This was recently recalled by the Supreme Court (Supreme Court, February 16, 2022, n° 20-18.844)

        Second, this relationship must have an established character. There is no legal definition, but this notion has been defined year after year by case law which has established an objective criterion and a more subjective one.

        (a) The objective criterion implies a sufficiently long, regular and significant relationship between the two parties. The duration of the relationship is the most important criterion. The relationship must also be regular, that is, it must not have been interrupted (too often or too long). The relationship must ultimately be meaningful and represent a serious flow of business between the parties, in volume or value.

        (b) The subjective test focuses primarily on the legitimate belief of the victim of the rupture in the continuation of the contract / the relationship that is based on factual elements, such as investment requests, budgets over several years, etc. Conversely, it is on the basis of the finding of a lack of legitimate belief in a common future that the terminating party can prove the absence of a stable character when he has resorted, on several occasions, a call for tenders (unless it is a trick).

        Anticipating a “Sudden Termination” claim

        (a) The termination may be total or partial

        The total rupture is materialized by a complete stop of the relations, for example ending the contract, stopping the sending of orders by the purchaser or the recording of orders by the supplier.

        The Supreme Court recently recalled that a significant drop in sales with a partner must be considered as a partial rupture of the relationship (February 16, 2022, n° 20-18.844, cited above). But the most complicated situation to deal with is the so-called partial rupture that will be deduced from a modification of elements that partly impacts the relationship but does not reduce it to nothing (ex.: a price increase or decrease, a change in the terms of payment or delivery).

        (b) The termination must be subject to a reasonable written prior notice

        The notice must be notified in writing. The absence of written notice is already a breach in itself. The notification must clearly reflect the willingness of a party to sever the relationship in whole or in part, which must be clearly identified. The notification must also clearly identify the date on which the relationship will end.

        Thus, an ambiguity on the notice period (e.g if the termination of an agreement is notified, whilst offering to maintain certain prices and payment terms, in the meantime) is considered as an insufficient termination notice (French Supreme Court, January 29, 2013, n° 11-23.676).

        Parties must distinguish between the letter of formal notice for default and the subsequent notification of the breach, giving notice (if applicable). During the period of notice, parties must fully comply with all contractual conditions.

        This principle also applies to distribution contracts subject to specific French rules imposing annual or multi-year negotiation obligations. In fact, the Court of cassation has ruled that “when the conditions of the commercial relationship established between the parties are subject to annual negotiation, modifications made during the notice period which are not so substantial as to undermine its effectiveness do not constitute a brutal breach of that relationship” (Cass. com., Dec. 7, 2022, n° 19-22.538).

        However, it’s not necessary to mention the reasons why the commercial relationship is terminated is not a fault or breach of the relationship. In fact, French courts consider that “the fact that the given reason to terminate was false does not in any way present the terminating party from terminating the commercial relationship” (Versailles Court of Appeal, June 10, 1999).

        The duration of the prior notice to be respected is not defined by French law which did not pose precise rule until the reform 2019. If several criteria are stated by case law, it should be noted that the most important criterion is the duration of the relationship. Judges also take into account the share of turnover achieved by the victim, the existence or not of a territorial exclusivity, the nature of the products and the sector of activity, the importance of the investments made by the victim especially to the relationship in question, and finally the state of economic dependence. Economic dependence is defined as the impossibility for a company to have a solution that is technically and economically equivalent to the contractual relations it has established with another company. Case law considers this to be an aggravating factor justifying a longer termination notice.

        The minimum notice period must be notified at the time of notification of termination. As a consequence, events that affect the victim after the notification, both positively (conclusion of a new contract) and negatively (loss of another custome), will not be taken into account by the judge, at the time of ruling, when assessing the “brutality” of the termination.

        The length of the notice given by the judges is very variable. The appreciation of notice is made on a case-by-case basis. It is very difficult to give a golden rule, even though roughly for each year of relationship, a month’s notice might be due (to modulate up or down depending on the other criteria in the relationship). But way of illustration, however, the following case law may be cited:

        • Paris Court of Appeal , Feb.9, 2022: 16-year relationship with 15 months’ notice;
        • Paris Court of Appeal, Jan.20, 2022: 12-year relationship with 8 months’ notice;
        • Paris Court of Appeal, Oct. 25, 2022: 16-year relationship with 18 months’ notice;
        • Paris Court of Appeal , Feb. 23, 2022: 17-year relationship with 11 months’ notice;
        • Paris Court of Appeal, Sept. 21, 2022: 5-year relationship with 14 months’ notice.

        Since the Order of April 24, 2019, which limits the length of reasonable notice to a maximum of 18 months, if the notice period granted by a party is 18 months, it cannot be held liable for a sudden termination. However, much of the litigation remains uncertain, as only exceptionally long or particularly sensitive relationships led, prior to 019, to the award of more than 18 months’ notice. Ordinance of April 24, 2019, limits to 18 months the maximum period of notice reasonably due under Article L 442-1.II. But much of the litigation will remain uncertain since only relations of exceptional longevity or particularly sensitive, could have led to the allocation of a notice higher than 18 months.

        Judges are not bound by the contractual notices stipulated in the contract. But if the author of the breach also violated the terms and conditions of termination provided for by contract, the victim may seek the responsibility of the author both on the tort basis of the sudden rupture and also on the basis of the breach of a contractual obligation.

        Cases in which “Sudden Termination” is ruled out

        The legal regime provides for two cases, and the case-law seems to have imposed others.

        (a) The two legal exceptions are Force majeure (very rarely consecrated by the courts) and the fault of the victim of the termination, case-law having added that it must be a serious violation (“faute grave”) of a contractual commitment or a legal provision (such as non-respect of an exclusivity, a non-compete, a confidentiality or a change of control duty, or non-payment of amounts due contractually).

        The judges consider themselves, of course, not bound by a termination clause defining what constitutes serious misconduct. In any case the party who terminates for serious misconduct must clearly notify it in its letter of termination. Above all, serious misconduct leads to a lack of notice, therefore, if the terminating party alleges serious misconduct but grants notice, whichever it may be, judges may conclude that the fault was not serious enough.

        Thus, the seriousness of the misconduct must be motivated by judges in their rulings. Noting that the contract was breached after two formal notices is not sufficient (Cass. com., Feb 16. 2022, n° 20-18.844).

        However, the Court of Cassation considers that “even in the case of serious misconduct justifying the immediate termination of the commercial relationship, the other party remains free to give the other party a notice” (Cass. Com., Oct. 14 2020, n°18-22.119).

        (b) In recent years, case-law has added other cases of liability waiver. This is the case when the rupture is the consequence of a cause external to the author of the rupture, such as the economic crisis, the loss of its own customers or suppliers, upstream or downstream.

        For example, in 2021 the Court of cassation has ruled that “the business partner is not entitled to an unchanged relationship and cannot refuse any adaptation required by economic changes” (Com, Dec 01, 2021, n°20-19.113). In fact, to be attributable to an economic player, a termination must be free and deliberate. This is not the case if termination is imposed by the economic situation.

        However, adding a liability exemption clause in a contract, aimed at waiving destinated to escape the penalties of article L. 442-1, is without consequences on the judge’s appreciation.

        Judges have also excluded “sudden termination” in the hypothesis of the end of the first period of a fixed-term contract, whatever its duration is: the first renewal of a contract, constitutes a foreseeable event for the victim of the rupture, which excludes the very notion of brutality; but once the contract has been renewed at least once, judges can subsequently characterize the victim’s legitimate belief in a new tacit renewal.

        Compensation for “Sudden Termination”

        Judges only compensate for the detrimental consequences of the brutality itself of the breach but do not compensate, at least in the context of article L442 -1.II, for the consequences of the breach itself.

        The basic rule is very simple: it is necessary to determine the length of the notice which should have been granted, from which the notice actually granted is deducted. This net notice is multiplied by the average monthly gross margin of the victim, or more often the so called margin on variable costs (i.e. the turnover minus costs disappearing with non-performance of the contract/relation). Defendant should not hesitate to ask for the full accountancy evidences, especially to identify (lower) margin rates, or even for a judicial expertise on those accounting elements. In general, the base of the average monthly margin consists of the last 24 or 36 months.

        The compensation calculated on the average margin is, in general, exclusive of any other compensation. However, the victim can prove that it has suffered other losses as a consequence of the brutality of the rupture. Such as dismissals directly caused by this brutality or the depreciation of investments made recently by the victim.

        Some practical tips when considering to anticipate “Sudden Termination”

        Even though the legal regime is still ambiguous and the case-law terribly casuistic which prevents to release strong guidelines, here are some practical tips when a company plans to terminate a relationship / contract:

        • in the case of a fixed-term contract renewable tacitly, the notification of non-renewal must be anticipated well in advance of the beginning of the contractual notice in order to avoid being in a situation where it is necessary to choose between not renewing the contract with a notice that is not sufficient or agree to see the contract renewed itself for a new term;
        • commercial teams must be made aware of the risk of partial sudden termination when they change the conditions of execution of a commercial relationship / contract too radically;
        • in some cases, it may be useful to send a pre-notice of termination with a “notice proposal” in order to try to validate this notice with the other party;
        • it may also be useful, in certain relationships, to notify the end of the relationship with different lengths of notice depending on the nature of the product lines;
        • Finally, the best way is to conclude an end-of-relation protocol, fixing the duration of the notice as well as, if necessary, the progressive decline of the orders, the whole within the framework of a settlement agreement which definitively waives any claim, including “sudden termination”.

        Sudden termination regime shall be taken into consideration when entering into the final phase of a duration relationship: the way in which the contract (or de facto relationship) is terminated must be carefully planned, in order to manage the risk of causing damages to the counterparty and being sued for compensation.

        Given the significance of the influencer market (over €21 billion in 2023), which now encompasses all sectors, and with a view for transparency and consumer protection, France, with the law of June 9, 2023, proposed the world’s first regulation governing the activities of influencers, with the objective of defining and regulating influencer activities on social media platforms.

        However, influencers are subject to multiple obligations stemming from various sources, necessitating the utmost vigilance, both in drafting influence agreements (between influencers and agencies or between influencers and advertisers) and in the behaviour they must adopt on social media or online platforms. This vigilance is particularly heightened as existing regulations do not cover the core of influencers’ activities, especially their status and remuneration, which remain subject to legal ambiguity, posing risks to advertisers as regulatory authorities’ scrutiny intensifies.

         

        Key points to remember 

        • Influencers’ activity is subject to numerous regulations, including the law of June 9, 2023.
        • This law not only regulates the drafting of influence contracts but also the influencer’s behaviour to ensure greater transparency for consumers.
        • Every influencer whose audience includes French users is affected by the provisions of the law of June 9, 2023, even if they are not physically present in French territory.
        • Both the law of June 9, 2023, and the “Digital Services Act,” as well as the proposed law on “fast fashion,” foresee increasing accountability for various actors in the commercial influence sector, particularly influencers and online platforms.
        • Despite a plethora of regulations, the status and remuneration of influencers remain unaddressed issues that require special attention from advertisers engaging with influencers.

         

        The law of June 9, 2023, regulating influencer activity  

        The definition of influencer professions

        The law of June 9, 2023, provides two essential definitions for influencer activities:

        • Influencers are defined as ‘natural or legal persons who, for consideration, mobilize their notoriety with their audience to communicate to the public, electronically, content aimed at promoting, directly or indirectly, goods, services, or any cause, engaging in commercial influence activities electronically.’
        • The activity of an influencer agent is defined as ‘that which consists of representing, for consideration,’ the influencer or a possible agent ‘with the aim of promoting, for consideration, goods, services, or any cause‘ (article 7) The influencer agent must take ‘necessary measures to ensure the defense of the interests of the persons they represent, to avoid situations of conflict of interest, and to ensure the compliance of their activity‘ with the law of June 9, 2023.

         

        The obligations imposed on commercial messages created by the influencer

        The law sets forth obligations that influencers must adhere to regarding their publications: 

        • Mandatory particulars: When creating content, this law imposes an obligation on influencers to provide information to consumers, aiming for transparency towards their audience. Thus, influencers are required to clearly, legibly, and identifiably indicate on the influencer’s image or video, regardless of its format and throughout the entire viewing duration (according to modalities to be defined by decree):

          – The mention “advertisement” or “commercial collaboration.” Violating this obligation constitutes deceptive commercial practice punishable by two years’ imprisonment and a fine of €300,000 (Article 5 of the law of June 9, 2023).
          – The mention of “altered images” (modification by image processing methods aimed at refining or thickening the silhouette or modifying the appearance of the face) or “virtual images” (images created by artificial intelligence). Failure to do so may result in a one-year prison sentence and a fine of €4,500 (Article 5 of the law of June 9, 2023).

        • Prohibited or regulated promotions: This law reminds certain prohibitions, subject to criminal and administrative sanctions, stemming from French law on the direct or indirect promotion of certain categories of products and services, under penalty of criminal or administrative sanctions. This includes the promotion of products and services related to:

          – health: surgery, aesthetic medicine, therapeutic prescriptions, and nicotine products;
          – non-domestic animals, unless it concerns an establishment authorized to hold them;
          – financial: contracts, financial products, and services;
          – sports-related: subscriptions to sports advice or predictions;
          – crypto assets: if not from registered actors or have not received approval from the AMF;
          – gambling: their promotion prohibited for those under 18 years old and regulated by law;
          – professional training: their promotion is not prohibited but regulated.

         

        The accountability of influencer behaviour

        The law also holds influencers accountable from the contracting of their relationships and when they act as sellers:

        • Regulation of commercial influence agreements: This law imposes, subject to nullity, from a certain threshold of influencer remuneration (defined by decree), the formalization in writing of the agreement between the advertiser and the influencer, but also, if applicable, between the influencer’s agent, and the mandatory stipulation of certain clauses (remuneration, mission description, etc.).
        • Influencer responsibility as a cyber seller: Influencers engaging in drop shipping (selling products without handling their delivery, done by the supplier) must provide the buyer with all information in French as required by Article L. 221-5 of the Consumer Code about the product, such as its availability and legality (i.e., guarantee that the product is not counterfeit), applicable product warranty, and supplier identity. Additionally, influencers must ensure the proper delivery and receipt of products and, in case of default, compensate the buyer. Influencers are also logically subject to obligations regarding deceptive commercial practices (for more information, the DGCCRF website explain the dropshipping).

         

        The accountability of other actors in the commercial influence ecosystem

         

        Joint and several liability is set by law, for the advertiser, influencer, or influencer’s agent for damages caused to third parties in the execution of the commercial influence contract, allowing the victim of the damage to act against the most solvent party.

        Furthermore, the law introduces accountability for online platforms by partially incorporating the European Regulation 2022/2065 on digital services (known as the “DSA“) of October 19, 2022.

         

        French regulation and international influencers

         

        Influencers established outside the European Union (including also Switzerland and the EEA) who promote products or services to a French audience must obtain professional liability insurance from an insurer established within the EU. They must also designate a legal or natural person providing “a form of representation” (SIC) within the EU. This representative (whose regime is not very clear) is remunerated to represent the influencer before administrative and judicial authorities and to ensure the compliance of the influencer’s activity with law of June 9, 2023.

        Furthermore, according to law of June 9, 2023, when the contract binding the influencer (or their agency) aims to implement a commercial influence activity electronically “targeting in particular an audience established in French territory” (SIC), this contract should be exclusively subject to French law (including the Consumer Code, the Intellectual Property Code, and the law of June 9, 2023). According to this law, the absence of such a stipulation would be sanctioned by the nullity of the contract. Law of June 9, 2023, seems to be established as an overriding mandatory law capable of setting aside the choice of a foreign law.

        However, the legitimacy (what about compliance with the definition of overriding mandatory rules established by Regulation Rome I?) and effectiveness (what if the contract specifies a foreign law and a foreign jurisdiction?) of such a legal provision can be questioned, notably due to its vague and general wording. In fact, it should be the activity deployed by the “foreign” influencer to their community in France that should be apprehended by French overriding mandatory rules, rather than the content of the agreement concluded with the advertiser (which itself could also be foreign, by the way).

         

        The other regulations governing the activity of influencers

         

        The European regulations

        The DSA further holds influencers accountable because, in addition to the reporting mechanism imposed on platforms to report illicit content (thus identifying a failing influencer), platforms must ensure (and will therefore shift this responsibility to the influencer) the identification of commercial communications and specific transparency obligations towards consumers.

        The «soft law»

        As early as 2015, the Advertising Regulatory Authority (“ARPP”) issued recommendations on best practices for digital advertising. Similarly, in March 2023, the French Ministry of Economy published a “code of conduct” for influencers and content creators. In 2023, the European Commission launched a legal information platform for influencers. Although non-binding, these rules, in addition to existing regulations, serve as guidelines for both influencers and content creators, as well as for judicial and administrative authorities.

         

        The special status of child influencers

        The law of October 19, 2020, aimed at regulating the commercial exploitation of children’s images on online platforms, notably opens up the possibility for child influencers to be recognized as salaried workers. However, this law only targeted video-sharing platforms. Article 2 of the law of June 9, 2023, extended the provisions regarding child influencer labor introduced by the 2020 law to all online platforms. Finally, a recent law aimed at ensuring respect for the image rights of children was published on February 19, 2024, introducing a principle of joint and several responsibility of both parents in protecting the minor’s image rights.

         

        The status and remuneration of influencers: uncertainty persists

         

        Despite the diversity of regulations applicable to influencers, none address their status and remuneration.

        The status of the influencer

        In the absence of regulations governing the status of influencers, a legal ambiguity persists regarding whether the influencer should be considered an independent contractor, an employee (as is partly the case for models or artists), or even as a brand representative (i.e. commercial agent), depending on the missions contractually entrusted to the influencer.

        The nature of the contract and the applicable social security regime stem from the missions assigned to the influencer:

        • In the case of an employment contract, the influencer will fall under the general regime for employees and assimilated persons, based on Articles L. 311-2 or 311-3 of the French Social Security Code.
        • In the case of a service contract, the influencer will fall under the regime for self-employed workers.

         

        The existence of a relationship of subordination between the advertiser and the influencer typically determines the qualification of an employment contract. Subordination is generally characterized when the employer gives orders and directives, has the power to control and sanction, and the influencer follows these directives. However, some activities are subject to a presumption of an employment contract; this is the case (at least in part) for artist contracts under Article L. 7121-3 of the French Labor Code and model contracts under Article L. 7123-2 of the French Labor Code.

         

        The remuneration of the influencer

        The influencer can be remunerated in cash (fixed or proportional) and/or in kind (for example: receiving a product from the brand, invitations to private or public events, coverage of travel expenses, etc.). The influencer’s remuneration must be specified in the influencer agreement and is directly impacted by the influencer’s status, as certain obligations (minimum wage, payment of social security contributions, etc.) apply in the case of an employment contract.

        Furthermore, the remuneration (for the influencer’s services) must be distinguished from that of the transfer of their copyrights or image rights, which are subject to separate remuneration in exchange for the IP rights transferred.

         

        The influencers… in the spotlight

        The law of June 9, 2023, grants the French authority (i.e. the Consumer Affairs, Competition and Fraud Prevention Agency, “DGCCRF”) new injunction powers (with reinforced penalties). This comes in addition to the recent creation of a “commercial influence squad“, within the DGCCRF, tasked with monitoring social networks, and responding to reports received through Signal Conso. The law provides for fines and the possibility of blocking content.

        As early as August 2023, the DGCCRF issued warnings to several influencers to comply with the new regulations on commercial influence and imposed on them the obligation to publicly disclose their conviction for non-compliance with the new provisions regarding transparency to consumers on their own social networks, a heavy penalty for actors whose activity relies on their popularity (DGCCRF investigation on the commercial practices of influencers).

        On February 14, 2024, the European Commission and the national consumer protection authorities of 22 EU member states, Norway, and Iceland published the results of an analysis conducted on 570 influencers (the so-called “clean-up operation” of 2023 on influencers): only one in five influencers consistently presented their commercial content as advertising. 

        In response to environmental, ethical, and quality concerns related to “fast fashion,” a draft law aiming to ban advertising for fast fashion brands, including advertising done by influencers (Proposal for a law aiming to reduce the environmental impact of the textile industry), was adopted by the National Assembly on first reading on March 14, 2024.

        Lastly, the law of June 9, 2023, has been criticized by the European Commission, which considers that the law would contravene certain principles provided by EU law, notably the principle of “country of origin,” according to which the company providing a service in other EU countries is exclusively subject to the law of its country of establishment (principle initially provided for by the E-commerce Directive of June 8, 2000, and included in the DSA). Some of its provisions, particularly those concerning the application of French law to foreign influencers, could therefore be subject to forthcoming – and welcome – modifications.

        Summary

        To avoid disputes with important suppliers, it is advisable to plan purchases over the medium and long term and not operate solely on the basis of orders and order confirmations. Planning makes it possible to agree on the duration of the ‘supply agreement, minimum volumes of products to be delivered and delivery schedules, prices, and the conditions under which prices can be varied over time.
        The use of a framework purchase agreement can help avoid future uncertainties and allows various options to be used to manage commodity price fluctuations depending on the type of products , such as automatic price indexing or agreement to renegotiate in the event of commodity fluctuations beyond a certain set tolerance period.

        I read in a press release: “These days, the glass industry is sending wine companies new unilateral contract amendments with price changes of 20%…”

        What can one do to avoid the imposition of price increases by suppliers? 

        • Know your rights and act in an informed manner
        • Plan and organise your supply chain

        Does my supplier have the right to increase prices?

        If contracts have already been concluded, e.g., orders have already been confirmed by the supplier, the answer is often no.

        It is not legitimate to request a price change. It is much less legitimate to communicate it unilaterally, with the threat of cancelling the order or not delivering the goods if the request is not granted.

        What if he tells me it is force majeure?

        That’s wrong: increased costs are not a force majeure but rather an unforeseen excessive onerousness, which hardly happens.

        What if the supplier canceled the order, unilaterally increased the price, or did not deliver the goods?

        He would be in breach of contract and liable to pay damages for violating his contractual obligations.

        How can one avoid a tug-of-war with suppliers?

        The tools are there. You have to know them and use them.

        It is necessary to plan purchases in the medium term, agreeing with suppliers on a schedule in which are set out:

        • the quantities of products to be ordered
        • the delivery terms
        • the durationof the agreement
        • the pricesof the products or raw materials
        • the conditions under which prices can be varied

        There is a very effective instrument to do so: a framework purchase agreement.

        Using a framework purchase agreement, the parties negotiate the above elements, which will be valid for the agreed period.

        Once the agreement is concluded, product orders will follow, governed by the framework agreement, without the need to renegotiate the content of individual deliveries each time.

        For an in-depth discussion of this contract, see this article.

        • “Yes, but my suppliers will never sign it!”

        Why not? Ask them to explain the reason.

        This type of agreement is in the interest of both parties. It allows planning future orders and grants certainty as to whether, when, and how much the parties can change the price.

        In contrast, acting without written agreements forces the parties to operate in an environment of uncertainty. Suppliers can request price increases from one day to the next and refuse supply if the changes are not accepted.

        How are price changes for future supplies regulated?

        Depending on the type of products or services and the raw materials or energy relevant in determining the final price, there are several possibilities.

        • The first option is to index the price automatically. E.g., if the cost of a barrel of Brent oil increases/decreases by 10%, the party concerned is entitled to request a corresponding adjustment of the product’s price in all orders placed as of the following week.
        • An alternative is to provide for a price renegotiation in the event of a fluctuation of the reference commodity. E.g., suppose the LME Aluminium index of the London Stock Exchange increases above a certain threshold. In that case, the interested party may request a price renegotiationfor orders in the period following the increase.

        What if the parties do not agree on new prices?

        It is possible to terminate the contract or refer the price determination to a third party, who would act as arbitrator and set the new prices for future orders.

        Renata Antiquera

        Áreas de prática

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        Contato Renata

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          France – Sudden termination of international contract

          17 de Junho, 2024

          • França
          • Contratos

          How real estate tokenisation works, what is the regulatory framework, and what rights investors actually acquire?

          Real estate tokenisation, already present in Spain for several years, is no longer a futuristic promise but a tangible reality in the Spanish market. It represents more than just a technological innovation: it signifies a profound transformation in how we understand ownership, investment, and liquidity within the real estate sector — one of the most traditional and tightly regulated areas of our economy.

          What is real estate tokenisation and how does it work?

          In essence, to tokenise a property today means converting the economic rights associated with that asset into digital units that can circulate on blockchain-based platforms. Each token represents a fraction of those economic rights, allowing investors with more modest capital to access a market that has traditionally required substantial investments.

          The role of smart contracts

          Tokens operate through smart contracts that automatically execute the distribution of rental income or resale proceeds of that partial representation of the property, including any potential difference in value, eliminating intermediaries and providing transparency to the process. This automation is not merely cosmetic: it reduces operational costs, speeds up transactions, and potentially increases the liquidity of assets that have historically been among the least liquid in the market.

          The legal reality: what is actually tokenised in Spain

          It is essential to clarify from the outset a key point often blurred by marketing discourse: in practice, real estate tokenisation projects in Spain do not tokenise the property itself but rather the economic rights linked to a corporate vehicle (usually a special purpose vehicle, or SPV) that owns the property. Spanish law only allows the tokenisation of shares in joint-stock companies (sociedades anónimas) using distributed ledger technology; shares in limited liability companies (sociedades limitadas) cannot be tokenised. This means that if the SPV is a limited liability company, its shares cannot be directly tokenised — only other instruments such as participative loans or credit rights over income streams can be represented as tokens. Only if the SPV is incorporated as a joint-stock company is it legally possible to tokenise its shares.

          What rights does a real estate token investor actually acquire?

          An investor who acquires a token does not become a direct co-owner of the property. Depending on the structure chosen, they may become a shareholder in a tokenised joint-stock company that owns the property or a holder of economic rights derived from participative loans or other indirect forms of economic participation issued by the SPV that owns the asset. The distinction is crucial: if the company faces solvency issues or bankruptcy, the value of the token collapses with it, and the investor cannot exercise any direct real rights over the property.

          Spanish law, rooted in centuries of land registry tradition, does not currently allow the transfer of real property rights through the mere transfer of tokens; a public deed and registration are required for the transfer to be effective against third parties. The SPV structure is therefore a compromise between technological possibilities and the demands of the current legal framework.

          Regulatory framework for real estate tokenisation in Spain

          CNMV authorisation and the 2023 Securities Market Law

          The Spanish regulator has begun to establish a legal foundation for this technology to develop within a secure framework. In 2023, the Spanish National Securities Market Commission (CNMV) authorised Adventurees Capital PFP as the first crowdfunding platform to issue tokenised securities — a milestone in the convergence of crowdfunding and blockchain. This authorisation was accompanied by the approval of Law 6/2023 on the Securities Market, which expressly recognises the representation of transferable securities through distributed ledger technologies such as blockchain, granting them full legal validity.

          The role of the Land Registry in the blockchain era

          In parallel, the Spanish Association of Land Registrars is exploring how to integrate blockchain technology into the registry system, although it is important to clarify the real scope of these initiatives. Current projects focus mainly on complementary applications such as digital management of the Building Book or improved traceability and accessibility of registry information. They do not aim to replace the fundamental pillars of the system: execution of public deeds before a notary and registration of ownership, which remain absolutely mandatory for the transfer of real rights over property. Registrars are firm in their institutional stance: blockchain can complement and streamline document management, but it cannot replace the legal control exercised by the registrar or the protection of third parties offered by the Land Registry — both essential components of the Spanish legal system. This position reflects the current limitation of the model: tokens circulate on the blockchain representing positions in SPVs or economic rights over them, but the actual ownership of the property remains anchored in the traditional registry system, held by the corporate vehicle, and any transfer of that ownership must still follow the conventional legal process with all its guarantees.

          European regulation: ECSPR, MiCA and the DLT Pilot Regime

          Spain also benefits from a European regulatory framework that is positioning the EU as a global leader in digital asset regulation. The European Crowdfunding Service Providers Regulation (ECSPR) harmonises the rules for crowdfunding platforms, allowing an authorised platform in one Member State to operate across the EU through the so-called “European passport”. The MiCA Regulation, which came fully into force on 30 December 2024, broadly regulates crypto-asset markets, setting obligations for both issuers and service providers. The DLT Pilot Regime (EU Regulation 2022/858) allows market infrastructures based on distributed ledger technology to operate under certain temporary exemptions, creating a controlled testing environment to assess the potential of these technologies in financial markets.

          The Spanish regulator’s approach could be described as cautiously supportive: innovation is encouraged, but strict compliance with anti-money laundering, customer identification, and disclosure obligations is required to protect investors. This is not technological laissez-faire, but rather an effort to integrate innovation within a solid framework of legal guarantees.

          Legal challenges and risks of real estate tokenisation

          The risks of the SPV structure

          The legal challenges that remain are significant and deserve attention. The SPV structure, while legally viable, introduces an additional layer of complexity and risk that must be clearly communicated to investors. Unlike direct ownership — where the investor holds real rights over the property enforceable against third parties — in the current tokenised model, investors hold positions in indirect forms of economic participation (shares, participative loans, credit rights) linked to the company that owns the property. This has important implications for corporate liability, taxation, and insolvency protection.

          The disconnect between the on-chain and off-chain worlds

          It is also essential to understand that the connection between the “on-chain” world (where tokens circulate) and the “off-chain” world (where property rights are recorded) is neither direct nor automatic. Transferring a token does not in itself alter the Land Registry: ownership of the property remains with the SPV regardless of who holds the tokens, and only a duly notarised and registered deed can change that ownership. The exploratory projects of the Land Registrars aim to improve efficiency in information management but do not alter this fundamental principle. As in any emerging market, it is essential to prevent fraudulent schemes that promise unrealistic returns or market tokens without proper legal backing.

          Practical implications for investors and legal practitioners

          For legal practitioners, real estate tokenisation may require adapting contracts, corporate bylaws, and financing structures to an environment where rights circulate digitally and in a decentralised manner. For investors, it offers an opportunity to diversify portfolios with smaller capital contributions and greater liquidity potential than traditional real estate investment, provided they understand that they are not acquiring direct ownership of the property but rather a financial position linked to the corporate structure that owns it. And for the wider economy, it could invigorate a real estate market worth trillions of euros by facilitating the entry of retail capital previously excluded from such investments.

          The future of real estate tokenisation in Spain

          This is an evolution that combines law, technology, and finance in an inseparable way. It is essential to understand that tokenisation is not a passing trend but a tool that, when properly used and regulated, can transform access to one of society’s most valuable assets — property. However, this transformation currently operates through intermediate corporate structures and indirect forms of economic participation, not through direct ownership as commercial language sometimes suggests. It certainly does not imply an immediate revolution of Spain’s land registration system, whose fundamental guarantees remain intact.

          It is quite common for business relationships with agents or distributors to last for years without any signed documents. And be careful, because we know that a contract can exist even verbally.

          The absence of a written contract will add difficulties in the event of a possible claim, so what you do between the decision to terminate, and the moment of the claim is very important. Remember: ‘anything you write will be used against you’.

          The decision to terminate a business relationship is a very delicate moment to which, for some reason, solicitors are not invited. Here are some examples (all real) in which companies or employees with the best of intentions wrote to the agent/distributor. All of them were subsequently very damaging to the company:

          Saying ‘We are terminating our business relationship’ when the strategy will be to argue that no such business relationship exists, but rather that there are separate and linked contracts (e.g., supply rather than ongoing distribution contract; very significant compensation consequences).

          ‘You no longer represent our company’, which may be evidence that you did so before.

          ‘As of day X, you may no longer act on behalf of our company,’ which would prove that you were previously able to act on its behalf.

          ‘You may not attend the X trade fair on our behalf.’ A way of confirming that the agent/distributor’s responsibilities included participating in trade fairs and probably accrediting the customers obtained.

          ‘The sales you promoted have been significantly reduced in year N.’ When there is no written contract or other form of documentation, imputing a breach of an obligation that is not clear can be counterproductive.

          Saying ‘You are not actively promoting our products’ and then adding: ‘We urge you to stop promoting the sale of our products’.

          ‘You are no longer our exclusive representative’, which proves a type of relationship (representation/agent) and a tacit or express agreement (‘exclusivity’).

          ‘We have appointed another representative in your area’, which shows that the agent/distributor had an assigned area and was “representing”.

          ‘From this moment on, orders will be handled by X’, which also confirms a type of relationship.

           

          In summary: from the moment the company considers terminating a commercial relationship, especially when it is not in writing and before sending any letter, it is advisable to think carefully about the strategy in case of a possible claim. This is the best time to seek advice and avoid surprises. Any communication that is not in line with this strategy designed from the outset can only lead to confusion and problems.

          Since the General Data Protection Regulation (GDPR) took effect in 2018, the European Union (EU) has granted adequacy status to only a limited number of jurisdictions — those whose data protection regimes are deemed to provide an “essentially equivalent” level of protection to that of the EU. The current list includes Andorra, Argentina, Canada (under PIPEDA), Faroe Islands, Guernsey, Isle of Man, Israel, Japan, Jersey, New Zealand, South Korea, Switzerland, Uruguay, the United Kingdom, and the United States (limited to companies certified under the Data Privacy Framework).

          As of 5 September 2025, Brazil is on the verge of joining this exclusive group. The European Commission has issued a draft adequacy decision concluding that the Brazilian General Data Protection Law (Lei Geral de Proteção de Dados Pessoais – LGPD), in conjunction with Brazil’s broader legal and constitutional framework, offers protections that are essentially equivalent to those found in the GDPR. While Brazil’s rules offer somewhat more flexibility in specific areas of data processing, the foundational principles and safeguards are well-aligned with EU standards.

          Once finalized, the adequacy decision will authorize the free flow of personal data from the EU to Brazil without the need for additional contractual clauses or technical safeguards. Such a development is not just regulatory — it also answers a core political argument made by LGPD advocates since its inception: that the absence of a comprehensive data protection framework was undermining Brazil’s international competitiveness by limiting data flows and discouraging investment. For businesses, the EU decision may finally mean the removal of a significant layer of compliance complexity — a development especially welcome by small and medium-sized enterprises engaged in cross-border trade or service provision. The draft is currently under review by the European Data Protection Board (EDPB) and the Member States of the EU.

          The Commission’s assessment highlights several key aspects of Brazil’s data protection landscape. It begins by noting that the Brazilian Constitution expressly guarantees the right to privacy and the protection of personal data — a notable distinction among non-EU jurisdictions. These protections are further supported by Brazil’s ratification of the American Convention on Human Rights and its recognition of the jurisdiction of the Inter-American Court of Human Rights, reinforcing a commitment to fundamental rights and democratic oversight.

          The LGPD mirrors the GDPR in many critical respects and defines its territorial scope clearly. It applies to: (i) data processing carried out within Brazilian territory, (ii) the offering of goods or services to individuals in Brazil, and (iii) data collected in Brazil, even if subsequently processed abroad. This aligns well with the extraterritorial provisions of the GDPR. The definitions of personal data, sensitive data, controller, and processor are materially similar, as are the key principles governing processing — including lawfulness, purpose limitation, data minimization, accuracy, transparency, and security. The law expressly excludes anonymized data from its scope and establishes specific exemptions for journalistic activities, public security, and scientific research.

          Another strength is Brazil’s institutional framework. The National Data Protection Authority (ANPD) was recently transformed into an autonomous regulatory agency, enhancing its independence and technical capacity. The ANPD holds both regulatory and enforcement powers: it can issue binding regulations, impose administrative sanctions, and publish authoritative guidance. To date, it has issued key guidelines on topics such as consent, legitimate interest, the role of the Data Protection Officer (DPO), and security incident reporting. Internationally, the ANPD is an active participant in global data protection dialogue — it is a member of the Global Privacy Assembly and an official observer to the Council of Europe’s Convention 108.

          The LGPD’s approach to international data transfers is also structurally aligned with the GDPR. It requires appropriate safeguards such as standard contractual clauses, allows for future adequacy decisions under a regime comparable to Article 45 of the GDPR, and includes detailed provisions for onward transfers and transit data — that is, data merely passing through Brazil without further processing. The rights of data subjects are robust and familiar to European practitioners: access, rectification, erasure, portability, and withdrawal of consent are guaranteed. Lawful bases for processing are also aligned — including consent, legal obligations, contract execution, and legitimate interest. Notably, the LGPD requires a documented balancing test when relying on legitimate interest, bringing additional accountability to this flexible legal basis.

          Security incidents involving personal data must be notified to both the ANPD and affected data subjects when there is a significant risk of harm. The standard notification deadline is 72 hours, and the required content aligns closely with Articles 33 and 34 of the GDPR. The ANPD may also order public disclosure of incidents or require remedial measures, depending on the nature and scope of the breach.

          Importantly, this process is not one-sided. In parallel to the European Commission’s adequacy decision, the ANPD is conducting its own adequacy assessment of the EU and EEA data protection frameworks. This process is regulated by the Brazilian Resolution CD/ANPD No. 19/2024, which governs international data transfers. Once the technical and legal evaluation is complete, the ANPD’s Board of Directors will issue a formal decision. This reciprocal move reflects Brazil’s commitment to mutual recognition and regulatory symmetry — a positive signal for companies on both sides of the Atlantic.

          In conclusion: If confirmed, Brazil’s adequacy status will simplify international operations, reduce compliance costs, and expand opportunities for data-driven business and legal cooperation. For European lawyers advising SMEs with interests in Latin America, this development is a strategic signal: Brazil is emerging not just as a growing market, but as a legally compatible and data-safe jurisdiction for international partnerships.

          Remember the USA – EU agreement on 15% tariffs? I wrote that with a negotiator like Trump the game is never over (article here) and—after the recent interlude featuring a threat of 100% tariffs on pharmaceuticals—the U.S. government has announced the imposition of an overall 107% duty on Italian pasta, which could take effect on January 1, 2026.

          Where this new duty comes from

          The antidumping investigation was launched by the U.S. Department of Commerce at the request of certain competing American companies and is based on a 1996 antidumping order that allows for periodic reviews of imports of Italian pasta. The Department of Commerce conducts these checks annually to assess whether Italian producers are selling pasta at prices lower than the U.S. domestic market, a practice known as “dumping.”

          Companies involved in the investigation

          The Department of Commerce selected two sample companies for in-depth analysis, defined as “mandatory respondents”: La Molisana and Pastificio Lucio Garofalo. According to the official document published by the U.S. administration, for the period from July 1, 2023 to June 30, 2024, both companies allegedly sold their products below market prices, resulting in the imposition of a duty of 91.74%.

          U.S. authorities justified this percentage by claiming the two companies did not provide complete or compliant information as requested by the Department and were therefore insufficiently cooperative during the investigation. What is very important is that, in addition to the two companies directly examined, the additional 91.74% duty is also applied to numerous other Italian producers not individually reviewed. This methodology, while formally permitted under U.S. law as an exception, is being applied without any direct verification of the other companies.

          Next steps in the procedure

          Italy’s Ministry of Foreign Affairs moved immediately, formally intervening in the proceeding as an “interested party” through the Italian Embassy in Washington. The Foreign Ministry is working in close coordination with the companies concerned and, in concert with the European Commission, to persuade the U.S. Department to revise the provisional duties.

          The two companies involved (La Molisana and Garofalo) can submit documentation to contest the dumping allegations. However, if dumping is confirmed, the Department of Commerce will instruct Customs to apply antidumping duties on goods sold and entered into U.S. commerce.

          The preliminary nature of this determination means there is still room to change the decision before it becomes final.

          Possible effective date

          The new super-duty of 91.74%, which will be added to the existing 15% tariff for a total of 107%, is scheduled to take effect on January 1, 2026. This date therefore represents a crucial deadline for all ongoing diplomatic and legal actions.

          If confirmed, the economic impact would be significant: in 2024, Italian pasta exports to the United States reached a value of €671 million according to Coldiretti, accounting for nearly 17% of the sector’s total exports. A 107% duty would risk seriously undermining competitiveness in one of the most important markets for Italian agri-food products.

           What to do between now and January 1, 2026?

          At this stage, the entry into force of the new duty depends on the outcome of the ongoing procedure: given what has happened in recent months, and the political use the U.S. administration has made of tariffs—well beyond their technical function—it is reasonable to be pessimistic.

          So, what to do? In recent months we have seen companies react to the uncertainty over the fate of the tariffs in three ways:

          • Some rushed to ship as many products as possible before the potential effective date of the duty;
          • Some granted—upfront—discounts equivalent to the threatened duty, in case it came into force;
          • Some suspended orders, pending definitive news on the impact of the duties.

          These are all  valid options, but other effective tools for managing the uncertainty caused by the flurry of announcements, negotiations, and threats from the U.S. administration should not be forgotten: the risk of new duties being introduced, or existing ones being increased, can be managed in the contract by agreeing with the U.S. importer how any tariff change will affect the product.

          The parties can stipulate, for example, that the increase will be split equally; or that the importer will bear it beyond a certain threshold; or that if the duty exceeds a certain level, the contracts may be terminated. You can find a deeper dive in this article.

          The only certainty is that trade relations with the U.S. will stay unpredictable for a long time, and it’s vital to carefully manage the risk factors involved in selling products there. Right now, the focus is on tariffs and prices, and I encourage you to take this chance to thoroughly review existing agreements and assess whether—and how—other important points are addressed that could entail significant liabilities: we discuss them, very practically, in this book.

          A dedicated notary account in Brazil is a legal mechanism that brings greater security, transparency, and reliability to financial transactions. Regulated under Law 8.935/1994 and Provision No. 197/2025, this service allows notaries to receive, manage, and release funds only after contractual conditions have been fulfilled. By ensuring segregation of assets, traceability, and impartial oversight, dedicated notary accounts provide an effective escrow-like solution for real estate deals, mergers and acquisitions, import/export operations, high-value asset purchases, and complex commercial contracts. This tool not only reduces legal risks and potential disputes but also strengthens trust between parties by guaranteeing that payments are safeguarded until obligations are met.

          The legal basis can be found in Law 8.935/1994, § 1 of art. 7-A, which allows notaries to receive, deposit, and manage amounts related to legal transactions, with transactions subject to objectively verifiable facts/conditions. Provision No. 197, dated June 13, 2025, regulates, at the national level, the service of notarial accounts linked to Notary Public Offices.

          Practical applications: among others, in the following transactions:

          • Real estate: guarantee that the down payment and settlement amounts will be secured in a specific account. This mitigates the risk of misappropriation of funds and ensures that the money will be released only after all contractual conditions have been met.
          • M&A: the linked notarial account creates a standardized escrow mechanism for the payment of price/holdbacks/earn-outs and conditional obligations.
          • Purchase and Sale of High-Value Movable Property: the linked account can be used to guarantee payment. The buyer deposits the amount and the seller knows that the money is safe, being released only after the transfer of ownership and delivery of the goods.
          • Import and Export: the transaction amount can be deposited with the notary and released to the exporter only after confirmation of delivery of the goods in the destination country, for example.
          • Guarantee of Obligations: In any contract that provides for the payment of a sum of money as a guarantee, the notary account can be used to provide greater security to the parties.
          • Supply, EPC/turnkey, and construction contracts: performance retentions, milestone acceptance (commissioning, as-built, issuance of ART/CREA), and payment against formal acceptance.
          • Contractual joint ventures and commercial partnerships: advances conditional on licenses, authorizations, or competitive approval, where applicable.

          Reduction of Legal Risks: The use of linked accounts reduces the chances of litigation related to lack of clarity about the origin and destination of funds. Companies can clearly demonstrate that payments were made and held by an impartial and secure institution.

          Operational structure: limited to banking entities affiliated with the CNB, which must ensure the segregation of assets, traceability through audit trails, and proof of all transactions. The authorization of the delegate requires prior accreditation and electronic registration of the essential details of the transaction and its conditions in the CNB system, with access restricted to the parties and the notary.

          Specific Purpose: amounts received as payment, guarantee, or advance payment as a result of notarial acts must be deposited in a bank account linked to the specific act and may only be moved for the purpose for which they are intended.

          Transparency and Traceability: With the linked notarial account, it is possible to clearly track the financial flow of each transaction, which increases transparency for all parties and for supervisory bodies.

          Verification of conditions and release. Once the objective conditions have been met, the notary authorizes the transfer to the recipients and files the proof of verification. In the event of a dispute between the parties, the notary suspends any movement, draws up a notarial deed, and advises on a consensual or judicial solution, without deciding on the effectiveness/termination of the transaction; if the transaction is frustrated and no solution is found, the procedure is terminated and the amounts are returned to the depositor, in accordance with the agreed clauses.

          Confidentiality and access. In transactions with a confidentiality clause, the notary public maintains confidentiality and does not issue certificates regarding the content of the transaction; documents are accessible only for correctional purposes or by court order.

          Remuneration and costs. The notary’s remuneration for the notarial account service is paid by the financial institution under the terms of the agreement, and the transfer of additional costs to the user is prohibited, without prejudice to fees for any related notarial acts.

          Article 442-1.II of the French Commercial Code (former Article L. 442-6.I.5 °) sanctions the termination by a trader of a written contract or an informal business relationship without giving sufficient written prior notice. Over the last twenty years, this article became the recurring legal basis for all compensation actions (up to 18 months of gross margin, plus other damages) when a commercial relationship or a contract ends (totally or even partially).

          Therefore, a foreign trader who contracts with a French company should try not to fall under the aegis of this rule (part I) and, if it cannot, should understand and control its implementation (part II).

          In a nutshell:

          How can a foreign company avoid or control the risk linked to the “sudden termination of commercial relations” set by French law? Foreign companies doing business with a French counterpart should:

          • enter, as soon as possible, into a written (frame) agreement with their French suppliers or customers, even for a very simple relation and;
          • stipulate a clause in favour of foreign court or arbitration and foreign applicable law while, failing to choose it, they would rather be subject to French courts and laws;

          How can a foreign company master the risk linked to the “sudden termination of commercial relations” set by French law? Foreign companies doing business with a French counterpart should:

          • know that this article applies to almost all type of commercial relationship or contracts, whether written or not, fixed-term or not;
          • check whether its relation/contract is sufficiently long, regular and significant and whether the other party has a legitimate belief in the continuation of this relation/contract;
          • give a written notice of termination or non-renewal (or even of a major modification), which length takes mainly into account the duration of the relation, irrespectively of the length of the contractual notice;
          • invoke, with cautiousness, force majeure and gross negligence of the party, to set aside “sudden termination”;
          • anticipate, in case of insufficient notice, a compensation which amount is the product of the average monthly gross margin per the length of non-granted prior notice.

          How to avoid the application of the French “Sudden Termination” rule?

          In international matters, a foreign company must anticipate whether its relationship will be subject or not to French law before terminating a contract or a business relationship and, in case of dispute, whether it will be brought before a French court or not.

          What will be the law applicable to “Sudden Termination”?

          It is quite difficult for a foreign company to correctly grasp the French legal framework of conflict of laws rules applicable to “sudden termination”. In a ruling of September 19, 2018 (RG 16/05579, DES/ Clarins), the Court of appeal of Paris made, by an implicit reference to the Granarolo EU ruling (07 14 16, N°C196/15) an extension of the contractual qualification to most of the business relationships which will improve foreseeability in order for a foreign company to try to exclude French law and its “sudden termination” rule.

          Sudden termination of a written contract or of a “tacit contractual relationship”

          According to Rome I Regulation (EC No 593/2008, June 17 2008) on the law applicable to contracts:

          – In case of choice of a foreign law by the parties: The clause selecting a foreign applicable law will be valid and respected by French judges (subject to OMR, see below), provided that the choice of law by the parties is express or certain.

          – In case of no choice by the parties: French law will likely to be declared applicable as it might be either the law of the country where is based the distributor/franchisee, etc. or the law of the country where the party who is to provide the service features of the contract has its domicile.

          Sudden termination of a “non-tacit contractual relationship”

          In case of informal relationship (i.e. orders placed from time to time), French judges would retain the tort qualification and will refer to the Rome II Regulation (No 864/2007, July 11 2007) on the law applicable to non-contractual obligations..

          – In case of choice of a foreign law by the parties: a properly drafted choice of foreign law clause should be implemented by a French judge, provided that it expressly includes tort cases.

          – In case of no choice of law by the parties: French law will likely to be declared applicable as it might be the law of the country where the damage occurs (regardless of the place of the causing event or that of the indirect consequences), which is the place of the head office where the French victim suffers the consequences of the termination.

          “Sudden Termination” rule, a French Overriding Mandatory Rule?

          The position of French courts is quite vague and unsatisfactory, and this has been the case for a long time. To make it short: the Commercial Court of Paris judges that “sudden termination” is not an OMR, the Court of appeal of Paris (sole French appellate court in charge of “sudden termination” cases) is also not in favour of the OMR qualification on the grounds that the text “protects purely private economic interests” (CA Paris, pôle 5, ch. 5, Feb 28. 2019, n° 17/16475 / CA Paris, pôle 5, ch. 5, Oct 8. 2020, n°17/19893). Recently, the Paris Court of Appeal reaffirmed that the rules on sudden termination of established commercial relations are not an OMR (Court of appeal Paris, March 11, 2021, n° 18/03112).

          The French Supreme Court has never explicitly addressed the issue (OMR or not OMR). Indeed, the French Supreme Court ruled in the Expedia case (Cass. com., July 8, 2020, n°17-31.536) that the provisions of the former article L. 442-6, I, 2º and II, d), about “significant imbalance” (which is in the same set of rules than “Sudden termination”) are OMR. However, this qualification should be limited to the specific action brought by the Ministry of Finance and not be applicable to an action by a private party. Moreover, some courts may be tempted to invoke the provisions of French law n°2023-221 (March 30, 2023, aka Egalim III) to qualify Sudden termination rule as an OMR, however this text (article L 444-1.A Commercial code) does not quote expressly OMR and set no justification whatsoever to set such a qualification.

          Consequently, if a claim for “sudden termination” is brought to a French court, there is still a  risk that the latter would exclude the applicable foreign law and replace it with the regime resulting from the “sudden termination” of Article L 442-1. II. However, to avoid this risk, a foreign company would better not only choose a foreign governing law but also stipulate that the dispute will be brought before a foreign judge or an arbitral tribunal.

          How to avoid jurisdiction of French court over a “Sudden Termination” claim?

          “Sudden Termination” claim and intra EU co-contractor

          The ECJ ruling (Granarolo, July 14, 2016, N°C196/15) created a distinction between claims occurring from:

          – written framework contract or tacit contractual relationship (existing only if the body of evidences listed by the ECJ are identified by national judges, i.e. length of relation and commitments recognized to each other, such as exclusivity, special price or terms of delivery or payment, non-competition, etc.): such claim has a contractual nature according to conflict of jurisdiction rules under Brussels I recast Regulation;

          – informal relationship which is a non–tacit contractual relationship (i.e. orders placed from time to time): such a request has a tort nature under Brussels I recast ;

          To be noted: the so-called Egalim III law has no impact on the EU rules on jurisdiction clauses.

          (a) Who is the Judge of the “sudden termination” of a written contract or of a “tacit contractual relationship”?

          – Jurisdiction clause for the benefit of a foreign court will be enforced by French courts, even though it is an asymmetrical clause (Court of cassation, October 7, 2015, Ebizcuss.com / Apple Sales International).

          – In case of lack of choice of court clause, French courts are likely to have jurisdiction if the French claimant bringing a case based on “sudden termination» is the service provider, such as distributor, agent, etc. (see ECJ Corman Collins case, 19 12 13, C-9/12, and article 7.1.b.2 of Brussels I recast°).

          (b) Who is the Judge of the “sudden termination” of a “non- tacit contractual relationship”?

          – We believe that French courts may continue to give effect to a jurisdiction clause in tort case, especially when it expressly encompasses tort litigation (Court of cassation, 1° Ch. Civ., January 18, 2017, n° 15-26105, Riviera Motors / Aston Martin Lagonda Ltd).

          – In case of lack of choice of court clause, French courts will have jurisdiction over a “sudden termination” claim as the judge of the place where the harmful event occurred (art. 7.3 of Brussels I recast), which is the place where the sudden termination has effect…i.e. in France if the French company is the victim.

          “Sudden Termination” claim and Non-EU co-contractor

          The Granarolo solution will not ipso facto apply if a French victim brings a claim to French courts, based on a “sudden termination” made by a non-EU company. In non-EU relations, French judges could continue to retain only the tort qualification. In such a case, French courts may keep their jurisdiction based on the place where the harmful event occurs.

          Jurisdiction clause to a foreign court may be recognized in France (even for tort-based claims), provided that this jurisdiction clause is valid according to either a bilateral international convention or to the Hague Convention of 30 June 2005 on choice of court agreements. Otherwise, according to Egalim III law, imperative jurisdiction might be attributable to French courts.

          “Sudden Termination” claim and arbitration

          Stipulating an ad hoc or institutional arbitration clause is probably the safest solution to avoid the jurisdiction of French courts. Ideally, the clause will fix the seat of the arbitral tribunal outside France. According to the principle of competence-competence of the arbitrators, French courts declare themselves incompetent, unless the arbitration clause is manifestly void or manifestly inapplicable, regardless of contract or tort ground (see, in particular, Paris Court of Appeal, 5 September 2019, n°17/03703). The so-called “Egalim III” law has no impact on arbitration clauses.

          Conclusion: Foreign companies should not leave open the Jurisdiction and governing Law issues. They must negotiate a safe harbour, otherwise a French victim of a termination will likely to be entitled to bring a “sudden termination” claim in front of French judges (see what happen below in Part 2)

          How to master the “Sudden Termination” French rules?

          When French law is applicable, the foreign company will face the legal regime of article L442 -1.II of the French Commercial Code sanctioning “sudden termination”. As a preliminary remark, it is important to know, above all, that the implementation of the liability for “sudden termination” is the consequence of the lack of a notice or a too short notice. Thus, this scheme does not lay down an automatic compensation rule. In other words, as soon as reasonable notice is given by the author of the termination, liability on that basis can be dismissed.

          The prerequisite for “Sudden Termination”: an established commercial relationship

          All contracts are covered by this legal regime, except for contracts whose regulations provide for a specific notice of termination, like commercial agency contracts and transport of goods by road subcontracts.

          First, there must be a relationship that can be proven by a written contract or de facto, by behaviour of the parties. Article L.442-1 II of the French Commercial Code covers all “commercial” relationships and not only “contractual ones so that such relationship may be based on a succession of tacitly renewed contracts or a regular flow of business, materialized by multiple orders. This was recently recalled by the Supreme Court (Supreme Court, February 16, 2022, n° 20-18.844)

          Second, this relationship must have an established character. There is no legal definition, but this notion has been defined year after year by case law which has established an objective criterion and a more subjective one.

          (a) The objective criterion implies a sufficiently long, regular and significant relationship between the two parties. The duration of the relationship is the most important criterion. The relationship must also be regular, that is, it must not have been interrupted (too often or too long). The relationship must ultimately be meaningful and represent a serious flow of business between the parties, in volume or value.

          (b) The subjective test focuses primarily on the legitimate belief of the victim of the rupture in the continuation of the contract / the relationship that is based on factual elements, such as investment requests, budgets over several years, etc. Conversely, it is on the basis of the finding of a lack of legitimate belief in a common future that the terminating party can prove the absence of a stable character when he has resorted, on several occasions, a call for tenders (unless it is a trick).

          Anticipating a “Sudden Termination” claim

          (a) The termination may be total or partial

          The total rupture is materialized by a complete stop of the relations, for example ending the contract, stopping the sending of orders by the purchaser or the recording of orders by the supplier.

          The Supreme Court recently recalled that a significant drop in sales with a partner must be considered as a partial rupture of the relationship (February 16, 2022, n° 20-18.844, cited above). But the most complicated situation to deal with is the so-called partial rupture that will be deduced from a modification of elements that partly impacts the relationship but does not reduce it to nothing (ex.: a price increase or decrease, a change in the terms of payment or delivery).

          (b) The termination must be subject to a reasonable written prior notice

          The notice must be notified in writing. The absence of written notice is already a breach in itself. The notification must clearly reflect the willingness of a party to sever the relationship in whole or in part, which must be clearly identified. The notification must also clearly identify the date on which the relationship will end.

          Thus, an ambiguity on the notice period (e.g if the termination of an agreement is notified, whilst offering to maintain certain prices and payment terms, in the meantime) is considered as an insufficient termination notice (French Supreme Court, January 29, 2013, n° 11-23.676).

          Parties must distinguish between the letter of formal notice for default and the subsequent notification of the breach, giving notice (if applicable). During the period of notice, parties must fully comply with all contractual conditions.

          This principle also applies to distribution contracts subject to specific French rules imposing annual or multi-year negotiation obligations. In fact, the Court of cassation has ruled that “when the conditions of the commercial relationship established between the parties are subject to annual negotiation, modifications made during the notice period which are not so substantial as to undermine its effectiveness do not constitute a brutal breach of that relationship” (Cass. com., Dec. 7, 2022, n° 19-22.538).

          However, it’s not necessary to mention the reasons why the commercial relationship is terminated is not a fault or breach of the relationship. In fact, French courts consider that “the fact that the given reason to terminate was false does not in any way present the terminating party from terminating the commercial relationship” (Versailles Court of Appeal, June 10, 1999).

          The duration of the prior notice to be respected is not defined by French law which did not pose precise rule until the reform 2019. If several criteria are stated by case law, it should be noted that the most important criterion is the duration of the relationship. Judges also take into account the share of turnover achieved by the victim, the existence or not of a territorial exclusivity, the nature of the products and the sector of activity, the importance of the investments made by the victim especially to the relationship in question, and finally the state of economic dependence. Economic dependence is defined as the impossibility for a company to have a solution that is technically and economically equivalent to the contractual relations it has established with another company. Case law considers this to be an aggravating factor justifying a longer termination notice.

          The minimum notice period must be notified at the time of notification of termination. As a consequence, events that affect the victim after the notification, both positively (conclusion of a new contract) and negatively (loss of another custome), will not be taken into account by the judge, at the time of ruling, when assessing the “brutality” of the termination.

          The length of the notice given by the judges is very variable. The appreciation of notice is made on a case-by-case basis. It is very difficult to give a golden rule, even though roughly for each year of relationship, a month’s notice might be due (to modulate up or down depending on the other criteria in the relationship). But way of illustration, however, the following case law may be cited:

          • Paris Court of Appeal , Feb.9, 2022: 16-year relationship with 15 months’ notice;
          • Paris Court of Appeal, Jan.20, 2022: 12-year relationship with 8 months’ notice;
          • Paris Court of Appeal, Oct. 25, 2022: 16-year relationship with 18 months’ notice;
          • Paris Court of Appeal , Feb. 23, 2022: 17-year relationship with 11 months’ notice;
          • Paris Court of Appeal, Sept. 21, 2022: 5-year relationship with 14 months’ notice.

          Since the Order of April 24, 2019, which limits the length of reasonable notice to a maximum of 18 months, if the notice period granted by a party is 18 months, it cannot be held liable for a sudden termination. However, much of the litigation remains uncertain, as only exceptionally long or particularly sensitive relationships led, prior to 019, to the award of more than 18 months’ notice. Ordinance of April 24, 2019, limits to 18 months the maximum period of notice reasonably due under Article L 442-1.II. But much of the litigation will remain uncertain since only relations of exceptional longevity or particularly sensitive, could have led to the allocation of a notice higher than 18 months.

          Judges are not bound by the contractual notices stipulated in the contract. But if the author of the breach also violated the terms and conditions of termination provided for by contract, the victim may seek the responsibility of the author both on the tort basis of the sudden rupture and also on the basis of the breach of a contractual obligation.

          Cases in which “Sudden Termination” is ruled out

          The legal regime provides for two cases, and the case-law seems to have imposed others.

          (a) The two legal exceptions are Force majeure (very rarely consecrated by the courts) and the fault of the victim of the termination, case-law having added that it must be a serious violation (“faute grave”) of a contractual commitment or a legal provision (such as non-respect of an exclusivity, a non-compete, a confidentiality or a change of control duty, or non-payment of amounts due contractually).

          The judges consider themselves, of course, not bound by a termination clause defining what constitutes serious misconduct. In any case the party who terminates for serious misconduct must clearly notify it in its letter of termination. Above all, serious misconduct leads to a lack of notice, therefore, if the terminating party alleges serious misconduct but grants notice, whichever it may be, judges may conclude that the fault was not serious enough.

          Thus, the seriousness of the misconduct must be motivated by judges in their rulings. Noting that the contract was breached after two formal notices is not sufficient (Cass. com., Feb 16. 2022, n° 20-18.844).

          However, the Court of Cassation considers that “even in the case of serious misconduct justifying the immediate termination of the commercial relationship, the other party remains free to give the other party a notice” (Cass. Com., Oct. 14 2020, n°18-22.119).

          (b) In recent years, case-law has added other cases of liability waiver. This is the case when the rupture is the consequence of a cause external to the author of the rupture, such as the economic crisis, the loss of its own customers or suppliers, upstream or downstream.

          For example, in 2021 the Court of cassation has ruled that “the business partner is not entitled to an unchanged relationship and cannot refuse any adaptation required by economic changes” (Com, Dec 01, 2021, n°20-19.113). In fact, to be attributable to an economic player, a termination must be free and deliberate. This is not the case if termination is imposed by the economic situation.

          However, adding a liability exemption clause in a contract, aimed at waiving destinated to escape the penalties of article L. 442-1, is without consequences on the judge’s appreciation.

          Judges have also excluded “sudden termination” in the hypothesis of the end of the first period of a fixed-term contract, whatever its duration is: the first renewal of a contract, constitutes a foreseeable event for the victim of the rupture, which excludes the very notion of brutality; but once the contract has been renewed at least once, judges can subsequently characterize the victim’s legitimate belief in a new tacit renewal.

          Compensation for “Sudden Termination”

          Judges only compensate for the detrimental consequences of the brutality itself of the breach but do not compensate, at least in the context of article L442 -1.II, for the consequences of the breach itself.

          The basic rule is very simple: it is necessary to determine the length of the notice which should have been granted, from which the notice actually granted is deducted. This net notice is multiplied by the average monthly gross margin of the victim, or more often the so called margin on variable costs (i.e. the turnover minus costs disappearing with non-performance of the contract/relation). Defendant should not hesitate to ask for the full accountancy evidences, especially to identify (lower) margin rates, or even for a judicial expertise on those accounting elements. In general, the base of the average monthly margin consists of the last 24 or 36 months.

          The compensation calculated on the average margin is, in general, exclusive of any other compensation. However, the victim can prove that it has suffered other losses as a consequence of the brutality of the rupture. Such as dismissals directly caused by this brutality or the depreciation of investments made recently by the victim.

          Some practical tips when considering to anticipate “Sudden Termination”

          Even though the legal regime is still ambiguous and the case-law terribly casuistic which prevents to release strong guidelines, here are some practical tips when a company plans to terminate a relationship / contract:

          • in the case of a fixed-term contract renewable tacitly, the notification of non-renewal must be anticipated well in advance of the beginning of the contractual notice in order to avoid being in a situation where it is necessary to choose between not renewing the contract with a notice that is not sufficient or agree to see the contract renewed itself for a new term;
          • commercial teams must be made aware of the risk of partial sudden termination when they change the conditions of execution of a commercial relationship / contract too radically;
          • in some cases, it may be useful to send a pre-notice of termination with a “notice proposal” in order to try to validate this notice with the other party;
          • it may also be useful, in certain relationships, to notify the end of the relationship with different lengths of notice depending on the nature of the product lines;
          • Finally, the best way is to conclude an end-of-relation protocol, fixing the duration of the notice as well as, if necessary, the progressive decline of the orders, the whole within the framework of a settlement agreement which definitively waives any claim, including “sudden termination”.

          Sudden termination regime shall be taken into consideration when entering into the final phase of a duration relationship: the way in which the contract (or de facto relationship) is terminated must be carefully planned, in order to manage the risk of causing damages to the counterparty and being sued for compensation.

          Given the significance of the influencer market (over €21 billion in 2023), which now encompasses all sectors, and with a view for transparency and consumer protection, France, with the law of June 9, 2023, proposed the world’s first regulation governing the activities of influencers, with the objective of defining and regulating influencer activities on social media platforms.

          However, influencers are subject to multiple obligations stemming from various sources, necessitating the utmost vigilance, both in drafting influence agreements (between influencers and agencies or between influencers and advertisers) and in the behaviour they must adopt on social media or online platforms. This vigilance is particularly heightened as existing regulations do not cover the core of influencers’ activities, especially their status and remuneration, which remain subject to legal ambiguity, posing risks to advertisers as regulatory authorities’ scrutiny intensifies.

           

          Key points to remember 

          • Influencers’ activity is subject to numerous regulations, including the law of June 9, 2023.
          • This law not only regulates the drafting of influence contracts but also the influencer’s behaviour to ensure greater transparency for consumers.
          • Every influencer whose audience includes French users is affected by the provisions of the law of June 9, 2023, even if they are not physically present in French territory.
          • Both the law of June 9, 2023, and the “Digital Services Act,” as well as the proposed law on “fast fashion,” foresee increasing accountability for various actors in the commercial influence sector, particularly influencers and online platforms.
          • Despite a plethora of regulations, the status and remuneration of influencers remain unaddressed issues that require special attention from advertisers engaging with influencers.

           

          The law of June 9, 2023, regulating influencer activity  

          The definition of influencer professions

          The law of June 9, 2023, provides two essential definitions for influencer activities:

          • Influencers are defined as ‘natural or legal persons who, for consideration, mobilize their notoriety with their audience to communicate to the public, electronically, content aimed at promoting, directly or indirectly, goods, services, or any cause, engaging in commercial influence activities electronically.’
          • The activity of an influencer agent is defined as ‘that which consists of representing, for consideration,’ the influencer or a possible agent ‘with the aim of promoting, for consideration, goods, services, or any cause‘ (article 7) The influencer agent must take ‘necessary measures to ensure the defense of the interests of the persons they represent, to avoid situations of conflict of interest, and to ensure the compliance of their activity‘ with the law of June 9, 2023.

           

          The obligations imposed on commercial messages created by the influencer

          The law sets forth obligations that influencers must adhere to regarding their publications: 

          • Mandatory particulars: When creating content, this law imposes an obligation on influencers to provide information to consumers, aiming for transparency towards their audience. Thus, influencers are required to clearly, legibly, and identifiably indicate on the influencer’s image or video, regardless of its format and throughout the entire viewing duration (according to modalities to be defined by decree):

            – The mention “advertisement” or “commercial collaboration.” Violating this obligation constitutes deceptive commercial practice punishable by two years’ imprisonment and a fine of €300,000 (Article 5 of the law of June 9, 2023).
            – The mention of “altered images” (modification by image processing methods aimed at refining or thickening the silhouette or modifying the appearance of the face) or “virtual images” (images created by artificial intelligence). Failure to do so may result in a one-year prison sentence and a fine of €4,500 (Article 5 of the law of June 9, 2023).

          • Prohibited or regulated promotions: This law reminds certain prohibitions, subject to criminal and administrative sanctions, stemming from French law on the direct or indirect promotion of certain categories of products and services, under penalty of criminal or administrative sanctions. This includes the promotion of products and services related to:

            – health: surgery, aesthetic medicine, therapeutic prescriptions, and nicotine products;
            – non-domestic animals, unless it concerns an establishment authorized to hold them;
            – financial: contracts, financial products, and services;
            – sports-related: subscriptions to sports advice or predictions;
            – crypto assets: if not from registered actors or have not received approval from the AMF;
            – gambling: their promotion prohibited for those under 18 years old and regulated by law;
            – professional training: their promotion is not prohibited but regulated.

           

          The accountability of influencer behaviour

          The law also holds influencers accountable from the contracting of their relationships and when they act as sellers:

          • Regulation of commercial influence agreements: This law imposes, subject to nullity, from a certain threshold of influencer remuneration (defined by decree), the formalization in writing of the agreement between the advertiser and the influencer, but also, if applicable, between the influencer’s agent, and the mandatory stipulation of certain clauses (remuneration, mission description, etc.).
          • Influencer responsibility as a cyber seller: Influencers engaging in drop shipping (selling products without handling their delivery, done by the supplier) must provide the buyer with all information in French as required by Article L. 221-5 of the Consumer Code about the product, such as its availability and legality (i.e., guarantee that the product is not counterfeit), applicable product warranty, and supplier identity. Additionally, influencers must ensure the proper delivery and receipt of products and, in case of default, compensate the buyer. Influencers are also logically subject to obligations regarding deceptive commercial practices (for more information, the DGCCRF website explain the dropshipping).

           

          The accountability of other actors in the commercial influence ecosystem

           

          Joint and several liability is set by law, for the advertiser, influencer, or influencer’s agent for damages caused to third parties in the execution of the commercial influence contract, allowing the victim of the damage to act against the most solvent party.

          Furthermore, the law introduces accountability for online platforms by partially incorporating the European Regulation 2022/2065 on digital services (known as the “DSA“) of October 19, 2022.

           

          French regulation and international influencers

           

          Influencers established outside the European Union (including also Switzerland and the EEA) who promote products or services to a French audience must obtain professional liability insurance from an insurer established within the EU. They must also designate a legal or natural person providing “a form of representation” (SIC) within the EU. This representative (whose regime is not very clear) is remunerated to represent the influencer before administrative and judicial authorities and to ensure the compliance of the influencer’s activity with law of June 9, 2023.

          Furthermore, according to law of June 9, 2023, when the contract binding the influencer (or their agency) aims to implement a commercial influence activity electronically “targeting in particular an audience established in French territory” (SIC), this contract should be exclusively subject to French law (including the Consumer Code, the Intellectual Property Code, and the law of June 9, 2023). According to this law, the absence of such a stipulation would be sanctioned by the nullity of the contract. Law of June 9, 2023, seems to be established as an overriding mandatory law capable of setting aside the choice of a foreign law.

          However, the legitimacy (what about compliance with the definition of overriding mandatory rules established by Regulation Rome I?) and effectiveness (what if the contract specifies a foreign law and a foreign jurisdiction?) of such a legal provision can be questioned, notably due to its vague and general wording. In fact, it should be the activity deployed by the “foreign” influencer to their community in France that should be apprehended by French overriding mandatory rules, rather than the content of the agreement concluded with the advertiser (which itself could also be foreign, by the way).

           

          The other regulations governing the activity of influencers

           

          The European regulations

          The DSA further holds influencers accountable because, in addition to the reporting mechanism imposed on platforms to report illicit content (thus identifying a failing influencer), platforms must ensure (and will therefore shift this responsibility to the influencer) the identification of commercial communications and specific transparency obligations towards consumers.

          The «soft law»

          As early as 2015, the Advertising Regulatory Authority (“ARPP”) issued recommendations on best practices for digital advertising. Similarly, in March 2023, the French Ministry of Economy published a “code of conduct” for influencers and content creators. In 2023, the European Commission launched a legal information platform for influencers. Although non-binding, these rules, in addition to existing regulations, serve as guidelines for both influencers and content creators, as well as for judicial and administrative authorities.

           

          The special status of child influencers

          The law of October 19, 2020, aimed at regulating the commercial exploitation of children’s images on online platforms, notably opens up the possibility for child influencers to be recognized as salaried workers. However, this law only targeted video-sharing platforms. Article 2 of the law of June 9, 2023, extended the provisions regarding child influencer labor introduced by the 2020 law to all online platforms. Finally, a recent law aimed at ensuring respect for the image rights of children was published on February 19, 2024, introducing a principle of joint and several responsibility of both parents in protecting the minor’s image rights.

           

          The status and remuneration of influencers: uncertainty persists

           

          Despite the diversity of regulations applicable to influencers, none address their status and remuneration.

          The status of the influencer

          In the absence of regulations governing the status of influencers, a legal ambiguity persists regarding whether the influencer should be considered an independent contractor, an employee (as is partly the case for models or artists), or even as a brand representative (i.e. commercial agent), depending on the missions contractually entrusted to the influencer.

          The nature of the contract and the applicable social security regime stem from the missions assigned to the influencer:

          • In the case of an employment contract, the influencer will fall under the general regime for employees and assimilated persons, based on Articles L. 311-2 or 311-3 of the French Social Security Code.
          • In the case of a service contract, the influencer will fall under the regime for self-employed workers.

           

          The existence of a relationship of subordination between the advertiser and the influencer typically determines the qualification of an employment contract. Subordination is generally characterized when the employer gives orders and directives, has the power to control and sanction, and the influencer follows these directives. However, some activities are subject to a presumption of an employment contract; this is the case (at least in part) for artist contracts under Article L. 7121-3 of the French Labor Code and model contracts under Article L. 7123-2 of the French Labor Code.

           

          The remuneration of the influencer

          The influencer can be remunerated in cash (fixed or proportional) and/or in kind (for example: receiving a product from the brand, invitations to private or public events, coverage of travel expenses, etc.). The influencer’s remuneration must be specified in the influencer agreement and is directly impacted by the influencer’s status, as certain obligations (minimum wage, payment of social security contributions, etc.) apply in the case of an employment contract.

          Furthermore, the remuneration (for the influencer’s services) must be distinguished from that of the transfer of their copyrights or image rights, which are subject to separate remuneration in exchange for the IP rights transferred.

           

          The influencers… in the spotlight

          The law of June 9, 2023, grants the French authority (i.e. the Consumer Affairs, Competition and Fraud Prevention Agency, “DGCCRF”) new injunction powers (with reinforced penalties). This comes in addition to the recent creation of a “commercial influence squad“, within the DGCCRF, tasked with monitoring social networks, and responding to reports received through Signal Conso. The law provides for fines and the possibility of blocking content.

          As early as August 2023, the DGCCRF issued warnings to several influencers to comply with the new regulations on commercial influence and imposed on them the obligation to publicly disclose their conviction for non-compliance with the new provisions regarding transparency to consumers on their own social networks, a heavy penalty for actors whose activity relies on their popularity (DGCCRF investigation on the commercial practices of influencers).

          On February 14, 2024, the European Commission and the national consumer protection authorities of 22 EU member states, Norway, and Iceland published the results of an analysis conducted on 570 influencers (the so-called “clean-up operation” of 2023 on influencers): only one in five influencers consistently presented their commercial content as advertising. 

          In response to environmental, ethical, and quality concerns related to “fast fashion,” a draft law aiming to ban advertising for fast fashion brands, including advertising done by influencers (Proposal for a law aiming to reduce the environmental impact of the textile industry), was adopted by the National Assembly on first reading on March 14, 2024.

          Lastly, the law of June 9, 2023, has been criticized by the European Commission, which considers that the law would contravene certain principles provided by EU law, notably the principle of “country of origin,” according to which the company providing a service in other EU countries is exclusively subject to the law of its country of establishment (principle initially provided for by the E-commerce Directive of June 8, 2000, and included in the DSA). Some of its provisions, particularly those concerning the application of French law to foreign influencers, could therefore be subject to forthcoming – and welcome – modifications.

          Summary

          To avoid disputes with important suppliers, it is advisable to plan purchases over the medium and long term and not operate solely on the basis of orders and order confirmations. Planning makes it possible to agree on the duration of the ‘supply agreement, minimum volumes of products to be delivered and delivery schedules, prices, and the conditions under which prices can be varied over time.
          The use of a framework purchase agreement can help avoid future uncertainties and allows various options to be used to manage commodity price fluctuations depending on the type of products , such as automatic price indexing or agreement to renegotiate in the event of commodity fluctuations beyond a certain set tolerance period.

          I read in a press release: “These days, the glass industry is sending wine companies new unilateral contract amendments with price changes of 20%…”

          What can one do to avoid the imposition of price increases by suppliers? 

          • Know your rights and act in an informed manner
          • Plan and organise your supply chain

          Does my supplier have the right to increase prices?

          If contracts have already been concluded, e.g., orders have already been confirmed by the supplier, the answer is often no.

          It is not legitimate to request a price change. It is much less legitimate to communicate it unilaterally, with the threat of cancelling the order or not delivering the goods if the request is not granted.

          What if he tells me it is force majeure?

          That’s wrong: increased costs are not a force majeure but rather an unforeseen excessive onerousness, which hardly happens.

          What if the supplier canceled the order, unilaterally increased the price, or did not deliver the goods?

          He would be in breach of contract and liable to pay damages for violating his contractual obligations.

          How can one avoid a tug-of-war with suppliers?

          The tools are there. You have to know them and use them.

          It is necessary to plan purchases in the medium term, agreeing with suppliers on a schedule in which are set out:

          • the quantities of products to be ordered
          • the delivery terms
          • the durationof the agreement
          • the pricesof the products or raw materials
          • the conditions under which prices can be varied

          There is a very effective instrument to do so: a framework purchase agreement.

          Using a framework purchase agreement, the parties negotiate the above elements, which will be valid for the agreed period.

          Once the agreement is concluded, product orders will follow, governed by the framework agreement, without the need to renegotiate the content of individual deliveries each time.

          For an in-depth discussion of this contract, see this article.

          • “Yes, but my suppliers will never sign it!”

          Why not? Ask them to explain the reason.

          This type of agreement is in the interest of both parties. It allows planning future orders and grants certainty as to whether, when, and how much the parties can change the price.

          In contrast, acting without written agreements forces the parties to operate in an environment of uncertainty. Suppliers can request price increases from one day to the next and refuse supply if the changes are not accepted.

          How are price changes for future supplies regulated?

          Depending on the type of products or services and the raw materials or energy relevant in determining the final price, there are several possibilities.

          • The first option is to index the price automatically. E.g., if the cost of a barrel of Brent oil increases/decreases by 10%, the party concerned is entitled to request a corresponding adjustment of the product’s price in all orders placed as of the following week.
          • An alternative is to provide for a price renegotiation in the event of a fluctuation of the reference commodity. E.g., suppose the LME Aluminium index of the London Stock Exchange increases above a certain threshold. In that case, the interested party may request a price renegotiationfor orders in the period following the increase.

          What if the parties do not agree on new prices?

          It is possible to terminate the contract or refer the price determination to a third party, who would act as arbitrator and set the new prices for future orders.

          Christophe Hery

          Áreas de prática

          • Agência
          • Antitrust
          • Arbitragem
          • Distribuição
          • Comércio eletrónico
          Contato Christophe

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            How to contract with Influencers in France

            11 de Abril, 2024

            • França
            • Contratos

            How real estate tokenisation works, what is the regulatory framework, and what rights investors actually acquire?

            Real estate tokenisation, already present in Spain for several years, is no longer a futuristic promise but a tangible reality in the Spanish market. It represents more than just a technological innovation: it signifies a profound transformation in how we understand ownership, investment, and liquidity within the real estate sector — one of the most traditional and tightly regulated areas of our economy.

            What is real estate tokenisation and how does it work?

            In essence, to tokenise a property today means converting the economic rights associated with that asset into digital units that can circulate on blockchain-based platforms. Each token represents a fraction of those economic rights, allowing investors with more modest capital to access a market that has traditionally required substantial investments.

            The role of smart contracts

            Tokens operate through smart contracts that automatically execute the distribution of rental income or resale proceeds of that partial representation of the property, including any potential difference in value, eliminating intermediaries and providing transparency to the process. This automation is not merely cosmetic: it reduces operational costs, speeds up transactions, and potentially increases the liquidity of assets that have historically been among the least liquid in the market.

            The legal reality: what is actually tokenised in Spain

            It is essential to clarify from the outset a key point often blurred by marketing discourse: in practice, real estate tokenisation projects in Spain do not tokenise the property itself but rather the economic rights linked to a corporate vehicle (usually a special purpose vehicle, or SPV) that owns the property. Spanish law only allows the tokenisation of shares in joint-stock companies (sociedades anónimas) using distributed ledger technology; shares in limited liability companies (sociedades limitadas) cannot be tokenised. This means that if the SPV is a limited liability company, its shares cannot be directly tokenised — only other instruments such as participative loans or credit rights over income streams can be represented as tokens. Only if the SPV is incorporated as a joint-stock company is it legally possible to tokenise its shares.

            What rights does a real estate token investor actually acquire?

            An investor who acquires a token does not become a direct co-owner of the property. Depending on the structure chosen, they may become a shareholder in a tokenised joint-stock company that owns the property or a holder of economic rights derived from participative loans or other indirect forms of economic participation issued by the SPV that owns the asset. The distinction is crucial: if the company faces solvency issues or bankruptcy, the value of the token collapses with it, and the investor cannot exercise any direct real rights over the property.

            Spanish law, rooted in centuries of land registry tradition, does not currently allow the transfer of real property rights through the mere transfer of tokens; a public deed and registration are required for the transfer to be effective against third parties. The SPV structure is therefore a compromise between technological possibilities and the demands of the current legal framework.

            Regulatory framework for real estate tokenisation in Spain

            CNMV authorisation and the 2023 Securities Market Law

            The Spanish regulator has begun to establish a legal foundation for this technology to develop within a secure framework. In 2023, the Spanish National Securities Market Commission (CNMV) authorised Adventurees Capital PFP as the first crowdfunding platform to issue tokenised securities — a milestone in the convergence of crowdfunding and blockchain. This authorisation was accompanied by the approval of Law 6/2023 on the Securities Market, which expressly recognises the representation of transferable securities through distributed ledger technologies such as blockchain, granting them full legal validity.

            The role of the Land Registry in the blockchain era

            In parallel, the Spanish Association of Land Registrars is exploring how to integrate blockchain technology into the registry system, although it is important to clarify the real scope of these initiatives. Current projects focus mainly on complementary applications such as digital management of the Building Book or improved traceability and accessibility of registry information. They do not aim to replace the fundamental pillars of the system: execution of public deeds before a notary and registration of ownership, which remain absolutely mandatory for the transfer of real rights over property. Registrars are firm in their institutional stance: blockchain can complement and streamline document management, but it cannot replace the legal control exercised by the registrar or the protection of third parties offered by the Land Registry — both essential components of the Spanish legal system. This position reflects the current limitation of the model: tokens circulate on the blockchain representing positions in SPVs or economic rights over them, but the actual ownership of the property remains anchored in the traditional registry system, held by the corporate vehicle, and any transfer of that ownership must still follow the conventional legal process with all its guarantees.

            European regulation: ECSPR, MiCA and the DLT Pilot Regime

            Spain also benefits from a European regulatory framework that is positioning the EU as a global leader in digital asset regulation. The European Crowdfunding Service Providers Regulation (ECSPR) harmonises the rules for crowdfunding platforms, allowing an authorised platform in one Member State to operate across the EU through the so-called “European passport”. The MiCA Regulation, which came fully into force on 30 December 2024, broadly regulates crypto-asset markets, setting obligations for both issuers and service providers. The DLT Pilot Regime (EU Regulation 2022/858) allows market infrastructures based on distributed ledger technology to operate under certain temporary exemptions, creating a controlled testing environment to assess the potential of these technologies in financial markets.

            The Spanish regulator’s approach could be described as cautiously supportive: innovation is encouraged, but strict compliance with anti-money laundering, customer identification, and disclosure obligations is required to protect investors. This is not technological laissez-faire, but rather an effort to integrate innovation within a solid framework of legal guarantees.

            Legal challenges and risks of real estate tokenisation

            The risks of the SPV structure

            The legal challenges that remain are significant and deserve attention. The SPV structure, while legally viable, introduces an additional layer of complexity and risk that must be clearly communicated to investors. Unlike direct ownership — where the investor holds real rights over the property enforceable against third parties — in the current tokenised model, investors hold positions in indirect forms of economic participation (shares, participative loans, credit rights) linked to the company that owns the property. This has important implications for corporate liability, taxation, and insolvency protection.

            The disconnect between the on-chain and off-chain worlds

            It is also essential to understand that the connection between the “on-chain” world (where tokens circulate) and the “off-chain” world (where property rights are recorded) is neither direct nor automatic. Transferring a token does not in itself alter the Land Registry: ownership of the property remains with the SPV regardless of who holds the tokens, and only a duly notarised and registered deed can change that ownership. The exploratory projects of the Land Registrars aim to improve efficiency in information management but do not alter this fundamental principle. As in any emerging market, it is essential to prevent fraudulent schemes that promise unrealistic returns or market tokens without proper legal backing.

            Practical implications for investors and legal practitioners

            For legal practitioners, real estate tokenisation may require adapting contracts, corporate bylaws, and financing structures to an environment where rights circulate digitally and in a decentralised manner. For investors, it offers an opportunity to diversify portfolios with smaller capital contributions and greater liquidity potential than traditional real estate investment, provided they understand that they are not acquiring direct ownership of the property but rather a financial position linked to the corporate structure that owns it. And for the wider economy, it could invigorate a real estate market worth trillions of euros by facilitating the entry of retail capital previously excluded from such investments.

            The future of real estate tokenisation in Spain

            This is an evolution that combines law, technology, and finance in an inseparable way. It is essential to understand that tokenisation is not a passing trend but a tool that, when properly used and regulated, can transform access to one of society’s most valuable assets — property. However, this transformation currently operates through intermediate corporate structures and indirect forms of economic participation, not through direct ownership as commercial language sometimes suggests. It certainly does not imply an immediate revolution of Spain’s land registration system, whose fundamental guarantees remain intact.

            It is quite common for business relationships with agents or distributors to last for years without any signed documents. And be careful, because we know that a contract can exist even verbally.

            The absence of a written contract will add difficulties in the event of a possible claim, so what you do between the decision to terminate, and the moment of the claim is very important. Remember: ‘anything you write will be used against you’.

            The decision to terminate a business relationship is a very delicate moment to which, for some reason, solicitors are not invited. Here are some examples (all real) in which companies or employees with the best of intentions wrote to the agent/distributor. All of them were subsequently very damaging to the company:

            Saying ‘We are terminating our business relationship’ when the strategy will be to argue that no such business relationship exists, but rather that there are separate and linked contracts (e.g., supply rather than ongoing distribution contract; very significant compensation consequences).

            ‘You no longer represent our company’, which may be evidence that you did so before.

            ‘As of day X, you may no longer act on behalf of our company,’ which would prove that you were previously able to act on its behalf.

            ‘You may not attend the X trade fair on our behalf.’ A way of confirming that the agent/distributor’s responsibilities included participating in trade fairs and probably accrediting the customers obtained.

            ‘The sales you promoted have been significantly reduced in year N.’ When there is no written contract or other form of documentation, imputing a breach of an obligation that is not clear can be counterproductive.

            Saying ‘You are not actively promoting our products’ and then adding: ‘We urge you to stop promoting the sale of our products’.

            ‘You are no longer our exclusive representative’, which proves a type of relationship (representation/agent) and a tacit or express agreement (‘exclusivity’).

            ‘We have appointed another representative in your area’, which shows that the agent/distributor had an assigned area and was “representing”.

            ‘From this moment on, orders will be handled by X’, which also confirms a type of relationship.

             

            In summary: from the moment the company considers terminating a commercial relationship, especially when it is not in writing and before sending any letter, it is advisable to think carefully about the strategy in case of a possible claim. This is the best time to seek advice and avoid surprises. Any communication that is not in line with this strategy designed from the outset can only lead to confusion and problems.

            Since the General Data Protection Regulation (GDPR) took effect in 2018, the European Union (EU) has granted adequacy status to only a limited number of jurisdictions — those whose data protection regimes are deemed to provide an “essentially equivalent” level of protection to that of the EU. The current list includes Andorra, Argentina, Canada (under PIPEDA), Faroe Islands, Guernsey, Isle of Man, Israel, Japan, Jersey, New Zealand, South Korea, Switzerland, Uruguay, the United Kingdom, and the United States (limited to companies certified under the Data Privacy Framework).

            As of 5 September 2025, Brazil is on the verge of joining this exclusive group. The European Commission has issued a draft adequacy decision concluding that the Brazilian General Data Protection Law (Lei Geral de Proteção de Dados Pessoais – LGPD), in conjunction with Brazil’s broader legal and constitutional framework, offers protections that are essentially equivalent to those found in the GDPR. While Brazil’s rules offer somewhat more flexibility in specific areas of data processing, the foundational principles and safeguards are well-aligned with EU standards.

            Once finalized, the adequacy decision will authorize the free flow of personal data from the EU to Brazil without the need for additional contractual clauses or technical safeguards. Such a development is not just regulatory — it also answers a core political argument made by LGPD advocates since its inception: that the absence of a comprehensive data protection framework was undermining Brazil’s international competitiveness by limiting data flows and discouraging investment. For businesses, the EU decision may finally mean the removal of a significant layer of compliance complexity — a development especially welcome by small and medium-sized enterprises engaged in cross-border trade or service provision. The draft is currently under review by the European Data Protection Board (EDPB) and the Member States of the EU.

            The Commission’s assessment highlights several key aspects of Brazil’s data protection landscape. It begins by noting that the Brazilian Constitution expressly guarantees the right to privacy and the protection of personal data — a notable distinction among non-EU jurisdictions. These protections are further supported by Brazil’s ratification of the American Convention on Human Rights and its recognition of the jurisdiction of the Inter-American Court of Human Rights, reinforcing a commitment to fundamental rights and democratic oversight.

            The LGPD mirrors the GDPR in many critical respects and defines its territorial scope clearly. It applies to: (i) data processing carried out within Brazilian territory, (ii) the offering of goods or services to individuals in Brazil, and (iii) data collected in Brazil, even if subsequently processed abroad. This aligns well with the extraterritorial provisions of the GDPR. The definitions of personal data, sensitive data, controller, and processor are materially similar, as are the key principles governing processing — including lawfulness, purpose limitation, data minimization, accuracy, transparency, and security. The law expressly excludes anonymized data from its scope and establishes specific exemptions for journalistic activities, public security, and scientific research.

            Another strength is Brazil’s institutional framework. The National Data Protection Authority (ANPD) was recently transformed into an autonomous regulatory agency, enhancing its independence and technical capacity. The ANPD holds both regulatory and enforcement powers: it can issue binding regulations, impose administrative sanctions, and publish authoritative guidance. To date, it has issued key guidelines on topics such as consent, legitimate interest, the role of the Data Protection Officer (DPO), and security incident reporting. Internationally, the ANPD is an active participant in global data protection dialogue — it is a member of the Global Privacy Assembly and an official observer to the Council of Europe’s Convention 108.

            The LGPD’s approach to international data transfers is also structurally aligned with the GDPR. It requires appropriate safeguards such as standard contractual clauses, allows for future adequacy decisions under a regime comparable to Article 45 of the GDPR, and includes detailed provisions for onward transfers and transit data — that is, data merely passing through Brazil without further processing. The rights of data subjects are robust and familiar to European practitioners: access, rectification, erasure, portability, and withdrawal of consent are guaranteed. Lawful bases for processing are also aligned — including consent, legal obligations, contract execution, and legitimate interest. Notably, the LGPD requires a documented balancing test when relying on legitimate interest, bringing additional accountability to this flexible legal basis.

            Security incidents involving personal data must be notified to both the ANPD and affected data subjects when there is a significant risk of harm. The standard notification deadline is 72 hours, and the required content aligns closely with Articles 33 and 34 of the GDPR. The ANPD may also order public disclosure of incidents or require remedial measures, depending on the nature and scope of the breach.

            Importantly, this process is not one-sided. In parallel to the European Commission’s adequacy decision, the ANPD is conducting its own adequacy assessment of the EU and EEA data protection frameworks. This process is regulated by the Brazilian Resolution CD/ANPD No. 19/2024, which governs international data transfers. Once the technical and legal evaluation is complete, the ANPD’s Board of Directors will issue a formal decision. This reciprocal move reflects Brazil’s commitment to mutual recognition and regulatory symmetry — a positive signal for companies on both sides of the Atlantic.

            In conclusion: If confirmed, Brazil’s adequacy status will simplify international operations, reduce compliance costs, and expand opportunities for data-driven business and legal cooperation. For European lawyers advising SMEs with interests in Latin America, this development is a strategic signal: Brazil is emerging not just as a growing market, but as a legally compatible and data-safe jurisdiction for international partnerships.

            Remember the USA – EU agreement on 15% tariffs? I wrote that with a negotiator like Trump the game is never over (article here) and—after the recent interlude featuring a threat of 100% tariffs on pharmaceuticals—the U.S. government has announced the imposition of an overall 107% duty on Italian pasta, which could take effect on January 1, 2026.

            Where this new duty comes from

            The antidumping investigation was launched by the U.S. Department of Commerce at the request of certain competing American companies and is based on a 1996 antidumping order that allows for periodic reviews of imports of Italian pasta. The Department of Commerce conducts these checks annually to assess whether Italian producers are selling pasta at prices lower than the U.S. domestic market, a practice known as “dumping.”

            Companies involved in the investigation

            The Department of Commerce selected two sample companies for in-depth analysis, defined as “mandatory respondents”: La Molisana and Pastificio Lucio Garofalo. According to the official document published by the U.S. administration, for the period from July 1, 2023 to June 30, 2024, both companies allegedly sold their products below market prices, resulting in the imposition of a duty of 91.74%.

            U.S. authorities justified this percentage by claiming the two companies did not provide complete or compliant information as requested by the Department and were therefore insufficiently cooperative during the investigation. What is very important is that, in addition to the two companies directly examined, the additional 91.74% duty is also applied to numerous other Italian producers not individually reviewed. This methodology, while formally permitted under U.S. law as an exception, is being applied without any direct verification of the other companies.

            Next steps in the procedure

            Italy’s Ministry of Foreign Affairs moved immediately, formally intervening in the proceeding as an “interested party” through the Italian Embassy in Washington. The Foreign Ministry is working in close coordination with the companies concerned and, in concert with the European Commission, to persuade the U.S. Department to revise the provisional duties.

            The two companies involved (La Molisana and Garofalo) can submit documentation to contest the dumping allegations. However, if dumping is confirmed, the Department of Commerce will instruct Customs to apply antidumping duties on goods sold and entered into U.S. commerce.

            The preliminary nature of this determination means there is still room to change the decision before it becomes final.

            Possible effective date

            The new super-duty of 91.74%, which will be added to the existing 15% tariff for a total of 107%, is scheduled to take effect on January 1, 2026. This date therefore represents a crucial deadline for all ongoing diplomatic and legal actions.

            If confirmed, the economic impact would be significant: in 2024, Italian pasta exports to the United States reached a value of €671 million according to Coldiretti, accounting for nearly 17% of the sector’s total exports. A 107% duty would risk seriously undermining competitiveness in one of the most important markets for Italian agri-food products.

             What to do between now and January 1, 2026?

            At this stage, the entry into force of the new duty depends on the outcome of the ongoing procedure: given what has happened in recent months, and the political use the U.S. administration has made of tariffs—well beyond their technical function—it is reasonable to be pessimistic.

            So, what to do? In recent months we have seen companies react to the uncertainty over the fate of the tariffs in three ways:

            • Some rushed to ship as many products as possible before the potential effective date of the duty;
            • Some granted—upfront—discounts equivalent to the threatened duty, in case it came into force;
            • Some suspended orders, pending definitive news on the impact of the duties.

            These are all  valid options, but other effective tools for managing the uncertainty caused by the flurry of announcements, negotiations, and threats from the U.S. administration should not be forgotten: the risk of new duties being introduced, or existing ones being increased, can be managed in the contract by agreeing with the U.S. importer how any tariff change will affect the product.

            The parties can stipulate, for example, that the increase will be split equally; or that the importer will bear it beyond a certain threshold; or that if the duty exceeds a certain level, the contracts may be terminated. You can find a deeper dive in this article.

            The only certainty is that trade relations with the U.S. will stay unpredictable for a long time, and it’s vital to carefully manage the risk factors involved in selling products there. Right now, the focus is on tariffs and prices, and I encourage you to take this chance to thoroughly review existing agreements and assess whether—and how—other important points are addressed that could entail significant liabilities: we discuss them, very practically, in this book.

            A dedicated notary account in Brazil is a legal mechanism that brings greater security, transparency, and reliability to financial transactions. Regulated under Law 8.935/1994 and Provision No. 197/2025, this service allows notaries to receive, manage, and release funds only after contractual conditions have been fulfilled. By ensuring segregation of assets, traceability, and impartial oversight, dedicated notary accounts provide an effective escrow-like solution for real estate deals, mergers and acquisitions, import/export operations, high-value asset purchases, and complex commercial contracts. This tool not only reduces legal risks and potential disputes but also strengthens trust between parties by guaranteeing that payments are safeguarded until obligations are met.

            The legal basis can be found in Law 8.935/1994, § 1 of art. 7-A, which allows notaries to receive, deposit, and manage amounts related to legal transactions, with transactions subject to objectively verifiable facts/conditions. Provision No. 197, dated June 13, 2025, regulates, at the national level, the service of notarial accounts linked to Notary Public Offices.

            Practical applications: among others, in the following transactions:

            • Real estate: guarantee that the down payment and settlement amounts will be secured in a specific account. This mitigates the risk of misappropriation of funds and ensures that the money will be released only after all contractual conditions have been met.
            • M&A: the linked notarial account creates a standardized escrow mechanism for the payment of price/holdbacks/earn-outs and conditional obligations.
            • Purchase and Sale of High-Value Movable Property: the linked account can be used to guarantee payment. The buyer deposits the amount and the seller knows that the money is safe, being released only after the transfer of ownership and delivery of the goods.
            • Import and Export: the transaction amount can be deposited with the notary and released to the exporter only after confirmation of delivery of the goods in the destination country, for example.
            • Guarantee of Obligations: In any contract that provides for the payment of a sum of money as a guarantee, the notary account can be used to provide greater security to the parties.
            • Supply, EPC/turnkey, and construction contracts: performance retentions, milestone acceptance (commissioning, as-built, issuance of ART/CREA), and payment against formal acceptance.
            • Contractual joint ventures and commercial partnerships: advances conditional on licenses, authorizations, or competitive approval, where applicable.

            Reduction of Legal Risks: The use of linked accounts reduces the chances of litigation related to lack of clarity about the origin and destination of funds. Companies can clearly demonstrate that payments were made and held by an impartial and secure institution.

            Operational structure: limited to banking entities affiliated with the CNB, which must ensure the segregation of assets, traceability through audit trails, and proof of all transactions. The authorization of the delegate requires prior accreditation and electronic registration of the essential details of the transaction and its conditions in the CNB system, with access restricted to the parties and the notary.

            Specific Purpose: amounts received as payment, guarantee, or advance payment as a result of notarial acts must be deposited in a bank account linked to the specific act and may only be moved for the purpose for which they are intended.

            Transparency and Traceability: With the linked notarial account, it is possible to clearly track the financial flow of each transaction, which increases transparency for all parties and for supervisory bodies.

            Verification of conditions and release. Once the objective conditions have been met, the notary authorizes the transfer to the recipients and files the proof of verification. In the event of a dispute between the parties, the notary suspends any movement, draws up a notarial deed, and advises on a consensual or judicial solution, without deciding on the effectiveness/termination of the transaction; if the transaction is frustrated and no solution is found, the procedure is terminated and the amounts are returned to the depositor, in accordance with the agreed clauses.

            Confidentiality and access. In transactions with a confidentiality clause, the notary public maintains confidentiality and does not issue certificates regarding the content of the transaction; documents are accessible only for correctional purposes or by court order.

            Remuneration and costs. The notary’s remuneration for the notarial account service is paid by the financial institution under the terms of the agreement, and the transfer of additional costs to the user is prohibited, without prejudice to fees for any related notarial acts.

            Article 442-1.II of the French Commercial Code (former Article L. 442-6.I.5 °) sanctions the termination by a trader of a written contract or an informal business relationship without giving sufficient written prior notice. Over the last twenty years, this article became the recurring legal basis for all compensation actions (up to 18 months of gross margin, plus other damages) when a commercial relationship or a contract ends (totally or even partially).

            Therefore, a foreign trader who contracts with a French company should try not to fall under the aegis of this rule (part I) and, if it cannot, should understand and control its implementation (part II).

            In a nutshell:

            How can a foreign company avoid or control the risk linked to the “sudden termination of commercial relations” set by French law? Foreign companies doing business with a French counterpart should:

            • enter, as soon as possible, into a written (frame) agreement with their French suppliers or customers, even for a very simple relation and;
            • stipulate a clause in favour of foreign court or arbitration and foreign applicable law while, failing to choose it, they would rather be subject to French courts and laws;

            How can a foreign company master the risk linked to the “sudden termination of commercial relations” set by French law? Foreign companies doing business with a French counterpart should:

            • know that this article applies to almost all type of commercial relationship or contracts, whether written or not, fixed-term or not;
            • check whether its relation/contract is sufficiently long, regular and significant and whether the other party has a legitimate belief in the continuation of this relation/contract;
            • give a written notice of termination or non-renewal (or even of a major modification), which length takes mainly into account the duration of the relation, irrespectively of the length of the contractual notice;
            • invoke, with cautiousness, force majeure and gross negligence of the party, to set aside “sudden termination”;
            • anticipate, in case of insufficient notice, a compensation which amount is the product of the average monthly gross margin per the length of non-granted prior notice.

            How to avoid the application of the French “Sudden Termination” rule?

            In international matters, a foreign company must anticipate whether its relationship will be subject or not to French law before terminating a contract or a business relationship and, in case of dispute, whether it will be brought before a French court or not.

            What will be the law applicable to “Sudden Termination”?

            It is quite difficult for a foreign company to correctly grasp the French legal framework of conflict of laws rules applicable to “sudden termination”. In a ruling of September 19, 2018 (RG 16/05579, DES/ Clarins), the Court of appeal of Paris made, by an implicit reference to the Granarolo EU ruling (07 14 16, N°C196/15) an extension of the contractual qualification to most of the business relationships which will improve foreseeability in order for a foreign company to try to exclude French law and its “sudden termination” rule.

            Sudden termination of a written contract or of a “tacit contractual relationship”

            According to Rome I Regulation (EC No 593/2008, June 17 2008) on the law applicable to contracts:

            – In case of choice of a foreign law by the parties: The clause selecting a foreign applicable law will be valid and respected by French judges (subject to OMR, see below), provided that the choice of law by the parties is express or certain.

            – In case of no choice by the parties: French law will likely to be declared applicable as it might be either the law of the country where is based the distributor/franchisee, etc. or the law of the country where the party who is to provide the service features of the contract has its domicile.

            Sudden termination of a “non-tacit contractual relationship”

            In case of informal relationship (i.e. orders placed from time to time), French judges would retain the tort qualification and will refer to the Rome II Regulation (No 864/2007, July 11 2007) on the law applicable to non-contractual obligations..

            – In case of choice of a foreign law by the parties: a properly drafted choice of foreign law clause should be implemented by a French judge, provided that it expressly includes tort cases.

            – In case of no choice of law by the parties: French law will likely to be declared applicable as it might be the law of the country where the damage occurs (regardless of the place of the causing event or that of the indirect consequences), which is the place of the head office where the French victim suffers the consequences of the termination.

            “Sudden Termination” rule, a French Overriding Mandatory Rule?

            The position of French courts is quite vague and unsatisfactory, and this has been the case for a long time. To make it short: the Commercial Court of Paris judges that “sudden termination” is not an OMR, the Court of appeal of Paris (sole French appellate court in charge of “sudden termination” cases) is also not in favour of the OMR qualification on the grounds that the text “protects purely private economic interests” (CA Paris, pôle 5, ch. 5, Feb 28. 2019, n° 17/16475 / CA Paris, pôle 5, ch. 5, Oct 8. 2020, n°17/19893). Recently, the Paris Court of Appeal reaffirmed that the rules on sudden termination of established commercial relations are not an OMR (Court of appeal Paris, March 11, 2021, n° 18/03112).

            The French Supreme Court has never explicitly addressed the issue (OMR or not OMR). Indeed, the French Supreme Court ruled in the Expedia case (Cass. com., July 8, 2020, n°17-31.536) that the provisions of the former article L. 442-6, I, 2º and II, d), about “significant imbalance” (which is in the same set of rules than “Sudden termination”) are OMR. However, this qualification should be limited to the specific action brought by the Ministry of Finance and not be applicable to an action by a private party. Moreover, some courts may be tempted to invoke the provisions of French law n°2023-221 (March 30, 2023, aka Egalim III) to qualify Sudden termination rule as an OMR, however this text (article L 444-1.A Commercial code) does not quote expressly OMR and set no justification whatsoever to set such a qualification.

            Consequently, if a claim for “sudden termination” is brought to a French court, there is still a  risk that the latter would exclude the applicable foreign law and replace it with the regime resulting from the “sudden termination” of Article L 442-1. II. However, to avoid this risk, a foreign company would better not only choose a foreign governing law but also stipulate that the dispute will be brought before a foreign judge or an arbitral tribunal.

            How to avoid jurisdiction of French court over a “Sudden Termination” claim?

            “Sudden Termination” claim and intra EU co-contractor

            The ECJ ruling (Granarolo, July 14, 2016, N°C196/15) created a distinction between claims occurring from:

            – written framework contract or tacit contractual relationship (existing only if the body of evidences listed by the ECJ are identified by national judges, i.e. length of relation and commitments recognized to each other, such as exclusivity, special price or terms of delivery or payment, non-competition, etc.): such claim has a contractual nature according to conflict of jurisdiction rules under Brussels I recast Regulation;

            – informal relationship which is a non–tacit contractual relationship (i.e. orders placed from time to time): such a request has a tort nature under Brussels I recast ;

            To be noted: the so-called Egalim III law has no impact on the EU rules on jurisdiction clauses.

            (a) Who is the Judge of the “sudden termination” of a written contract or of a “tacit contractual relationship”?

            – Jurisdiction clause for the benefit of a foreign court will be enforced by French courts, even though it is an asymmetrical clause (Court of cassation, October 7, 2015, Ebizcuss.com / Apple Sales International).

            – In case of lack of choice of court clause, French courts are likely to have jurisdiction if the French claimant bringing a case based on “sudden termination» is the service provider, such as distributor, agent, etc. (see ECJ Corman Collins case, 19 12 13, C-9/12, and article 7.1.b.2 of Brussels I recast°).

            (b) Who is the Judge of the “sudden termination” of a “non- tacit contractual relationship”?

            – We believe that French courts may continue to give effect to a jurisdiction clause in tort case, especially when it expressly encompasses tort litigation (Court of cassation, 1° Ch. Civ., January 18, 2017, n° 15-26105, Riviera Motors / Aston Martin Lagonda Ltd).

            – In case of lack of choice of court clause, French courts will have jurisdiction over a “sudden termination” claim as the judge of the place where the harmful event occurred (art. 7.3 of Brussels I recast), which is the place where the sudden termination has effect…i.e. in France if the French company is the victim.

            “Sudden Termination” claim and Non-EU co-contractor

            The Granarolo solution will not ipso facto apply if a French victim brings a claim to French courts, based on a “sudden termination” made by a non-EU company. In non-EU relations, French judges could continue to retain only the tort qualification. In such a case, French courts may keep their jurisdiction based on the place where the harmful event occurs.

            Jurisdiction clause to a foreign court may be recognized in France (even for tort-based claims), provided that this jurisdiction clause is valid according to either a bilateral international convention or to the Hague Convention of 30 June 2005 on choice of court agreements. Otherwise, according to Egalim III law, imperative jurisdiction might be attributable to French courts.

            “Sudden Termination” claim and arbitration

            Stipulating an ad hoc or institutional arbitration clause is probably the safest solution to avoid the jurisdiction of French courts. Ideally, the clause will fix the seat of the arbitral tribunal outside France. According to the principle of competence-competence of the arbitrators, French courts declare themselves incompetent, unless the arbitration clause is manifestly void or manifestly inapplicable, regardless of contract or tort ground (see, in particular, Paris Court of Appeal, 5 September 2019, n°17/03703). The so-called “Egalim III” law has no impact on arbitration clauses.

            Conclusion: Foreign companies should not leave open the Jurisdiction and governing Law issues. They must negotiate a safe harbour, otherwise a French victim of a termination will likely to be entitled to bring a “sudden termination” claim in front of French judges (see what happen below in Part 2)

            How to master the “Sudden Termination” French rules?

            When French law is applicable, the foreign company will face the legal regime of article L442 -1.II of the French Commercial Code sanctioning “sudden termination”. As a preliminary remark, it is important to know, above all, that the implementation of the liability for “sudden termination” is the consequence of the lack of a notice or a too short notice. Thus, this scheme does not lay down an automatic compensation rule. In other words, as soon as reasonable notice is given by the author of the termination, liability on that basis can be dismissed.

            The prerequisite for “Sudden Termination”: an established commercial relationship

            All contracts are covered by this legal regime, except for contracts whose regulations provide for a specific notice of termination, like commercial agency contracts and transport of goods by road subcontracts.

            First, there must be a relationship that can be proven by a written contract or de facto, by behaviour of the parties. Article L.442-1 II of the French Commercial Code covers all “commercial” relationships and not only “contractual ones so that such relationship may be based on a succession of tacitly renewed contracts or a regular flow of business, materialized by multiple orders. This was recently recalled by the Supreme Court (Supreme Court, February 16, 2022, n° 20-18.844)

            Second, this relationship must have an established character. There is no legal definition, but this notion has been defined year after year by case law which has established an objective criterion and a more subjective one.

            (a) The objective criterion implies a sufficiently long, regular and significant relationship between the two parties. The duration of the relationship is the most important criterion. The relationship must also be regular, that is, it must not have been interrupted (too often or too long). The relationship must ultimately be meaningful and represent a serious flow of business between the parties, in volume or value.

            (b) The subjective test focuses primarily on the legitimate belief of the victim of the rupture in the continuation of the contract / the relationship that is based on factual elements, such as investment requests, budgets over several years, etc. Conversely, it is on the basis of the finding of a lack of legitimate belief in a common future that the terminating party can prove the absence of a stable character when he has resorted, on several occasions, a call for tenders (unless it is a trick).

            Anticipating a “Sudden Termination” claim

            (a) The termination may be total or partial

            The total rupture is materialized by a complete stop of the relations, for example ending the contract, stopping the sending of orders by the purchaser or the recording of orders by the supplier.

            The Supreme Court recently recalled that a significant drop in sales with a partner must be considered as a partial rupture of the relationship (February 16, 2022, n° 20-18.844, cited above). But the most complicated situation to deal with is the so-called partial rupture that will be deduced from a modification of elements that partly impacts the relationship but does not reduce it to nothing (ex.: a price increase or decrease, a change in the terms of payment or delivery).

            (b) The termination must be subject to a reasonable written prior notice

            The notice must be notified in writing. The absence of written notice is already a breach in itself. The notification must clearly reflect the willingness of a party to sever the relationship in whole or in part, which must be clearly identified. The notification must also clearly identify the date on which the relationship will end.

            Thus, an ambiguity on the notice period (e.g if the termination of an agreement is notified, whilst offering to maintain certain prices and payment terms, in the meantime) is considered as an insufficient termination notice (French Supreme Court, January 29, 2013, n° 11-23.676).

            Parties must distinguish between the letter of formal notice for default and the subsequent notification of the breach, giving notice (if applicable). During the period of notice, parties must fully comply with all contractual conditions.

            This principle also applies to distribution contracts subject to specific French rules imposing annual or multi-year negotiation obligations. In fact, the Court of cassation has ruled that “when the conditions of the commercial relationship established between the parties are subject to annual negotiation, modifications made during the notice period which are not so substantial as to undermine its effectiveness do not constitute a brutal breach of that relationship” (Cass. com., Dec. 7, 2022, n° 19-22.538).

            However, it’s not necessary to mention the reasons why the commercial relationship is terminated is not a fault or breach of the relationship. In fact, French courts consider that “the fact that the given reason to terminate was false does not in any way present the terminating party from terminating the commercial relationship” (Versailles Court of Appeal, June 10, 1999).

            The duration of the prior notice to be respected is not defined by French law which did not pose precise rule until the reform 2019. If several criteria are stated by case law, it should be noted that the most important criterion is the duration of the relationship. Judges also take into account the share of turnover achieved by the victim, the existence or not of a territorial exclusivity, the nature of the products and the sector of activity, the importance of the investments made by the victim especially to the relationship in question, and finally the state of economic dependence. Economic dependence is defined as the impossibility for a company to have a solution that is technically and economically equivalent to the contractual relations it has established with another company. Case law considers this to be an aggravating factor justifying a longer termination notice.

            The minimum notice period must be notified at the time of notification of termination. As a consequence, events that affect the victim after the notification, both positively (conclusion of a new contract) and negatively (loss of another custome), will not be taken into account by the judge, at the time of ruling, when assessing the “brutality” of the termination.

            The length of the notice given by the judges is very variable. The appreciation of notice is made on a case-by-case basis. It is very difficult to give a golden rule, even though roughly for each year of relationship, a month’s notice might be due (to modulate up or down depending on the other criteria in the relationship). But way of illustration, however, the following case law may be cited:

            • Paris Court of Appeal , Feb.9, 2022: 16-year relationship with 15 months’ notice;
            • Paris Court of Appeal, Jan.20, 2022: 12-year relationship with 8 months’ notice;
            • Paris Court of Appeal, Oct. 25, 2022: 16-year relationship with 18 months’ notice;
            • Paris Court of Appeal , Feb. 23, 2022: 17-year relationship with 11 months’ notice;
            • Paris Court of Appeal, Sept. 21, 2022: 5-year relationship with 14 months’ notice.

            Since the Order of April 24, 2019, which limits the length of reasonable notice to a maximum of 18 months, if the notice period granted by a party is 18 months, it cannot be held liable for a sudden termination. However, much of the litigation remains uncertain, as only exceptionally long or particularly sensitive relationships led, prior to 019, to the award of more than 18 months’ notice. Ordinance of April 24, 2019, limits to 18 months the maximum period of notice reasonably due under Article L 442-1.II. But much of the litigation will remain uncertain since only relations of exceptional longevity or particularly sensitive, could have led to the allocation of a notice higher than 18 months.

            Judges are not bound by the contractual notices stipulated in the contract. But if the author of the breach also violated the terms and conditions of termination provided for by contract, the victim may seek the responsibility of the author both on the tort basis of the sudden rupture and also on the basis of the breach of a contractual obligation.

            Cases in which “Sudden Termination” is ruled out

            The legal regime provides for two cases, and the case-law seems to have imposed others.

            (a) The two legal exceptions are Force majeure (very rarely consecrated by the courts) and the fault of the victim of the termination, case-law having added that it must be a serious violation (“faute grave”) of a contractual commitment or a legal provision (such as non-respect of an exclusivity, a non-compete, a confidentiality or a change of control duty, or non-payment of amounts due contractually).

            The judges consider themselves, of course, not bound by a termination clause defining what constitutes serious misconduct. In any case the party who terminates for serious misconduct must clearly notify it in its letter of termination. Above all, serious misconduct leads to a lack of notice, therefore, if the terminating party alleges serious misconduct but grants notice, whichever it may be, judges may conclude that the fault was not serious enough.

            Thus, the seriousness of the misconduct must be motivated by judges in their rulings. Noting that the contract was breached after two formal notices is not sufficient (Cass. com., Feb 16. 2022, n° 20-18.844).

            However, the Court of Cassation considers that “even in the case of serious misconduct justifying the immediate termination of the commercial relationship, the other party remains free to give the other party a notice” (Cass. Com., Oct. 14 2020, n°18-22.119).

            (b) In recent years, case-law has added other cases of liability waiver. This is the case when the rupture is the consequence of a cause external to the author of the rupture, such as the economic crisis, the loss of its own customers or suppliers, upstream or downstream.

            For example, in 2021 the Court of cassation has ruled that “the business partner is not entitled to an unchanged relationship and cannot refuse any adaptation required by economic changes” (Com, Dec 01, 2021, n°20-19.113). In fact, to be attributable to an economic player, a termination must be free and deliberate. This is not the case if termination is imposed by the economic situation.

            However, adding a liability exemption clause in a contract, aimed at waiving destinated to escape the penalties of article L. 442-1, is without consequences on the judge’s appreciation.

            Judges have also excluded “sudden termination” in the hypothesis of the end of the first period of a fixed-term contract, whatever its duration is: the first renewal of a contract, constitutes a foreseeable event for the victim of the rupture, which excludes the very notion of brutality; but once the contract has been renewed at least once, judges can subsequently characterize the victim’s legitimate belief in a new tacit renewal.

            Compensation for “Sudden Termination”

            Judges only compensate for the detrimental consequences of the brutality itself of the breach but do not compensate, at least in the context of article L442 -1.II, for the consequences of the breach itself.

            The basic rule is very simple: it is necessary to determine the length of the notice which should have been granted, from which the notice actually granted is deducted. This net notice is multiplied by the average monthly gross margin of the victim, or more often the so called margin on variable costs (i.e. the turnover minus costs disappearing with non-performance of the contract/relation). Defendant should not hesitate to ask for the full accountancy evidences, especially to identify (lower) margin rates, or even for a judicial expertise on those accounting elements. In general, the base of the average monthly margin consists of the last 24 or 36 months.

            The compensation calculated on the average margin is, in general, exclusive of any other compensation. However, the victim can prove that it has suffered other losses as a consequence of the brutality of the rupture. Such as dismissals directly caused by this brutality or the depreciation of investments made recently by the victim.

            Some practical tips when considering to anticipate “Sudden Termination”

            Even though the legal regime is still ambiguous and the case-law terribly casuistic which prevents to release strong guidelines, here are some practical tips when a company plans to terminate a relationship / contract:

            • in the case of a fixed-term contract renewable tacitly, the notification of non-renewal must be anticipated well in advance of the beginning of the contractual notice in order to avoid being in a situation where it is necessary to choose between not renewing the contract with a notice that is not sufficient or agree to see the contract renewed itself for a new term;
            • commercial teams must be made aware of the risk of partial sudden termination when they change the conditions of execution of a commercial relationship / contract too radically;
            • in some cases, it may be useful to send a pre-notice of termination with a “notice proposal” in order to try to validate this notice with the other party;
            • it may also be useful, in certain relationships, to notify the end of the relationship with different lengths of notice depending on the nature of the product lines;
            • Finally, the best way is to conclude an end-of-relation protocol, fixing the duration of the notice as well as, if necessary, the progressive decline of the orders, the whole within the framework of a settlement agreement which definitively waives any claim, including “sudden termination”.

            Sudden termination regime shall be taken into consideration when entering into the final phase of a duration relationship: the way in which the contract (or de facto relationship) is terminated must be carefully planned, in order to manage the risk of causing damages to the counterparty and being sued for compensation.

            Given the significance of the influencer market (over €21 billion in 2023), which now encompasses all sectors, and with a view for transparency and consumer protection, France, with the law of June 9, 2023, proposed the world’s first regulation governing the activities of influencers, with the objective of defining and regulating influencer activities on social media platforms.

            However, influencers are subject to multiple obligations stemming from various sources, necessitating the utmost vigilance, both in drafting influence agreements (between influencers and agencies or between influencers and advertisers) and in the behaviour they must adopt on social media or online platforms. This vigilance is particularly heightened as existing regulations do not cover the core of influencers’ activities, especially their status and remuneration, which remain subject to legal ambiguity, posing risks to advertisers as regulatory authorities’ scrutiny intensifies.

             

            Key points to remember 

            • Influencers’ activity is subject to numerous regulations, including the law of June 9, 2023.
            • This law not only regulates the drafting of influence contracts but also the influencer’s behaviour to ensure greater transparency for consumers.
            • Every influencer whose audience includes French users is affected by the provisions of the law of June 9, 2023, even if they are not physically present in French territory.
            • Both the law of June 9, 2023, and the “Digital Services Act,” as well as the proposed law on “fast fashion,” foresee increasing accountability for various actors in the commercial influence sector, particularly influencers and online platforms.
            • Despite a plethora of regulations, the status and remuneration of influencers remain unaddressed issues that require special attention from advertisers engaging with influencers.

             

            The law of June 9, 2023, regulating influencer activity  

            The definition of influencer professions

            The law of June 9, 2023, provides two essential definitions for influencer activities:

            • Influencers are defined as ‘natural or legal persons who, for consideration, mobilize their notoriety with their audience to communicate to the public, electronically, content aimed at promoting, directly or indirectly, goods, services, or any cause, engaging in commercial influence activities electronically.’
            • The activity of an influencer agent is defined as ‘that which consists of representing, for consideration,’ the influencer or a possible agent ‘with the aim of promoting, for consideration, goods, services, or any cause‘ (article 7) The influencer agent must take ‘necessary measures to ensure the defense of the interests of the persons they represent, to avoid situations of conflict of interest, and to ensure the compliance of their activity‘ with the law of June 9, 2023.

             

            The obligations imposed on commercial messages created by the influencer

            The law sets forth obligations that influencers must adhere to regarding their publications: 

            • Mandatory particulars: When creating content, this law imposes an obligation on influencers to provide information to consumers, aiming for transparency towards their audience. Thus, influencers are required to clearly, legibly, and identifiably indicate on the influencer’s image or video, regardless of its format and throughout the entire viewing duration (according to modalities to be defined by decree):

              – The mention “advertisement” or “commercial collaboration.” Violating this obligation constitutes deceptive commercial practice punishable by two years’ imprisonment and a fine of €300,000 (Article 5 of the law of June 9, 2023).
              – The mention of “altered images” (modification by image processing methods aimed at refining or thickening the silhouette or modifying the appearance of the face) or “virtual images” (images created by artificial intelligence). Failure to do so may result in a one-year prison sentence and a fine of €4,500 (Article 5 of the law of June 9, 2023).

            • Prohibited or regulated promotions: This law reminds certain prohibitions, subject to criminal and administrative sanctions, stemming from French law on the direct or indirect promotion of certain categories of products and services, under penalty of criminal or administrative sanctions. This includes the promotion of products and services related to:

              – health: surgery, aesthetic medicine, therapeutic prescriptions, and nicotine products;
              – non-domestic animals, unless it concerns an establishment authorized to hold them;
              – financial: contracts, financial products, and services;
              – sports-related: subscriptions to sports advice or predictions;
              – crypto assets: if not from registered actors or have not received approval from the AMF;
              – gambling: their promotion prohibited for those under 18 years old and regulated by law;
              – professional training: their promotion is not prohibited but regulated.

             

            The accountability of influencer behaviour

            The law also holds influencers accountable from the contracting of their relationships and when they act as sellers:

            • Regulation of commercial influence agreements: This law imposes, subject to nullity, from a certain threshold of influencer remuneration (defined by decree), the formalization in writing of the agreement between the advertiser and the influencer, but also, if applicable, between the influencer’s agent, and the mandatory stipulation of certain clauses (remuneration, mission description, etc.).
            • Influencer responsibility as a cyber seller: Influencers engaging in drop shipping (selling products without handling their delivery, done by the supplier) must provide the buyer with all information in French as required by Article L. 221-5 of the Consumer Code about the product, such as its availability and legality (i.e., guarantee that the product is not counterfeit), applicable product warranty, and supplier identity. Additionally, influencers must ensure the proper delivery and receipt of products and, in case of default, compensate the buyer. Influencers are also logically subject to obligations regarding deceptive commercial practices (for more information, the DGCCRF website explain the dropshipping).

             

            The accountability of other actors in the commercial influence ecosystem

             

            Joint and several liability is set by law, for the advertiser, influencer, or influencer’s agent for damages caused to third parties in the execution of the commercial influence contract, allowing the victim of the damage to act against the most solvent party.

            Furthermore, the law introduces accountability for online platforms by partially incorporating the European Regulation 2022/2065 on digital services (known as the “DSA“) of October 19, 2022.

             

            French regulation and international influencers

             

            Influencers established outside the European Union (including also Switzerland and the EEA) who promote products or services to a French audience must obtain professional liability insurance from an insurer established within the EU. They must also designate a legal or natural person providing “a form of representation” (SIC) within the EU. This representative (whose regime is not very clear) is remunerated to represent the influencer before administrative and judicial authorities and to ensure the compliance of the influencer’s activity with law of June 9, 2023.

            Furthermore, according to law of June 9, 2023, when the contract binding the influencer (or their agency) aims to implement a commercial influence activity electronically “targeting in particular an audience established in French territory” (SIC), this contract should be exclusively subject to French law (including the Consumer Code, the Intellectual Property Code, and the law of June 9, 2023). According to this law, the absence of such a stipulation would be sanctioned by the nullity of the contract. Law of June 9, 2023, seems to be established as an overriding mandatory law capable of setting aside the choice of a foreign law.

            However, the legitimacy (what about compliance with the definition of overriding mandatory rules established by Regulation Rome I?) and effectiveness (what if the contract specifies a foreign law and a foreign jurisdiction?) of such a legal provision can be questioned, notably due to its vague and general wording. In fact, it should be the activity deployed by the “foreign” influencer to their community in France that should be apprehended by French overriding mandatory rules, rather than the content of the agreement concluded with the advertiser (which itself could also be foreign, by the way).

             

            The other regulations governing the activity of influencers

             

            The European regulations

            The DSA further holds influencers accountable because, in addition to the reporting mechanism imposed on platforms to report illicit content (thus identifying a failing influencer), platforms must ensure (and will therefore shift this responsibility to the influencer) the identification of commercial communications and specific transparency obligations towards consumers.

            The «soft law»

            As early as 2015, the Advertising Regulatory Authority (“ARPP”) issued recommendations on best practices for digital advertising. Similarly, in March 2023, the French Ministry of Economy published a “code of conduct” for influencers and content creators. In 2023, the European Commission launched a legal information platform for influencers. Although non-binding, these rules, in addition to existing regulations, serve as guidelines for both influencers and content creators, as well as for judicial and administrative authorities.

             

            The special status of child influencers

            The law of October 19, 2020, aimed at regulating the commercial exploitation of children’s images on online platforms, notably opens up the possibility for child influencers to be recognized as salaried workers. However, this law only targeted video-sharing platforms. Article 2 of the law of June 9, 2023, extended the provisions regarding child influencer labor introduced by the 2020 law to all online platforms. Finally, a recent law aimed at ensuring respect for the image rights of children was published on February 19, 2024, introducing a principle of joint and several responsibility of both parents in protecting the minor’s image rights.

             

            The status and remuneration of influencers: uncertainty persists

             

            Despite the diversity of regulations applicable to influencers, none address their status and remuneration.

            The status of the influencer

            In the absence of regulations governing the status of influencers, a legal ambiguity persists regarding whether the influencer should be considered an independent contractor, an employee (as is partly the case for models or artists), or even as a brand representative (i.e. commercial agent), depending on the missions contractually entrusted to the influencer.

            The nature of the contract and the applicable social security regime stem from the missions assigned to the influencer:

            • In the case of an employment contract, the influencer will fall under the general regime for employees and assimilated persons, based on Articles L. 311-2 or 311-3 of the French Social Security Code.
            • In the case of a service contract, the influencer will fall under the regime for self-employed workers.

             

            The existence of a relationship of subordination between the advertiser and the influencer typically determines the qualification of an employment contract. Subordination is generally characterized when the employer gives orders and directives, has the power to control and sanction, and the influencer follows these directives. However, some activities are subject to a presumption of an employment contract; this is the case (at least in part) for artist contracts under Article L. 7121-3 of the French Labor Code and model contracts under Article L. 7123-2 of the French Labor Code.

             

            The remuneration of the influencer

            The influencer can be remunerated in cash (fixed or proportional) and/or in kind (for example: receiving a product from the brand, invitations to private or public events, coverage of travel expenses, etc.). The influencer’s remuneration must be specified in the influencer agreement and is directly impacted by the influencer’s status, as certain obligations (minimum wage, payment of social security contributions, etc.) apply in the case of an employment contract.

            Furthermore, the remuneration (for the influencer’s services) must be distinguished from that of the transfer of their copyrights or image rights, which are subject to separate remuneration in exchange for the IP rights transferred.

             

            The influencers… in the spotlight

            The law of June 9, 2023, grants the French authority (i.e. the Consumer Affairs, Competition and Fraud Prevention Agency, “DGCCRF”) new injunction powers (with reinforced penalties). This comes in addition to the recent creation of a “commercial influence squad“, within the DGCCRF, tasked with monitoring social networks, and responding to reports received through Signal Conso. The law provides for fines and the possibility of blocking content.

            As early as August 2023, the DGCCRF issued warnings to several influencers to comply with the new regulations on commercial influence and imposed on them the obligation to publicly disclose their conviction for non-compliance with the new provisions regarding transparency to consumers on their own social networks, a heavy penalty for actors whose activity relies on their popularity (DGCCRF investigation on the commercial practices of influencers).

            On February 14, 2024, the European Commission and the national consumer protection authorities of 22 EU member states, Norway, and Iceland published the results of an analysis conducted on 570 influencers (the so-called “clean-up operation” of 2023 on influencers): only one in five influencers consistently presented their commercial content as advertising. 

            In response to environmental, ethical, and quality concerns related to “fast fashion,” a draft law aiming to ban advertising for fast fashion brands, including advertising done by influencers (Proposal for a law aiming to reduce the environmental impact of the textile industry), was adopted by the National Assembly on first reading on March 14, 2024.

            Lastly, the law of June 9, 2023, has been criticized by the European Commission, which considers that the law would contravene certain principles provided by EU law, notably the principle of “country of origin,” according to which the company providing a service in other EU countries is exclusively subject to the law of its country of establishment (principle initially provided for by the E-commerce Directive of June 8, 2000, and included in the DSA). Some of its provisions, particularly those concerning the application of French law to foreign influencers, could therefore be subject to forthcoming – and welcome – modifications.

            Summary

            To avoid disputes with important suppliers, it is advisable to plan purchases over the medium and long term and not operate solely on the basis of orders and order confirmations. Planning makes it possible to agree on the duration of the ‘supply agreement, minimum volumes of products to be delivered and delivery schedules, prices, and the conditions under which prices can be varied over time.
            The use of a framework purchase agreement can help avoid future uncertainties and allows various options to be used to manage commodity price fluctuations depending on the type of products , such as automatic price indexing or agreement to renegotiate in the event of commodity fluctuations beyond a certain set tolerance period.

            I read in a press release: “These days, the glass industry is sending wine companies new unilateral contract amendments with price changes of 20%…”

            What can one do to avoid the imposition of price increases by suppliers? 

            • Know your rights and act in an informed manner
            • Plan and organise your supply chain

            Does my supplier have the right to increase prices?

            If contracts have already been concluded, e.g., orders have already been confirmed by the supplier, the answer is often no.

            It is not legitimate to request a price change. It is much less legitimate to communicate it unilaterally, with the threat of cancelling the order or not delivering the goods if the request is not granted.

            What if he tells me it is force majeure?

            That’s wrong: increased costs are not a force majeure but rather an unforeseen excessive onerousness, which hardly happens.

            What if the supplier canceled the order, unilaterally increased the price, or did not deliver the goods?

            He would be in breach of contract and liable to pay damages for violating his contractual obligations.

            How can one avoid a tug-of-war with suppliers?

            The tools are there. You have to know them and use them.

            It is necessary to plan purchases in the medium term, agreeing with suppliers on a schedule in which are set out:

            • the quantities of products to be ordered
            • the delivery terms
            • the durationof the agreement
            • the pricesof the products or raw materials
            • the conditions under which prices can be varied

            There is a very effective instrument to do so: a framework purchase agreement.

            Using a framework purchase agreement, the parties negotiate the above elements, which will be valid for the agreed period.

            Once the agreement is concluded, product orders will follow, governed by the framework agreement, without the need to renegotiate the content of individual deliveries each time.

            For an in-depth discussion of this contract, see this article.

            • “Yes, but my suppliers will never sign it!”

            Why not? Ask them to explain the reason.

            This type of agreement is in the interest of both parties. It allows planning future orders and grants certainty as to whether, when, and how much the parties can change the price.

            In contrast, acting without written agreements forces the parties to operate in an environment of uncertainty. Suppliers can request price increases from one day to the next and refuse supply if the changes are not accepted.

            How are price changes for future supplies regulated?

            Depending on the type of products or services and the raw materials or energy relevant in determining the final price, there are several possibilities.

            • The first option is to index the price automatically. E.g., if the cost of a barrel of Brent oil increases/decreases by 10%, the party concerned is entitled to request a corresponding adjustment of the product’s price in all orders placed as of the following week.
            • An alternative is to provide for a price renegotiation in the event of a fluctuation of the reference commodity. E.g., suppose the LME Aluminium index of the London Stock Exchange increases above a certain threshold. In that case, the interested party may request a price renegotiationfor orders in the period following the increase.

            What if the parties do not agree on new prices?

            It is possible to terminate the contract or refer the price determination to a third party, who would act as arbitrator and set the new prices for future orders.

            Christophe Hery

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              How to manage price changes in the supply chain

              27 de Março, 2023

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              How real estate tokenisation works, what is the regulatory framework, and what rights investors actually acquire?

              Real estate tokenisation, already present in Spain for several years, is no longer a futuristic promise but a tangible reality in the Spanish market. It represents more than just a technological innovation: it signifies a profound transformation in how we understand ownership, investment, and liquidity within the real estate sector — one of the most traditional and tightly regulated areas of our economy.

              What is real estate tokenisation and how does it work?

              In essence, to tokenise a property today means converting the economic rights associated with that asset into digital units that can circulate on blockchain-based platforms. Each token represents a fraction of those economic rights, allowing investors with more modest capital to access a market that has traditionally required substantial investments.

              The role of smart contracts

              Tokens operate through smart contracts that automatically execute the distribution of rental income or resale proceeds of that partial representation of the property, including any potential difference in value, eliminating intermediaries and providing transparency to the process. This automation is not merely cosmetic: it reduces operational costs, speeds up transactions, and potentially increases the liquidity of assets that have historically been among the least liquid in the market.

              The legal reality: what is actually tokenised in Spain

              It is essential to clarify from the outset a key point often blurred by marketing discourse: in practice, real estate tokenisation projects in Spain do not tokenise the property itself but rather the economic rights linked to a corporate vehicle (usually a special purpose vehicle, or SPV) that owns the property. Spanish law only allows the tokenisation of shares in joint-stock companies (sociedades anónimas) using distributed ledger technology; shares in limited liability companies (sociedades limitadas) cannot be tokenised. This means that if the SPV is a limited liability company, its shares cannot be directly tokenised — only other instruments such as participative loans or credit rights over income streams can be represented as tokens. Only if the SPV is incorporated as a joint-stock company is it legally possible to tokenise its shares.

              What rights does a real estate token investor actually acquire?

              An investor who acquires a token does not become a direct co-owner of the property. Depending on the structure chosen, they may become a shareholder in a tokenised joint-stock company that owns the property or a holder of economic rights derived from participative loans or other indirect forms of economic participation issued by the SPV that owns the asset. The distinction is crucial: if the company faces solvency issues or bankruptcy, the value of the token collapses with it, and the investor cannot exercise any direct real rights over the property.

              Spanish law, rooted in centuries of land registry tradition, does not currently allow the transfer of real property rights through the mere transfer of tokens; a public deed and registration are required for the transfer to be effective against third parties. The SPV structure is therefore a compromise between technological possibilities and the demands of the current legal framework.

              Regulatory framework for real estate tokenisation in Spain

              CNMV authorisation and the 2023 Securities Market Law

              The Spanish regulator has begun to establish a legal foundation for this technology to develop within a secure framework. In 2023, the Spanish National Securities Market Commission (CNMV) authorised Adventurees Capital PFP as the first crowdfunding platform to issue tokenised securities — a milestone in the convergence of crowdfunding and blockchain. This authorisation was accompanied by the approval of Law 6/2023 on the Securities Market, which expressly recognises the representation of transferable securities through distributed ledger technologies such as blockchain, granting them full legal validity.

              The role of the Land Registry in the blockchain era

              In parallel, the Spanish Association of Land Registrars is exploring how to integrate blockchain technology into the registry system, although it is important to clarify the real scope of these initiatives. Current projects focus mainly on complementary applications such as digital management of the Building Book or improved traceability and accessibility of registry information. They do not aim to replace the fundamental pillars of the system: execution of public deeds before a notary and registration of ownership, which remain absolutely mandatory for the transfer of real rights over property. Registrars are firm in their institutional stance: blockchain can complement and streamline document management, but it cannot replace the legal control exercised by the registrar or the protection of third parties offered by the Land Registry — both essential components of the Spanish legal system. This position reflects the current limitation of the model: tokens circulate on the blockchain representing positions in SPVs or economic rights over them, but the actual ownership of the property remains anchored in the traditional registry system, held by the corporate vehicle, and any transfer of that ownership must still follow the conventional legal process with all its guarantees.

              European regulation: ECSPR, MiCA and the DLT Pilot Regime

              Spain also benefits from a European regulatory framework that is positioning the EU as a global leader in digital asset regulation. The European Crowdfunding Service Providers Regulation (ECSPR) harmonises the rules for crowdfunding platforms, allowing an authorised platform in one Member State to operate across the EU through the so-called “European passport”. The MiCA Regulation, which came fully into force on 30 December 2024, broadly regulates crypto-asset markets, setting obligations for both issuers and service providers. The DLT Pilot Regime (EU Regulation 2022/858) allows market infrastructures based on distributed ledger technology to operate under certain temporary exemptions, creating a controlled testing environment to assess the potential of these technologies in financial markets.

              The Spanish regulator’s approach could be described as cautiously supportive: innovation is encouraged, but strict compliance with anti-money laundering, customer identification, and disclosure obligations is required to protect investors. This is not technological laissez-faire, but rather an effort to integrate innovation within a solid framework of legal guarantees.

              Legal challenges and risks of real estate tokenisation

              The risks of the SPV structure

              The legal challenges that remain are significant and deserve attention. The SPV structure, while legally viable, introduces an additional layer of complexity and risk that must be clearly communicated to investors. Unlike direct ownership — where the investor holds real rights over the property enforceable against third parties — in the current tokenised model, investors hold positions in indirect forms of economic participation (shares, participative loans, credit rights) linked to the company that owns the property. This has important implications for corporate liability, taxation, and insolvency protection.

              The disconnect between the on-chain and off-chain worlds

              It is also essential to understand that the connection between the “on-chain” world (where tokens circulate) and the “off-chain” world (where property rights are recorded) is neither direct nor automatic. Transferring a token does not in itself alter the Land Registry: ownership of the property remains with the SPV regardless of who holds the tokens, and only a duly notarised and registered deed can change that ownership. The exploratory projects of the Land Registrars aim to improve efficiency in information management but do not alter this fundamental principle. As in any emerging market, it is essential to prevent fraudulent schemes that promise unrealistic returns or market tokens without proper legal backing.

              Practical implications for investors and legal practitioners

              For legal practitioners, real estate tokenisation may require adapting contracts, corporate bylaws, and financing structures to an environment where rights circulate digitally and in a decentralised manner. For investors, it offers an opportunity to diversify portfolios with smaller capital contributions and greater liquidity potential than traditional real estate investment, provided they understand that they are not acquiring direct ownership of the property but rather a financial position linked to the corporate structure that owns it. And for the wider economy, it could invigorate a real estate market worth trillions of euros by facilitating the entry of retail capital previously excluded from such investments.

              The future of real estate tokenisation in Spain

              This is an evolution that combines law, technology, and finance in an inseparable way. It is essential to understand that tokenisation is not a passing trend but a tool that, when properly used and regulated, can transform access to one of society’s most valuable assets — property. However, this transformation currently operates through intermediate corporate structures and indirect forms of economic participation, not through direct ownership as commercial language sometimes suggests. It certainly does not imply an immediate revolution of Spain’s land registration system, whose fundamental guarantees remain intact.

              It is quite common for business relationships with agents or distributors to last for years without any signed documents. And be careful, because we know that a contract can exist even verbally.

              The absence of a written contract will add difficulties in the event of a possible claim, so what you do between the decision to terminate, and the moment of the claim is very important. Remember: ‘anything you write will be used against you’.

              The decision to terminate a business relationship is a very delicate moment to which, for some reason, solicitors are not invited. Here are some examples (all real) in which companies or employees with the best of intentions wrote to the agent/distributor. All of them were subsequently very damaging to the company:

              Saying ‘We are terminating our business relationship’ when the strategy will be to argue that no such business relationship exists, but rather that there are separate and linked contracts (e.g., supply rather than ongoing distribution contract; very significant compensation consequences).

              ‘You no longer represent our company’, which may be evidence that you did so before.

              ‘As of day X, you may no longer act on behalf of our company,’ which would prove that you were previously able to act on its behalf.

              ‘You may not attend the X trade fair on our behalf.’ A way of confirming that the agent/distributor’s responsibilities included participating in trade fairs and probably accrediting the customers obtained.

              ‘The sales you promoted have been significantly reduced in year N.’ When there is no written contract or other form of documentation, imputing a breach of an obligation that is not clear can be counterproductive.

              Saying ‘You are not actively promoting our products’ and then adding: ‘We urge you to stop promoting the sale of our products’.

              ‘You are no longer our exclusive representative’, which proves a type of relationship (representation/agent) and a tacit or express agreement (‘exclusivity’).

              ‘We have appointed another representative in your area’, which shows that the agent/distributor had an assigned area and was “representing”.

              ‘From this moment on, orders will be handled by X’, which also confirms a type of relationship.

               

              In summary: from the moment the company considers terminating a commercial relationship, especially when it is not in writing and before sending any letter, it is advisable to think carefully about the strategy in case of a possible claim. This is the best time to seek advice and avoid surprises. Any communication that is not in line with this strategy designed from the outset can only lead to confusion and problems.

              Since the General Data Protection Regulation (GDPR) took effect in 2018, the European Union (EU) has granted adequacy status to only a limited number of jurisdictions — those whose data protection regimes are deemed to provide an “essentially equivalent” level of protection to that of the EU. The current list includes Andorra, Argentina, Canada (under PIPEDA), Faroe Islands, Guernsey, Isle of Man, Israel, Japan, Jersey, New Zealand, South Korea, Switzerland, Uruguay, the United Kingdom, and the United States (limited to companies certified under the Data Privacy Framework).

              As of 5 September 2025, Brazil is on the verge of joining this exclusive group. The European Commission has issued a draft adequacy decision concluding that the Brazilian General Data Protection Law (Lei Geral de Proteção de Dados Pessoais – LGPD), in conjunction with Brazil’s broader legal and constitutional framework, offers protections that are essentially equivalent to those found in the GDPR. While Brazil’s rules offer somewhat more flexibility in specific areas of data processing, the foundational principles and safeguards are well-aligned with EU standards.

              Once finalized, the adequacy decision will authorize the free flow of personal data from the EU to Brazil without the need for additional contractual clauses or technical safeguards. Such a development is not just regulatory — it also answers a core political argument made by LGPD advocates since its inception: that the absence of a comprehensive data protection framework was undermining Brazil’s international competitiveness by limiting data flows and discouraging investment. For businesses, the EU decision may finally mean the removal of a significant layer of compliance complexity — a development especially welcome by small and medium-sized enterprises engaged in cross-border trade or service provision. The draft is currently under review by the European Data Protection Board (EDPB) and the Member States of the EU.

              The Commission’s assessment highlights several key aspects of Brazil’s data protection landscape. It begins by noting that the Brazilian Constitution expressly guarantees the right to privacy and the protection of personal data — a notable distinction among non-EU jurisdictions. These protections are further supported by Brazil’s ratification of the American Convention on Human Rights and its recognition of the jurisdiction of the Inter-American Court of Human Rights, reinforcing a commitment to fundamental rights and democratic oversight.

              The LGPD mirrors the GDPR in many critical respects and defines its territorial scope clearly. It applies to: (i) data processing carried out within Brazilian territory, (ii) the offering of goods or services to individuals in Brazil, and (iii) data collected in Brazil, even if subsequently processed abroad. This aligns well with the extraterritorial provisions of the GDPR. The definitions of personal data, sensitive data, controller, and processor are materially similar, as are the key principles governing processing — including lawfulness, purpose limitation, data minimization, accuracy, transparency, and security. The law expressly excludes anonymized data from its scope and establishes specific exemptions for journalistic activities, public security, and scientific research.

              Another strength is Brazil’s institutional framework. The National Data Protection Authority (ANPD) was recently transformed into an autonomous regulatory agency, enhancing its independence and technical capacity. The ANPD holds both regulatory and enforcement powers: it can issue binding regulations, impose administrative sanctions, and publish authoritative guidance. To date, it has issued key guidelines on topics such as consent, legitimate interest, the role of the Data Protection Officer (DPO), and security incident reporting. Internationally, the ANPD is an active participant in global data protection dialogue — it is a member of the Global Privacy Assembly and an official observer to the Council of Europe’s Convention 108.

              The LGPD’s approach to international data transfers is also structurally aligned with the GDPR. It requires appropriate safeguards such as standard contractual clauses, allows for future adequacy decisions under a regime comparable to Article 45 of the GDPR, and includes detailed provisions for onward transfers and transit data — that is, data merely passing through Brazil without further processing. The rights of data subjects are robust and familiar to European practitioners: access, rectification, erasure, portability, and withdrawal of consent are guaranteed. Lawful bases for processing are also aligned — including consent, legal obligations, contract execution, and legitimate interest. Notably, the LGPD requires a documented balancing test when relying on legitimate interest, bringing additional accountability to this flexible legal basis.

              Security incidents involving personal data must be notified to both the ANPD and affected data subjects when there is a significant risk of harm. The standard notification deadline is 72 hours, and the required content aligns closely with Articles 33 and 34 of the GDPR. The ANPD may also order public disclosure of incidents or require remedial measures, depending on the nature and scope of the breach.

              Importantly, this process is not one-sided. In parallel to the European Commission’s adequacy decision, the ANPD is conducting its own adequacy assessment of the EU and EEA data protection frameworks. This process is regulated by the Brazilian Resolution CD/ANPD No. 19/2024, which governs international data transfers. Once the technical and legal evaluation is complete, the ANPD’s Board of Directors will issue a formal decision. This reciprocal move reflects Brazil’s commitment to mutual recognition and regulatory symmetry — a positive signal for companies on both sides of the Atlantic.

              In conclusion: If confirmed, Brazil’s adequacy status will simplify international operations, reduce compliance costs, and expand opportunities for data-driven business and legal cooperation. For European lawyers advising SMEs with interests in Latin America, this development is a strategic signal: Brazil is emerging not just as a growing market, but as a legally compatible and data-safe jurisdiction for international partnerships.

              Remember the USA – EU agreement on 15% tariffs? I wrote that with a negotiator like Trump the game is never over (article here) and—after the recent interlude featuring a threat of 100% tariffs on pharmaceuticals—the U.S. government has announced the imposition of an overall 107% duty on Italian pasta, which could take effect on January 1, 2026.

              Where this new duty comes from

              The antidumping investigation was launched by the U.S. Department of Commerce at the request of certain competing American companies and is based on a 1996 antidumping order that allows for periodic reviews of imports of Italian pasta. The Department of Commerce conducts these checks annually to assess whether Italian producers are selling pasta at prices lower than the U.S. domestic market, a practice known as “dumping.”

              Companies involved in the investigation

              The Department of Commerce selected two sample companies for in-depth analysis, defined as “mandatory respondents”: La Molisana and Pastificio Lucio Garofalo. According to the official document published by the U.S. administration, for the period from July 1, 2023 to June 30, 2024, both companies allegedly sold their products below market prices, resulting in the imposition of a duty of 91.74%.

              U.S. authorities justified this percentage by claiming the two companies did not provide complete or compliant information as requested by the Department and were therefore insufficiently cooperative during the investigation. What is very important is that, in addition to the two companies directly examined, the additional 91.74% duty is also applied to numerous other Italian producers not individually reviewed. This methodology, while formally permitted under U.S. law as an exception, is being applied without any direct verification of the other companies.

              Next steps in the procedure

              Italy’s Ministry of Foreign Affairs moved immediately, formally intervening in the proceeding as an “interested party” through the Italian Embassy in Washington. The Foreign Ministry is working in close coordination with the companies concerned and, in concert with the European Commission, to persuade the U.S. Department to revise the provisional duties.

              The two companies involved (La Molisana and Garofalo) can submit documentation to contest the dumping allegations. However, if dumping is confirmed, the Department of Commerce will instruct Customs to apply antidumping duties on goods sold and entered into U.S. commerce.

              The preliminary nature of this determination means there is still room to change the decision before it becomes final.

              Possible effective date

              The new super-duty of 91.74%, which will be added to the existing 15% tariff for a total of 107%, is scheduled to take effect on January 1, 2026. This date therefore represents a crucial deadline for all ongoing diplomatic and legal actions.

              If confirmed, the economic impact would be significant: in 2024, Italian pasta exports to the United States reached a value of €671 million according to Coldiretti, accounting for nearly 17% of the sector’s total exports. A 107% duty would risk seriously undermining competitiveness in one of the most important markets for Italian agri-food products.

               What to do between now and January 1, 2026?

              At this stage, the entry into force of the new duty depends on the outcome of the ongoing procedure: given what has happened in recent months, and the political use the U.S. administration has made of tariffs—well beyond their technical function—it is reasonable to be pessimistic.

              So, what to do? In recent months we have seen companies react to the uncertainty over the fate of the tariffs in three ways:

              • Some rushed to ship as many products as possible before the potential effective date of the duty;
              • Some granted—upfront—discounts equivalent to the threatened duty, in case it came into force;
              • Some suspended orders, pending definitive news on the impact of the duties.

              These are all  valid options, but other effective tools for managing the uncertainty caused by the flurry of announcements, negotiations, and threats from the U.S. administration should not be forgotten: the risk of new duties being introduced, or existing ones being increased, can be managed in the contract by agreeing with the U.S. importer how any tariff change will affect the product.

              The parties can stipulate, for example, that the increase will be split equally; or that the importer will bear it beyond a certain threshold; or that if the duty exceeds a certain level, the contracts may be terminated. You can find a deeper dive in this article.

              The only certainty is that trade relations with the U.S. will stay unpredictable for a long time, and it’s vital to carefully manage the risk factors involved in selling products there. Right now, the focus is on tariffs and prices, and I encourage you to take this chance to thoroughly review existing agreements and assess whether—and how—other important points are addressed that could entail significant liabilities: we discuss them, very practically, in this book.

              A dedicated notary account in Brazil is a legal mechanism that brings greater security, transparency, and reliability to financial transactions. Regulated under Law 8.935/1994 and Provision No. 197/2025, this service allows notaries to receive, manage, and release funds only after contractual conditions have been fulfilled. By ensuring segregation of assets, traceability, and impartial oversight, dedicated notary accounts provide an effective escrow-like solution for real estate deals, mergers and acquisitions, import/export operations, high-value asset purchases, and complex commercial contracts. This tool not only reduces legal risks and potential disputes but also strengthens trust between parties by guaranteeing that payments are safeguarded until obligations are met.

              The legal basis can be found in Law 8.935/1994, § 1 of art. 7-A, which allows notaries to receive, deposit, and manage amounts related to legal transactions, with transactions subject to objectively verifiable facts/conditions. Provision No. 197, dated June 13, 2025, regulates, at the national level, the service of notarial accounts linked to Notary Public Offices.

              Practical applications: among others, in the following transactions:

              • Real estate: guarantee that the down payment and settlement amounts will be secured in a specific account. This mitigates the risk of misappropriation of funds and ensures that the money will be released only after all contractual conditions have been met.
              • M&A: the linked notarial account creates a standardized escrow mechanism for the payment of price/holdbacks/earn-outs and conditional obligations.
              • Purchase and Sale of High-Value Movable Property: the linked account can be used to guarantee payment. The buyer deposits the amount and the seller knows that the money is safe, being released only after the transfer of ownership and delivery of the goods.
              • Import and Export: the transaction amount can be deposited with the notary and released to the exporter only after confirmation of delivery of the goods in the destination country, for example.
              • Guarantee of Obligations: In any contract that provides for the payment of a sum of money as a guarantee, the notary account can be used to provide greater security to the parties.
              • Supply, EPC/turnkey, and construction contracts: performance retentions, milestone acceptance (commissioning, as-built, issuance of ART/CREA), and payment against formal acceptance.
              • Contractual joint ventures and commercial partnerships: advances conditional on licenses, authorizations, or competitive approval, where applicable.

              Reduction of Legal Risks: The use of linked accounts reduces the chances of litigation related to lack of clarity about the origin and destination of funds. Companies can clearly demonstrate that payments were made and held by an impartial and secure institution.

              Operational structure: limited to banking entities affiliated with the CNB, which must ensure the segregation of assets, traceability through audit trails, and proof of all transactions. The authorization of the delegate requires prior accreditation and electronic registration of the essential details of the transaction and its conditions in the CNB system, with access restricted to the parties and the notary.

              Specific Purpose: amounts received as payment, guarantee, or advance payment as a result of notarial acts must be deposited in a bank account linked to the specific act and may only be moved for the purpose for which they are intended.

              Transparency and Traceability: With the linked notarial account, it is possible to clearly track the financial flow of each transaction, which increases transparency for all parties and for supervisory bodies.

              Verification of conditions and release. Once the objective conditions have been met, the notary authorizes the transfer to the recipients and files the proof of verification. In the event of a dispute between the parties, the notary suspends any movement, draws up a notarial deed, and advises on a consensual or judicial solution, without deciding on the effectiveness/termination of the transaction; if the transaction is frustrated and no solution is found, the procedure is terminated and the amounts are returned to the depositor, in accordance with the agreed clauses.

              Confidentiality and access. In transactions with a confidentiality clause, the notary public maintains confidentiality and does not issue certificates regarding the content of the transaction; documents are accessible only for correctional purposes or by court order.

              Remuneration and costs. The notary’s remuneration for the notarial account service is paid by the financial institution under the terms of the agreement, and the transfer of additional costs to the user is prohibited, without prejudice to fees for any related notarial acts.

              Article 442-1.II of the French Commercial Code (former Article L. 442-6.I.5 °) sanctions the termination by a trader of a written contract or an informal business relationship without giving sufficient written prior notice. Over the last twenty years, this article became the recurring legal basis for all compensation actions (up to 18 months of gross margin, plus other damages) when a commercial relationship or a contract ends (totally or even partially).

              Therefore, a foreign trader who contracts with a French company should try not to fall under the aegis of this rule (part I) and, if it cannot, should understand and control its implementation (part II).

              In a nutshell:

              How can a foreign company avoid or control the risk linked to the “sudden termination of commercial relations” set by French law? Foreign companies doing business with a French counterpart should:

              • enter, as soon as possible, into a written (frame) agreement with their French suppliers or customers, even for a very simple relation and;
              • stipulate a clause in favour of foreign court or arbitration and foreign applicable law while, failing to choose it, they would rather be subject to French courts and laws;

              How can a foreign company master the risk linked to the “sudden termination of commercial relations” set by French law? Foreign companies doing business with a French counterpart should:

              • know that this article applies to almost all type of commercial relationship or contracts, whether written or not, fixed-term or not;
              • check whether its relation/contract is sufficiently long, regular and significant and whether the other party has a legitimate belief in the continuation of this relation/contract;
              • give a written notice of termination or non-renewal (or even of a major modification), which length takes mainly into account the duration of the relation, irrespectively of the length of the contractual notice;
              • invoke, with cautiousness, force majeure and gross negligence of the party, to set aside “sudden termination”;
              • anticipate, in case of insufficient notice, a compensation which amount is the product of the average monthly gross margin per the length of non-granted prior notice.

              How to avoid the application of the French “Sudden Termination” rule?

              In international matters, a foreign company must anticipate whether its relationship will be subject or not to French law before terminating a contract or a business relationship and, in case of dispute, whether it will be brought before a French court or not.

              What will be the law applicable to “Sudden Termination”?

              It is quite difficult for a foreign company to correctly grasp the French legal framework of conflict of laws rules applicable to “sudden termination”. In a ruling of September 19, 2018 (RG 16/05579, DES/ Clarins), the Court of appeal of Paris made, by an implicit reference to the Granarolo EU ruling (07 14 16, N°C196/15) an extension of the contractual qualification to most of the business relationships which will improve foreseeability in order for a foreign company to try to exclude French law and its “sudden termination” rule.

              Sudden termination of a written contract or of a “tacit contractual relationship”

              According to Rome I Regulation (EC No 593/2008, June 17 2008) on the law applicable to contracts:

              – In case of choice of a foreign law by the parties: The clause selecting a foreign applicable law will be valid and respected by French judges (subject to OMR, see below), provided that the choice of law by the parties is express or certain.

              – In case of no choice by the parties: French law will likely to be declared applicable as it might be either the law of the country where is based the distributor/franchisee, etc. or the law of the country where the party who is to provide the service features of the contract has its domicile.

              Sudden termination of a “non-tacit contractual relationship”

              In case of informal relationship (i.e. orders placed from time to time), French judges would retain the tort qualification and will refer to the Rome II Regulation (No 864/2007, July 11 2007) on the law applicable to non-contractual obligations..

              – In case of choice of a foreign law by the parties: a properly drafted choice of foreign law clause should be implemented by a French judge, provided that it expressly includes tort cases.

              – In case of no choice of law by the parties: French law will likely to be declared applicable as it might be the law of the country where the damage occurs (regardless of the place of the causing event or that of the indirect consequences), which is the place of the head office where the French victim suffers the consequences of the termination.

              “Sudden Termination” rule, a French Overriding Mandatory Rule?

              The position of French courts is quite vague and unsatisfactory, and this has been the case for a long time. To make it short: the Commercial Court of Paris judges that “sudden termination” is not an OMR, the Court of appeal of Paris (sole French appellate court in charge of “sudden termination” cases) is also not in favour of the OMR qualification on the grounds that the text “protects purely private economic interests” (CA Paris, pôle 5, ch. 5, Feb 28. 2019, n° 17/16475 / CA Paris, pôle 5, ch. 5, Oct 8. 2020, n°17/19893). Recently, the Paris Court of Appeal reaffirmed that the rules on sudden termination of established commercial relations are not an OMR (Court of appeal Paris, March 11, 2021, n° 18/03112).

              The French Supreme Court has never explicitly addressed the issue (OMR or not OMR). Indeed, the French Supreme Court ruled in the Expedia case (Cass. com., July 8, 2020, n°17-31.536) that the provisions of the former article L. 442-6, I, 2º and II, d), about “significant imbalance” (which is in the same set of rules than “Sudden termination”) are OMR. However, this qualification should be limited to the specific action brought by the Ministry of Finance and not be applicable to an action by a private party. Moreover, some courts may be tempted to invoke the provisions of French law n°2023-221 (March 30, 2023, aka Egalim III) to qualify Sudden termination rule as an OMR, however this text (article L 444-1.A Commercial code) does not quote expressly OMR and set no justification whatsoever to set such a qualification.

              Consequently, if a claim for “sudden termination” is brought to a French court, there is still a  risk that the latter would exclude the applicable foreign law and replace it with the regime resulting from the “sudden termination” of Article L 442-1. II. However, to avoid this risk, a foreign company would better not only choose a foreign governing law but also stipulate that the dispute will be brought before a foreign judge or an arbitral tribunal.

              How to avoid jurisdiction of French court over a “Sudden Termination” claim?

              “Sudden Termination” claim and intra EU co-contractor

              The ECJ ruling (Granarolo, July 14, 2016, N°C196/15) created a distinction between claims occurring from:

              – written framework contract or tacit contractual relationship (existing only if the body of evidences listed by the ECJ are identified by national judges, i.e. length of relation and commitments recognized to each other, such as exclusivity, special price or terms of delivery or payment, non-competition, etc.): such claim has a contractual nature according to conflict of jurisdiction rules under Brussels I recast Regulation;

              – informal relationship which is a non–tacit contractual relationship (i.e. orders placed from time to time): such a request has a tort nature under Brussels I recast ;

              To be noted: the so-called Egalim III law has no impact on the EU rules on jurisdiction clauses.

              (a) Who is the Judge of the “sudden termination” of a written contract or of a “tacit contractual relationship”?

              – Jurisdiction clause for the benefit of a foreign court will be enforced by French courts, even though it is an asymmetrical clause (Court of cassation, October 7, 2015, Ebizcuss.com / Apple Sales International).

              – In case of lack of choice of court clause, French courts are likely to have jurisdiction if the French claimant bringing a case based on “sudden termination» is the service provider, such as distributor, agent, etc. (see ECJ Corman Collins case, 19 12 13, C-9/12, and article 7.1.b.2 of Brussels I recast°).

              (b) Who is the Judge of the “sudden termination” of a “non- tacit contractual relationship”?

              – We believe that French courts may continue to give effect to a jurisdiction clause in tort case, especially when it expressly encompasses tort litigation (Court of cassation, 1° Ch. Civ., January 18, 2017, n° 15-26105, Riviera Motors / Aston Martin Lagonda Ltd).

              – In case of lack of choice of court clause, French courts will have jurisdiction over a “sudden termination” claim as the judge of the place where the harmful event occurred (art. 7.3 of Brussels I recast), which is the place where the sudden termination has effect…i.e. in France if the French company is the victim.

              “Sudden Termination” claim and Non-EU co-contractor

              The Granarolo solution will not ipso facto apply if a French victim brings a claim to French courts, based on a “sudden termination” made by a non-EU company. In non-EU relations, French judges could continue to retain only the tort qualification. In such a case, French courts may keep their jurisdiction based on the place where the harmful event occurs.

              Jurisdiction clause to a foreign court may be recognized in France (even for tort-based claims), provided that this jurisdiction clause is valid according to either a bilateral international convention or to the Hague Convention of 30 June 2005 on choice of court agreements. Otherwise, according to Egalim III law, imperative jurisdiction might be attributable to French courts.

              “Sudden Termination” claim and arbitration

              Stipulating an ad hoc or institutional arbitration clause is probably the safest solution to avoid the jurisdiction of French courts. Ideally, the clause will fix the seat of the arbitral tribunal outside France. According to the principle of competence-competence of the arbitrators, French courts declare themselves incompetent, unless the arbitration clause is manifestly void or manifestly inapplicable, regardless of contract or tort ground (see, in particular, Paris Court of Appeal, 5 September 2019, n°17/03703). The so-called “Egalim III” law has no impact on arbitration clauses.

              Conclusion: Foreign companies should not leave open the Jurisdiction and governing Law issues. They must negotiate a safe harbour, otherwise a French victim of a termination will likely to be entitled to bring a “sudden termination” claim in front of French judges (see what happen below in Part 2)

              How to master the “Sudden Termination” French rules?

              When French law is applicable, the foreign company will face the legal regime of article L442 -1.II of the French Commercial Code sanctioning “sudden termination”. As a preliminary remark, it is important to know, above all, that the implementation of the liability for “sudden termination” is the consequence of the lack of a notice or a too short notice. Thus, this scheme does not lay down an automatic compensation rule. In other words, as soon as reasonable notice is given by the author of the termination, liability on that basis can be dismissed.

              The prerequisite for “Sudden Termination”: an established commercial relationship

              All contracts are covered by this legal regime, except for contracts whose regulations provide for a specific notice of termination, like commercial agency contracts and transport of goods by road subcontracts.

              First, there must be a relationship that can be proven by a written contract or de facto, by behaviour of the parties. Article L.442-1 II of the French Commercial Code covers all “commercial” relationships and not only “contractual ones so that such relationship may be based on a succession of tacitly renewed contracts or a regular flow of business, materialized by multiple orders. This was recently recalled by the Supreme Court (Supreme Court, February 16, 2022, n° 20-18.844)

              Second, this relationship must have an established character. There is no legal definition, but this notion has been defined year after year by case law which has established an objective criterion and a more subjective one.

              (a) The objective criterion implies a sufficiently long, regular and significant relationship between the two parties. The duration of the relationship is the most important criterion. The relationship must also be regular, that is, it must not have been interrupted (too often or too long). The relationship must ultimately be meaningful and represent a serious flow of business between the parties, in volume or value.

              (b) The subjective test focuses primarily on the legitimate belief of the victim of the rupture in the continuation of the contract / the relationship that is based on factual elements, such as investment requests, budgets over several years, etc. Conversely, it is on the basis of the finding of a lack of legitimate belief in a common future that the terminating party can prove the absence of a stable character when he has resorted, on several occasions, a call for tenders (unless it is a trick).

              Anticipating a “Sudden Termination” claim

              (a) The termination may be total or partial

              The total rupture is materialized by a complete stop of the relations, for example ending the contract, stopping the sending of orders by the purchaser or the recording of orders by the supplier.

              The Supreme Court recently recalled that a significant drop in sales with a partner must be considered as a partial rupture of the relationship (February 16, 2022, n° 20-18.844, cited above). But the most complicated situation to deal with is the so-called partial rupture that will be deduced from a modification of elements that partly impacts the relationship but does not reduce it to nothing (ex.: a price increase or decrease, a change in the terms of payment or delivery).

              (b) The termination must be subject to a reasonable written prior notice

              The notice must be notified in writing. The absence of written notice is already a breach in itself. The notification must clearly reflect the willingness of a party to sever the relationship in whole or in part, which must be clearly identified. The notification must also clearly identify the date on which the relationship will end.

              Thus, an ambiguity on the notice period (e.g if the termination of an agreement is notified, whilst offering to maintain certain prices and payment terms, in the meantime) is considered as an insufficient termination notice (French Supreme Court, January 29, 2013, n° 11-23.676).

              Parties must distinguish between the letter of formal notice for default and the subsequent notification of the breach, giving notice (if applicable). During the period of notice, parties must fully comply with all contractual conditions.

              This principle also applies to distribution contracts subject to specific French rules imposing annual or multi-year negotiation obligations. In fact, the Court of cassation has ruled that “when the conditions of the commercial relationship established between the parties are subject to annual negotiation, modifications made during the notice period which are not so substantial as to undermine its effectiveness do not constitute a brutal breach of that relationship” (Cass. com., Dec. 7, 2022, n° 19-22.538).

              However, it’s not necessary to mention the reasons why the commercial relationship is terminated is not a fault or breach of the relationship. In fact, French courts consider that “the fact that the given reason to terminate was false does not in any way present the terminating party from terminating the commercial relationship” (Versailles Court of Appeal, June 10, 1999).

              The duration of the prior notice to be respected is not defined by French law which did not pose precise rule until the reform 2019. If several criteria are stated by case law, it should be noted that the most important criterion is the duration of the relationship. Judges also take into account the share of turnover achieved by the victim, the existence or not of a territorial exclusivity, the nature of the products and the sector of activity, the importance of the investments made by the victim especially to the relationship in question, and finally the state of economic dependence. Economic dependence is defined as the impossibility for a company to have a solution that is technically and economically equivalent to the contractual relations it has established with another company. Case law considers this to be an aggravating factor justifying a longer termination notice.

              The minimum notice period must be notified at the time of notification of termination. As a consequence, events that affect the victim after the notification, both positively (conclusion of a new contract) and negatively (loss of another custome), will not be taken into account by the judge, at the time of ruling, when assessing the “brutality” of the termination.

              The length of the notice given by the judges is very variable. The appreciation of notice is made on a case-by-case basis. It is very difficult to give a golden rule, even though roughly for each year of relationship, a month’s notice might be due (to modulate up or down depending on the other criteria in the relationship). But way of illustration, however, the following case law may be cited:

              • Paris Court of Appeal , Feb.9, 2022: 16-year relationship with 15 months’ notice;
              • Paris Court of Appeal, Jan.20, 2022: 12-year relationship with 8 months’ notice;
              • Paris Court of Appeal, Oct. 25, 2022: 16-year relationship with 18 months’ notice;
              • Paris Court of Appeal , Feb. 23, 2022: 17-year relationship with 11 months’ notice;
              • Paris Court of Appeal, Sept. 21, 2022: 5-year relationship with 14 months’ notice.

              Since the Order of April 24, 2019, which limits the length of reasonable notice to a maximum of 18 months, if the notice period granted by a party is 18 months, it cannot be held liable for a sudden termination. However, much of the litigation remains uncertain, as only exceptionally long or particularly sensitive relationships led, prior to 019, to the award of more than 18 months’ notice. Ordinance of April 24, 2019, limits to 18 months the maximum period of notice reasonably due under Article L 442-1.II. But much of the litigation will remain uncertain since only relations of exceptional longevity or particularly sensitive, could have led to the allocation of a notice higher than 18 months.

              Judges are not bound by the contractual notices stipulated in the contract. But if the author of the breach also violated the terms and conditions of termination provided for by contract, the victim may seek the responsibility of the author both on the tort basis of the sudden rupture and also on the basis of the breach of a contractual obligation.

              Cases in which “Sudden Termination” is ruled out

              The legal regime provides for two cases, and the case-law seems to have imposed others.

              (a) The two legal exceptions are Force majeure (very rarely consecrated by the courts) and the fault of the victim of the termination, case-law having added that it must be a serious violation (“faute grave”) of a contractual commitment or a legal provision (such as non-respect of an exclusivity, a non-compete, a confidentiality or a change of control duty, or non-payment of amounts due contractually).

              The judges consider themselves, of course, not bound by a termination clause defining what constitutes serious misconduct. In any case the party who terminates for serious misconduct must clearly notify it in its letter of termination. Above all, serious misconduct leads to a lack of notice, therefore, if the terminating party alleges serious misconduct but grants notice, whichever it may be, judges may conclude that the fault was not serious enough.

              Thus, the seriousness of the misconduct must be motivated by judges in their rulings. Noting that the contract was breached after two formal notices is not sufficient (Cass. com., Feb 16. 2022, n° 20-18.844).

              However, the Court of Cassation considers that “even in the case of serious misconduct justifying the immediate termination of the commercial relationship, the other party remains free to give the other party a notice” (Cass. Com., Oct. 14 2020, n°18-22.119).

              (b) In recent years, case-law has added other cases of liability waiver. This is the case when the rupture is the consequence of a cause external to the author of the rupture, such as the economic crisis, the loss of its own customers or suppliers, upstream or downstream.

              For example, in 2021 the Court of cassation has ruled that “the business partner is not entitled to an unchanged relationship and cannot refuse any adaptation required by economic changes” (Com, Dec 01, 2021, n°20-19.113). In fact, to be attributable to an economic player, a termination must be free and deliberate. This is not the case if termination is imposed by the economic situation.

              However, adding a liability exemption clause in a contract, aimed at waiving destinated to escape the penalties of article L. 442-1, is without consequences on the judge’s appreciation.

              Judges have also excluded “sudden termination” in the hypothesis of the end of the first period of a fixed-term contract, whatever its duration is: the first renewal of a contract, constitutes a foreseeable event for the victim of the rupture, which excludes the very notion of brutality; but once the contract has been renewed at least once, judges can subsequently characterize the victim’s legitimate belief in a new tacit renewal.

              Compensation for “Sudden Termination”

              Judges only compensate for the detrimental consequences of the brutality itself of the breach but do not compensate, at least in the context of article L442 -1.II, for the consequences of the breach itself.

              The basic rule is very simple: it is necessary to determine the length of the notice which should have been granted, from which the notice actually granted is deducted. This net notice is multiplied by the average monthly gross margin of the victim, or more often the so called margin on variable costs (i.e. the turnover minus costs disappearing with non-performance of the contract/relation). Defendant should not hesitate to ask for the full accountancy evidences, especially to identify (lower) margin rates, or even for a judicial expertise on those accounting elements. In general, the base of the average monthly margin consists of the last 24 or 36 months.

              The compensation calculated on the average margin is, in general, exclusive of any other compensation. However, the victim can prove that it has suffered other losses as a consequence of the brutality of the rupture. Such as dismissals directly caused by this brutality or the depreciation of investments made recently by the victim.

              Some practical tips when considering to anticipate “Sudden Termination”

              Even though the legal regime is still ambiguous and the case-law terribly casuistic which prevents to release strong guidelines, here are some practical tips when a company plans to terminate a relationship / contract:

              • in the case of a fixed-term contract renewable tacitly, the notification of non-renewal must be anticipated well in advance of the beginning of the contractual notice in order to avoid being in a situation where it is necessary to choose between not renewing the contract with a notice that is not sufficient or agree to see the contract renewed itself for a new term;
              • commercial teams must be made aware of the risk of partial sudden termination when they change the conditions of execution of a commercial relationship / contract too radically;
              • in some cases, it may be useful to send a pre-notice of termination with a “notice proposal” in order to try to validate this notice with the other party;
              • it may also be useful, in certain relationships, to notify the end of the relationship with different lengths of notice depending on the nature of the product lines;
              • Finally, the best way is to conclude an end-of-relation protocol, fixing the duration of the notice as well as, if necessary, the progressive decline of the orders, the whole within the framework of a settlement agreement which definitively waives any claim, including “sudden termination”.

              Sudden termination regime shall be taken into consideration when entering into the final phase of a duration relationship: the way in which the contract (or de facto relationship) is terminated must be carefully planned, in order to manage the risk of causing damages to the counterparty and being sued for compensation.

              Given the significance of the influencer market (over €21 billion in 2023), which now encompasses all sectors, and with a view for transparency and consumer protection, France, with the law of June 9, 2023, proposed the world’s first regulation governing the activities of influencers, with the objective of defining and regulating influencer activities on social media platforms.

              However, influencers are subject to multiple obligations stemming from various sources, necessitating the utmost vigilance, both in drafting influence agreements (between influencers and agencies or between influencers and advertisers) and in the behaviour they must adopt on social media or online platforms. This vigilance is particularly heightened as existing regulations do not cover the core of influencers’ activities, especially their status and remuneration, which remain subject to legal ambiguity, posing risks to advertisers as regulatory authorities’ scrutiny intensifies.

               

              Key points to remember 

              • Influencers’ activity is subject to numerous regulations, including the law of June 9, 2023.
              • This law not only regulates the drafting of influence contracts but also the influencer’s behaviour to ensure greater transparency for consumers.
              • Every influencer whose audience includes French users is affected by the provisions of the law of June 9, 2023, even if they are not physically present in French territory.
              • Both the law of June 9, 2023, and the “Digital Services Act,” as well as the proposed law on “fast fashion,” foresee increasing accountability for various actors in the commercial influence sector, particularly influencers and online platforms.
              • Despite a plethora of regulations, the status and remuneration of influencers remain unaddressed issues that require special attention from advertisers engaging with influencers.

               

              The law of June 9, 2023, regulating influencer activity  

              The definition of influencer professions

              The law of June 9, 2023, provides two essential definitions for influencer activities:

              • Influencers are defined as ‘natural or legal persons who, for consideration, mobilize their notoriety with their audience to communicate to the public, electronically, content aimed at promoting, directly or indirectly, goods, services, or any cause, engaging in commercial influence activities electronically.’
              • The activity of an influencer agent is defined as ‘that which consists of representing, for consideration,’ the influencer or a possible agent ‘with the aim of promoting, for consideration, goods, services, or any cause‘ (article 7) The influencer agent must take ‘necessary measures to ensure the defense of the interests of the persons they represent, to avoid situations of conflict of interest, and to ensure the compliance of their activity‘ with the law of June 9, 2023.

               

              The obligations imposed on commercial messages created by the influencer

              The law sets forth obligations that influencers must adhere to regarding their publications: 

              • Mandatory particulars: When creating content, this law imposes an obligation on influencers to provide information to consumers, aiming for transparency towards their audience. Thus, influencers are required to clearly, legibly, and identifiably indicate on the influencer’s image or video, regardless of its format and throughout the entire viewing duration (according to modalities to be defined by decree):

                – The mention “advertisement” or “commercial collaboration.” Violating this obligation constitutes deceptive commercial practice punishable by two years’ imprisonment and a fine of €300,000 (Article 5 of the law of June 9, 2023).
                – The mention of “altered images” (modification by image processing methods aimed at refining or thickening the silhouette or modifying the appearance of the face) or “virtual images” (images created by artificial intelligence). Failure to do so may result in a one-year prison sentence and a fine of €4,500 (Article 5 of the law of June 9, 2023).

              • Prohibited or regulated promotions: This law reminds certain prohibitions, subject to criminal and administrative sanctions, stemming from French law on the direct or indirect promotion of certain categories of products and services, under penalty of criminal or administrative sanctions. This includes the promotion of products and services related to:

                – health: surgery, aesthetic medicine, therapeutic prescriptions, and nicotine products;
                – non-domestic animals, unless it concerns an establishment authorized to hold them;
                – financial: contracts, financial products, and services;
                – sports-related: subscriptions to sports advice or predictions;
                – crypto assets: if not from registered actors or have not received approval from the AMF;
                – gambling: their promotion prohibited for those under 18 years old and regulated by law;
                – professional training: their promotion is not prohibited but regulated.

               

              The accountability of influencer behaviour

              The law also holds influencers accountable from the contracting of their relationships and when they act as sellers:

              • Regulation of commercial influence agreements: This law imposes, subject to nullity, from a certain threshold of influencer remuneration (defined by decree), the formalization in writing of the agreement between the advertiser and the influencer, but also, if applicable, between the influencer’s agent, and the mandatory stipulation of certain clauses (remuneration, mission description, etc.).
              • Influencer responsibility as a cyber seller: Influencers engaging in drop shipping (selling products without handling their delivery, done by the supplier) must provide the buyer with all information in French as required by Article L. 221-5 of the Consumer Code about the product, such as its availability and legality (i.e., guarantee that the product is not counterfeit), applicable product warranty, and supplier identity. Additionally, influencers must ensure the proper delivery and receipt of products and, in case of default, compensate the buyer. Influencers are also logically subject to obligations regarding deceptive commercial practices (for more information, the DGCCRF website explain the dropshipping).

               

              The accountability of other actors in the commercial influence ecosystem

               

              Joint and several liability is set by law, for the advertiser, influencer, or influencer’s agent for damages caused to third parties in the execution of the commercial influence contract, allowing the victim of the damage to act against the most solvent party.

              Furthermore, the law introduces accountability for online platforms by partially incorporating the European Regulation 2022/2065 on digital services (known as the “DSA“) of October 19, 2022.

               

              French regulation and international influencers

               

              Influencers established outside the European Union (including also Switzerland and the EEA) who promote products or services to a French audience must obtain professional liability insurance from an insurer established within the EU. They must also designate a legal or natural person providing “a form of representation” (SIC) within the EU. This representative (whose regime is not very clear) is remunerated to represent the influencer before administrative and judicial authorities and to ensure the compliance of the influencer’s activity with law of June 9, 2023.

              Furthermore, according to law of June 9, 2023, when the contract binding the influencer (or their agency) aims to implement a commercial influence activity electronically “targeting in particular an audience established in French territory” (SIC), this contract should be exclusively subject to French law (including the Consumer Code, the Intellectual Property Code, and the law of June 9, 2023). According to this law, the absence of such a stipulation would be sanctioned by the nullity of the contract. Law of June 9, 2023, seems to be established as an overriding mandatory law capable of setting aside the choice of a foreign law.

              However, the legitimacy (what about compliance with the definition of overriding mandatory rules established by Regulation Rome I?) and effectiveness (what if the contract specifies a foreign law and a foreign jurisdiction?) of such a legal provision can be questioned, notably due to its vague and general wording. In fact, it should be the activity deployed by the “foreign” influencer to their community in France that should be apprehended by French overriding mandatory rules, rather than the content of the agreement concluded with the advertiser (which itself could also be foreign, by the way).

               

              The other regulations governing the activity of influencers

               

              The European regulations

              The DSA further holds influencers accountable because, in addition to the reporting mechanism imposed on platforms to report illicit content (thus identifying a failing influencer), platforms must ensure (and will therefore shift this responsibility to the influencer) the identification of commercial communications and specific transparency obligations towards consumers.

              The «soft law»

              As early as 2015, the Advertising Regulatory Authority (“ARPP”) issued recommendations on best practices for digital advertising. Similarly, in March 2023, the French Ministry of Economy published a “code of conduct” for influencers and content creators. In 2023, the European Commission launched a legal information platform for influencers. Although non-binding, these rules, in addition to existing regulations, serve as guidelines for both influencers and content creators, as well as for judicial and administrative authorities.

               

              The special status of child influencers

              The law of October 19, 2020, aimed at regulating the commercial exploitation of children’s images on online platforms, notably opens up the possibility for child influencers to be recognized as salaried workers. However, this law only targeted video-sharing platforms. Article 2 of the law of June 9, 2023, extended the provisions regarding child influencer labor introduced by the 2020 law to all online platforms. Finally, a recent law aimed at ensuring respect for the image rights of children was published on February 19, 2024, introducing a principle of joint and several responsibility of both parents in protecting the minor’s image rights.

               

              The status and remuneration of influencers: uncertainty persists

               

              Despite the diversity of regulations applicable to influencers, none address their status and remuneration.

              The status of the influencer

              In the absence of regulations governing the status of influencers, a legal ambiguity persists regarding whether the influencer should be considered an independent contractor, an employee (as is partly the case for models or artists), or even as a brand representative (i.e. commercial agent), depending on the missions contractually entrusted to the influencer.

              The nature of the contract and the applicable social security regime stem from the missions assigned to the influencer:

              • In the case of an employment contract, the influencer will fall under the general regime for employees and assimilated persons, based on Articles L. 311-2 or 311-3 of the French Social Security Code.
              • In the case of a service contract, the influencer will fall under the regime for self-employed workers.

               

              The existence of a relationship of subordination between the advertiser and the influencer typically determines the qualification of an employment contract. Subordination is generally characterized when the employer gives orders and directives, has the power to control and sanction, and the influencer follows these directives. However, some activities are subject to a presumption of an employment contract; this is the case (at least in part) for artist contracts under Article L. 7121-3 of the French Labor Code and model contracts under Article L. 7123-2 of the French Labor Code.

               

              The remuneration of the influencer

              The influencer can be remunerated in cash (fixed or proportional) and/or in kind (for example: receiving a product from the brand, invitations to private or public events, coverage of travel expenses, etc.). The influencer’s remuneration must be specified in the influencer agreement and is directly impacted by the influencer’s status, as certain obligations (minimum wage, payment of social security contributions, etc.) apply in the case of an employment contract.

              Furthermore, the remuneration (for the influencer’s services) must be distinguished from that of the transfer of their copyrights or image rights, which are subject to separate remuneration in exchange for the IP rights transferred.

               

              The influencers… in the spotlight

              The law of June 9, 2023, grants the French authority (i.e. the Consumer Affairs, Competition and Fraud Prevention Agency, “DGCCRF”) new injunction powers (with reinforced penalties). This comes in addition to the recent creation of a “commercial influence squad“, within the DGCCRF, tasked with monitoring social networks, and responding to reports received through Signal Conso. The law provides for fines and the possibility of blocking content.

              As early as August 2023, the DGCCRF issued warnings to several influencers to comply with the new regulations on commercial influence and imposed on them the obligation to publicly disclose their conviction for non-compliance with the new provisions regarding transparency to consumers on their own social networks, a heavy penalty for actors whose activity relies on their popularity (DGCCRF investigation on the commercial practices of influencers).

              On February 14, 2024, the European Commission and the national consumer protection authorities of 22 EU member states, Norway, and Iceland published the results of an analysis conducted on 570 influencers (the so-called “clean-up operation” of 2023 on influencers): only one in five influencers consistently presented their commercial content as advertising. 

              In response to environmental, ethical, and quality concerns related to “fast fashion,” a draft law aiming to ban advertising for fast fashion brands, including advertising done by influencers (Proposal for a law aiming to reduce the environmental impact of the textile industry), was adopted by the National Assembly on first reading on March 14, 2024.

              Lastly, the law of June 9, 2023, has been criticized by the European Commission, which considers that the law would contravene certain principles provided by EU law, notably the principle of “country of origin,” according to which the company providing a service in other EU countries is exclusively subject to the law of its country of establishment (principle initially provided for by the E-commerce Directive of June 8, 2000, and included in the DSA). Some of its provisions, particularly those concerning the application of French law to foreign influencers, could therefore be subject to forthcoming – and welcome – modifications.

              Summary

              To avoid disputes with important suppliers, it is advisable to plan purchases over the medium and long term and not operate solely on the basis of orders and order confirmations. Planning makes it possible to agree on the duration of the ‘supply agreement, minimum volumes of products to be delivered and delivery schedules, prices, and the conditions under which prices can be varied over time.
              The use of a framework purchase agreement can help avoid future uncertainties and allows various options to be used to manage commodity price fluctuations depending on the type of products , such as automatic price indexing or agreement to renegotiate in the event of commodity fluctuations beyond a certain set tolerance period.

              I read in a press release: “These days, the glass industry is sending wine companies new unilateral contract amendments with price changes of 20%…”

              What can one do to avoid the imposition of price increases by suppliers? 

              • Know your rights and act in an informed manner
              • Plan and organise your supply chain

              Does my supplier have the right to increase prices?

              If contracts have already been concluded, e.g., orders have already been confirmed by the supplier, the answer is often no.

              It is not legitimate to request a price change. It is much less legitimate to communicate it unilaterally, with the threat of cancelling the order or not delivering the goods if the request is not granted.

              What if he tells me it is force majeure?

              That’s wrong: increased costs are not a force majeure but rather an unforeseen excessive onerousness, which hardly happens.

              What if the supplier canceled the order, unilaterally increased the price, or did not deliver the goods?

              He would be in breach of contract and liable to pay damages for violating his contractual obligations.

              How can one avoid a tug-of-war with suppliers?

              The tools are there. You have to know them and use them.

              It is necessary to plan purchases in the medium term, agreeing with suppliers on a schedule in which are set out:

              • the quantities of products to be ordered
              • the delivery terms
              • the durationof the agreement
              • the pricesof the products or raw materials
              • the conditions under which prices can be varied

              There is a very effective instrument to do so: a framework purchase agreement.

              Using a framework purchase agreement, the parties negotiate the above elements, which will be valid for the agreed period.

              Once the agreement is concluded, product orders will follow, governed by the framework agreement, without the need to renegotiate the content of individual deliveries each time.

              For an in-depth discussion of this contract, see this article.

              • “Yes, but my suppliers will never sign it!”

              Why not? Ask them to explain the reason.

              This type of agreement is in the interest of both parties. It allows planning future orders and grants certainty as to whether, when, and how much the parties can change the price.

              In contrast, acting without written agreements forces the parties to operate in an environment of uncertainty. Suppliers can request price increases from one day to the next and refuse supply if the changes are not accepted.

              How are price changes for future supplies regulated?

              Depending on the type of products or services and the raw materials or energy relevant in determining the final price, there are several possibilities.

              • The first option is to index the price automatically. E.g., if the cost of a barrel of Brent oil increases/decreases by 10%, the party concerned is entitled to request a corresponding adjustment of the product’s price in all orders placed as of the following week.
              • An alternative is to provide for a price renegotiation in the event of a fluctuation of the reference commodity. E.g., suppose the LME Aluminium index of the London Stock Exchange increases above a certain threshold. In that case, the interested party may request a price renegotiationfor orders in the period following the increase.

              What if the parties do not agree on new prices?

              It is possible to terminate the contract or refer the price determination to a third party, who would act as arbitrator and set the new prices for future orders.

              Roberto Luzi Crivellini

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                The Supply Framework Agreement

                20 de Março, 2023

                • Contratos
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                How real estate tokenisation works, what is the regulatory framework, and what rights investors actually acquire?

                Real estate tokenisation, already present in Spain for several years, is no longer a futuristic promise but a tangible reality in the Spanish market. It represents more than just a technological innovation: it signifies a profound transformation in how we understand ownership, investment, and liquidity within the real estate sector — one of the most traditional and tightly regulated areas of our economy.

                What is real estate tokenisation and how does it work?

                In essence, to tokenise a property today means converting the economic rights associated with that asset into digital units that can circulate on blockchain-based platforms. Each token represents a fraction of those economic rights, allowing investors with more modest capital to access a market that has traditionally required substantial investments.

                The role of smart contracts

                Tokens operate through smart contracts that automatically execute the distribution of rental income or resale proceeds of that partial representation of the property, including any potential difference in value, eliminating intermediaries and providing transparency to the process. This automation is not merely cosmetic: it reduces operational costs, speeds up transactions, and potentially increases the liquidity of assets that have historically been among the least liquid in the market.

                The legal reality: what is actually tokenised in Spain

                It is essential to clarify from the outset a key point often blurred by marketing discourse: in practice, real estate tokenisation projects in Spain do not tokenise the property itself but rather the economic rights linked to a corporate vehicle (usually a special purpose vehicle, or SPV) that owns the property. Spanish law only allows the tokenisation of shares in joint-stock companies (sociedades anónimas) using distributed ledger technology; shares in limited liability companies (sociedades limitadas) cannot be tokenised. This means that if the SPV is a limited liability company, its shares cannot be directly tokenised — only other instruments such as participative loans or credit rights over income streams can be represented as tokens. Only if the SPV is incorporated as a joint-stock company is it legally possible to tokenise its shares.

                What rights does a real estate token investor actually acquire?

                An investor who acquires a token does not become a direct co-owner of the property. Depending on the structure chosen, they may become a shareholder in a tokenised joint-stock company that owns the property or a holder of economic rights derived from participative loans or other indirect forms of economic participation issued by the SPV that owns the asset. The distinction is crucial: if the company faces solvency issues or bankruptcy, the value of the token collapses with it, and the investor cannot exercise any direct real rights over the property.

                Spanish law, rooted in centuries of land registry tradition, does not currently allow the transfer of real property rights through the mere transfer of tokens; a public deed and registration are required for the transfer to be effective against third parties. The SPV structure is therefore a compromise between technological possibilities and the demands of the current legal framework.

                Regulatory framework for real estate tokenisation in Spain

                CNMV authorisation and the 2023 Securities Market Law

                The Spanish regulator has begun to establish a legal foundation for this technology to develop within a secure framework. In 2023, the Spanish National Securities Market Commission (CNMV) authorised Adventurees Capital PFP as the first crowdfunding platform to issue tokenised securities — a milestone in the convergence of crowdfunding and blockchain. This authorisation was accompanied by the approval of Law 6/2023 on the Securities Market, which expressly recognises the representation of transferable securities through distributed ledger technologies such as blockchain, granting them full legal validity.

                The role of the Land Registry in the blockchain era

                In parallel, the Spanish Association of Land Registrars is exploring how to integrate blockchain technology into the registry system, although it is important to clarify the real scope of these initiatives. Current projects focus mainly on complementary applications such as digital management of the Building Book or improved traceability and accessibility of registry information. They do not aim to replace the fundamental pillars of the system: execution of public deeds before a notary and registration of ownership, which remain absolutely mandatory for the transfer of real rights over property. Registrars are firm in their institutional stance: blockchain can complement and streamline document management, but it cannot replace the legal control exercised by the registrar or the protection of third parties offered by the Land Registry — both essential components of the Spanish legal system. This position reflects the current limitation of the model: tokens circulate on the blockchain representing positions in SPVs or economic rights over them, but the actual ownership of the property remains anchored in the traditional registry system, held by the corporate vehicle, and any transfer of that ownership must still follow the conventional legal process with all its guarantees.

                European regulation: ECSPR, MiCA and the DLT Pilot Regime

                Spain also benefits from a European regulatory framework that is positioning the EU as a global leader in digital asset regulation. The European Crowdfunding Service Providers Regulation (ECSPR) harmonises the rules for crowdfunding platforms, allowing an authorised platform in one Member State to operate across the EU through the so-called “European passport”. The MiCA Regulation, which came fully into force on 30 December 2024, broadly regulates crypto-asset markets, setting obligations for both issuers and service providers. The DLT Pilot Regime (EU Regulation 2022/858) allows market infrastructures based on distributed ledger technology to operate under certain temporary exemptions, creating a controlled testing environment to assess the potential of these technologies in financial markets.

                The Spanish regulator’s approach could be described as cautiously supportive: innovation is encouraged, but strict compliance with anti-money laundering, customer identification, and disclosure obligations is required to protect investors. This is not technological laissez-faire, but rather an effort to integrate innovation within a solid framework of legal guarantees.

                Legal challenges and risks of real estate tokenisation

                The risks of the SPV structure

                The legal challenges that remain are significant and deserve attention. The SPV structure, while legally viable, introduces an additional layer of complexity and risk that must be clearly communicated to investors. Unlike direct ownership — where the investor holds real rights over the property enforceable against third parties — in the current tokenised model, investors hold positions in indirect forms of economic participation (shares, participative loans, credit rights) linked to the company that owns the property. This has important implications for corporate liability, taxation, and insolvency protection.

                The disconnect between the on-chain and off-chain worlds

                It is also essential to understand that the connection between the “on-chain” world (where tokens circulate) and the “off-chain” world (where property rights are recorded) is neither direct nor automatic. Transferring a token does not in itself alter the Land Registry: ownership of the property remains with the SPV regardless of who holds the tokens, and only a duly notarised and registered deed can change that ownership. The exploratory projects of the Land Registrars aim to improve efficiency in information management but do not alter this fundamental principle. As in any emerging market, it is essential to prevent fraudulent schemes that promise unrealistic returns or market tokens without proper legal backing.

                Practical implications for investors and legal practitioners

                For legal practitioners, real estate tokenisation may require adapting contracts, corporate bylaws, and financing structures to an environment where rights circulate digitally and in a decentralised manner. For investors, it offers an opportunity to diversify portfolios with smaller capital contributions and greater liquidity potential than traditional real estate investment, provided they understand that they are not acquiring direct ownership of the property but rather a financial position linked to the corporate structure that owns it. And for the wider economy, it could invigorate a real estate market worth trillions of euros by facilitating the entry of retail capital previously excluded from such investments.

                The future of real estate tokenisation in Spain

                This is an evolution that combines law, technology, and finance in an inseparable way. It is essential to understand that tokenisation is not a passing trend but a tool that, when properly used and regulated, can transform access to one of society’s most valuable assets — property. However, this transformation currently operates through intermediate corporate structures and indirect forms of economic participation, not through direct ownership as commercial language sometimes suggests. It certainly does not imply an immediate revolution of Spain’s land registration system, whose fundamental guarantees remain intact.

                It is quite common for business relationships with agents or distributors to last for years without any signed documents. And be careful, because we know that a contract can exist even verbally.

                The absence of a written contract will add difficulties in the event of a possible claim, so what you do between the decision to terminate, and the moment of the claim is very important. Remember: ‘anything you write will be used against you’.

                The decision to terminate a business relationship is a very delicate moment to which, for some reason, solicitors are not invited. Here are some examples (all real) in which companies or employees with the best of intentions wrote to the agent/distributor. All of them were subsequently very damaging to the company:

                Saying ‘We are terminating our business relationship’ when the strategy will be to argue that no such business relationship exists, but rather that there are separate and linked contracts (e.g., supply rather than ongoing distribution contract; very significant compensation consequences).

                ‘You no longer represent our company’, which may be evidence that you did so before.

                ‘As of day X, you may no longer act on behalf of our company,’ which would prove that you were previously able to act on its behalf.

                ‘You may not attend the X trade fair on our behalf.’ A way of confirming that the agent/distributor’s responsibilities included participating in trade fairs and probably accrediting the customers obtained.

                ‘The sales you promoted have been significantly reduced in year N.’ When there is no written contract or other form of documentation, imputing a breach of an obligation that is not clear can be counterproductive.

                Saying ‘You are not actively promoting our products’ and then adding: ‘We urge you to stop promoting the sale of our products’.

                ‘You are no longer our exclusive representative’, which proves a type of relationship (representation/agent) and a tacit or express agreement (‘exclusivity’).

                ‘We have appointed another representative in your area’, which shows that the agent/distributor had an assigned area and was “representing”.

                ‘From this moment on, orders will be handled by X’, which also confirms a type of relationship.

                 

                In summary: from the moment the company considers terminating a commercial relationship, especially when it is not in writing and before sending any letter, it is advisable to think carefully about the strategy in case of a possible claim. This is the best time to seek advice and avoid surprises. Any communication that is not in line with this strategy designed from the outset can only lead to confusion and problems.

                Since the General Data Protection Regulation (GDPR) took effect in 2018, the European Union (EU) has granted adequacy status to only a limited number of jurisdictions — those whose data protection regimes are deemed to provide an “essentially equivalent” level of protection to that of the EU. The current list includes Andorra, Argentina, Canada (under PIPEDA), Faroe Islands, Guernsey, Isle of Man, Israel, Japan, Jersey, New Zealand, South Korea, Switzerland, Uruguay, the United Kingdom, and the United States (limited to companies certified under the Data Privacy Framework).

                As of 5 September 2025, Brazil is on the verge of joining this exclusive group. The European Commission has issued a draft adequacy decision concluding that the Brazilian General Data Protection Law (Lei Geral de Proteção de Dados Pessoais – LGPD), in conjunction with Brazil’s broader legal and constitutional framework, offers protections that are essentially equivalent to those found in the GDPR. While Brazil’s rules offer somewhat more flexibility in specific areas of data processing, the foundational principles and safeguards are well-aligned with EU standards.

                Once finalized, the adequacy decision will authorize the free flow of personal data from the EU to Brazil without the need for additional contractual clauses or technical safeguards. Such a development is not just regulatory — it also answers a core political argument made by LGPD advocates since its inception: that the absence of a comprehensive data protection framework was undermining Brazil’s international competitiveness by limiting data flows and discouraging investment. For businesses, the EU decision may finally mean the removal of a significant layer of compliance complexity — a development especially welcome by small and medium-sized enterprises engaged in cross-border trade or service provision. The draft is currently under review by the European Data Protection Board (EDPB) and the Member States of the EU.

                The Commission’s assessment highlights several key aspects of Brazil’s data protection landscape. It begins by noting that the Brazilian Constitution expressly guarantees the right to privacy and the protection of personal data — a notable distinction among non-EU jurisdictions. These protections are further supported by Brazil’s ratification of the American Convention on Human Rights and its recognition of the jurisdiction of the Inter-American Court of Human Rights, reinforcing a commitment to fundamental rights and democratic oversight.

                The LGPD mirrors the GDPR in many critical respects and defines its territorial scope clearly. It applies to: (i) data processing carried out within Brazilian territory, (ii) the offering of goods or services to individuals in Brazil, and (iii) data collected in Brazil, even if subsequently processed abroad. This aligns well with the extraterritorial provisions of the GDPR. The definitions of personal data, sensitive data, controller, and processor are materially similar, as are the key principles governing processing — including lawfulness, purpose limitation, data minimization, accuracy, transparency, and security. The law expressly excludes anonymized data from its scope and establishes specific exemptions for journalistic activities, public security, and scientific research.

                Another strength is Brazil’s institutional framework. The National Data Protection Authority (ANPD) was recently transformed into an autonomous regulatory agency, enhancing its independence and technical capacity. The ANPD holds both regulatory and enforcement powers: it can issue binding regulations, impose administrative sanctions, and publish authoritative guidance. To date, it has issued key guidelines on topics such as consent, legitimate interest, the role of the Data Protection Officer (DPO), and security incident reporting. Internationally, the ANPD is an active participant in global data protection dialogue — it is a member of the Global Privacy Assembly and an official observer to the Council of Europe’s Convention 108.

                The LGPD’s approach to international data transfers is also structurally aligned with the GDPR. It requires appropriate safeguards such as standard contractual clauses, allows for future adequacy decisions under a regime comparable to Article 45 of the GDPR, and includes detailed provisions for onward transfers and transit data — that is, data merely passing through Brazil without further processing. The rights of data subjects are robust and familiar to European practitioners: access, rectification, erasure, portability, and withdrawal of consent are guaranteed. Lawful bases for processing are also aligned — including consent, legal obligations, contract execution, and legitimate interest. Notably, the LGPD requires a documented balancing test when relying on legitimate interest, bringing additional accountability to this flexible legal basis.

                Security incidents involving personal data must be notified to both the ANPD and affected data subjects when there is a significant risk of harm. The standard notification deadline is 72 hours, and the required content aligns closely with Articles 33 and 34 of the GDPR. The ANPD may also order public disclosure of incidents or require remedial measures, depending on the nature and scope of the breach.

                Importantly, this process is not one-sided. In parallel to the European Commission’s adequacy decision, the ANPD is conducting its own adequacy assessment of the EU and EEA data protection frameworks. This process is regulated by the Brazilian Resolution CD/ANPD No. 19/2024, which governs international data transfers. Once the technical and legal evaluation is complete, the ANPD’s Board of Directors will issue a formal decision. This reciprocal move reflects Brazil’s commitment to mutual recognition and regulatory symmetry — a positive signal for companies on both sides of the Atlantic.

                In conclusion: If confirmed, Brazil’s adequacy status will simplify international operations, reduce compliance costs, and expand opportunities for data-driven business and legal cooperation. For European lawyers advising SMEs with interests in Latin America, this development is a strategic signal: Brazil is emerging not just as a growing market, but as a legally compatible and data-safe jurisdiction for international partnerships.

                Remember the USA – EU agreement on 15% tariffs? I wrote that with a negotiator like Trump the game is never over (article here) and—after the recent interlude featuring a threat of 100% tariffs on pharmaceuticals—the U.S. government has announced the imposition of an overall 107% duty on Italian pasta, which could take effect on January 1, 2026.

                Where this new duty comes from

                The antidumping investigation was launched by the U.S. Department of Commerce at the request of certain competing American companies and is based on a 1996 antidumping order that allows for periodic reviews of imports of Italian pasta. The Department of Commerce conducts these checks annually to assess whether Italian producers are selling pasta at prices lower than the U.S. domestic market, a practice known as “dumping.”

                Companies involved in the investigation

                The Department of Commerce selected two sample companies for in-depth analysis, defined as “mandatory respondents”: La Molisana and Pastificio Lucio Garofalo. According to the official document published by the U.S. administration, for the period from July 1, 2023 to June 30, 2024, both companies allegedly sold their products below market prices, resulting in the imposition of a duty of 91.74%.

                U.S. authorities justified this percentage by claiming the two companies did not provide complete or compliant information as requested by the Department and were therefore insufficiently cooperative during the investigation. What is very important is that, in addition to the two companies directly examined, the additional 91.74% duty is also applied to numerous other Italian producers not individually reviewed. This methodology, while formally permitted under U.S. law as an exception, is being applied without any direct verification of the other companies.

                Next steps in the procedure

                Italy’s Ministry of Foreign Affairs moved immediately, formally intervening in the proceeding as an “interested party” through the Italian Embassy in Washington. The Foreign Ministry is working in close coordination with the companies concerned and, in concert with the European Commission, to persuade the U.S. Department to revise the provisional duties.

                The two companies involved (La Molisana and Garofalo) can submit documentation to contest the dumping allegations. However, if dumping is confirmed, the Department of Commerce will instruct Customs to apply antidumping duties on goods sold and entered into U.S. commerce.

                The preliminary nature of this determination means there is still room to change the decision before it becomes final.

                Possible effective date

                The new super-duty of 91.74%, which will be added to the existing 15% tariff for a total of 107%, is scheduled to take effect on January 1, 2026. This date therefore represents a crucial deadline for all ongoing diplomatic and legal actions.

                If confirmed, the economic impact would be significant: in 2024, Italian pasta exports to the United States reached a value of €671 million according to Coldiretti, accounting for nearly 17% of the sector’s total exports. A 107% duty would risk seriously undermining competitiveness in one of the most important markets for Italian agri-food products.

                 What to do between now and January 1, 2026?

                At this stage, the entry into force of the new duty depends on the outcome of the ongoing procedure: given what has happened in recent months, and the political use the U.S. administration has made of tariffs—well beyond their technical function—it is reasonable to be pessimistic.

                So, what to do? In recent months we have seen companies react to the uncertainty over the fate of the tariffs in three ways:

                • Some rushed to ship as many products as possible before the potential effective date of the duty;
                • Some granted—upfront—discounts equivalent to the threatened duty, in case it came into force;
                • Some suspended orders, pending definitive news on the impact of the duties.

                These are all  valid options, but other effective tools for managing the uncertainty caused by the flurry of announcements, negotiations, and threats from the U.S. administration should not be forgotten: the risk of new duties being introduced, or existing ones being increased, can be managed in the contract by agreeing with the U.S. importer how any tariff change will affect the product.

                The parties can stipulate, for example, that the increase will be split equally; or that the importer will bear it beyond a certain threshold; or that if the duty exceeds a certain level, the contracts may be terminated. You can find a deeper dive in this article.

                The only certainty is that trade relations with the U.S. will stay unpredictable for a long time, and it’s vital to carefully manage the risk factors involved in selling products there. Right now, the focus is on tariffs and prices, and I encourage you to take this chance to thoroughly review existing agreements and assess whether—and how—other important points are addressed that could entail significant liabilities: we discuss them, very practically, in this book.

                A dedicated notary account in Brazil is a legal mechanism that brings greater security, transparency, and reliability to financial transactions. Regulated under Law 8.935/1994 and Provision No. 197/2025, this service allows notaries to receive, manage, and release funds only after contractual conditions have been fulfilled. By ensuring segregation of assets, traceability, and impartial oversight, dedicated notary accounts provide an effective escrow-like solution for real estate deals, mergers and acquisitions, import/export operations, high-value asset purchases, and complex commercial contracts. This tool not only reduces legal risks and potential disputes but also strengthens trust between parties by guaranteeing that payments are safeguarded until obligations are met.

                The legal basis can be found in Law 8.935/1994, § 1 of art. 7-A, which allows notaries to receive, deposit, and manage amounts related to legal transactions, with transactions subject to objectively verifiable facts/conditions. Provision No. 197, dated June 13, 2025, regulates, at the national level, the service of notarial accounts linked to Notary Public Offices.

                Practical applications: among others, in the following transactions:

                • Real estate: guarantee that the down payment and settlement amounts will be secured in a specific account. This mitigates the risk of misappropriation of funds and ensures that the money will be released only after all contractual conditions have been met.
                • M&A: the linked notarial account creates a standardized escrow mechanism for the payment of price/holdbacks/earn-outs and conditional obligations.
                • Purchase and Sale of High-Value Movable Property: the linked account can be used to guarantee payment. The buyer deposits the amount and the seller knows that the money is safe, being released only after the transfer of ownership and delivery of the goods.
                • Import and Export: the transaction amount can be deposited with the notary and released to the exporter only after confirmation of delivery of the goods in the destination country, for example.
                • Guarantee of Obligations: In any contract that provides for the payment of a sum of money as a guarantee, the notary account can be used to provide greater security to the parties.
                • Supply, EPC/turnkey, and construction contracts: performance retentions, milestone acceptance (commissioning, as-built, issuance of ART/CREA), and payment against formal acceptance.
                • Contractual joint ventures and commercial partnerships: advances conditional on licenses, authorizations, or competitive approval, where applicable.

                Reduction of Legal Risks: The use of linked accounts reduces the chances of litigation related to lack of clarity about the origin and destination of funds. Companies can clearly demonstrate that payments were made and held by an impartial and secure institution.

                Operational structure: limited to banking entities affiliated with the CNB, which must ensure the segregation of assets, traceability through audit trails, and proof of all transactions. The authorization of the delegate requires prior accreditation and electronic registration of the essential details of the transaction and its conditions in the CNB system, with access restricted to the parties and the notary.

                Specific Purpose: amounts received as payment, guarantee, or advance payment as a result of notarial acts must be deposited in a bank account linked to the specific act and may only be moved for the purpose for which they are intended.

                Transparency and Traceability: With the linked notarial account, it is possible to clearly track the financial flow of each transaction, which increases transparency for all parties and for supervisory bodies.

                Verification of conditions and release. Once the objective conditions have been met, the notary authorizes the transfer to the recipients and files the proof of verification. In the event of a dispute between the parties, the notary suspends any movement, draws up a notarial deed, and advises on a consensual or judicial solution, without deciding on the effectiveness/termination of the transaction; if the transaction is frustrated and no solution is found, the procedure is terminated and the amounts are returned to the depositor, in accordance with the agreed clauses.

                Confidentiality and access. In transactions with a confidentiality clause, the notary public maintains confidentiality and does not issue certificates regarding the content of the transaction; documents are accessible only for correctional purposes or by court order.

                Remuneration and costs. The notary’s remuneration for the notarial account service is paid by the financial institution under the terms of the agreement, and the transfer of additional costs to the user is prohibited, without prejudice to fees for any related notarial acts.

                Article 442-1.II of the French Commercial Code (former Article L. 442-6.I.5 °) sanctions the termination by a trader of a written contract or an informal business relationship without giving sufficient written prior notice. Over the last twenty years, this article became the recurring legal basis for all compensation actions (up to 18 months of gross margin, plus other damages) when a commercial relationship or a contract ends (totally or even partially).

                Therefore, a foreign trader who contracts with a French company should try not to fall under the aegis of this rule (part I) and, if it cannot, should understand and control its implementation (part II).

                In a nutshell:

                How can a foreign company avoid or control the risk linked to the “sudden termination of commercial relations” set by French law? Foreign companies doing business with a French counterpart should:

                • enter, as soon as possible, into a written (frame) agreement with their French suppliers or customers, even for a very simple relation and;
                • stipulate a clause in favour of foreign court or arbitration and foreign applicable law while, failing to choose it, they would rather be subject to French courts and laws;

                How can a foreign company master the risk linked to the “sudden termination of commercial relations” set by French law? Foreign companies doing business with a French counterpart should:

                • know that this article applies to almost all type of commercial relationship or contracts, whether written or not, fixed-term or not;
                • check whether its relation/contract is sufficiently long, regular and significant and whether the other party has a legitimate belief in the continuation of this relation/contract;
                • give a written notice of termination or non-renewal (or even of a major modification), which length takes mainly into account the duration of the relation, irrespectively of the length of the contractual notice;
                • invoke, with cautiousness, force majeure and gross negligence of the party, to set aside “sudden termination”;
                • anticipate, in case of insufficient notice, a compensation which amount is the product of the average monthly gross margin per the length of non-granted prior notice.

                How to avoid the application of the French “Sudden Termination” rule?

                In international matters, a foreign company must anticipate whether its relationship will be subject or not to French law before terminating a contract or a business relationship and, in case of dispute, whether it will be brought before a French court or not.

                What will be the law applicable to “Sudden Termination”?

                It is quite difficult for a foreign company to correctly grasp the French legal framework of conflict of laws rules applicable to “sudden termination”. In a ruling of September 19, 2018 (RG 16/05579, DES/ Clarins), the Court of appeal of Paris made, by an implicit reference to the Granarolo EU ruling (07 14 16, N°C196/15) an extension of the contractual qualification to most of the business relationships which will improve foreseeability in order for a foreign company to try to exclude French law and its “sudden termination” rule.

                Sudden termination of a written contract or of a “tacit contractual relationship”

                According to Rome I Regulation (EC No 593/2008, June 17 2008) on the law applicable to contracts:

                – In case of choice of a foreign law by the parties: The clause selecting a foreign applicable law will be valid and respected by French judges (subject to OMR, see below), provided that the choice of law by the parties is express or certain.

                – In case of no choice by the parties: French law will likely to be declared applicable as it might be either the law of the country where is based the distributor/franchisee, etc. or the law of the country where the party who is to provide the service features of the contract has its domicile.

                Sudden termination of a “non-tacit contractual relationship”

                In case of informal relationship (i.e. orders placed from time to time), French judges would retain the tort qualification and will refer to the Rome II Regulation (No 864/2007, July 11 2007) on the law applicable to non-contractual obligations..

                – In case of choice of a foreign law by the parties: a properly drafted choice of foreign law clause should be implemented by a French judge, provided that it expressly includes tort cases.

                – In case of no choice of law by the parties: French law will likely to be declared applicable as it might be the law of the country where the damage occurs (regardless of the place of the causing event or that of the indirect consequences), which is the place of the head office where the French victim suffers the consequences of the termination.

                “Sudden Termination” rule, a French Overriding Mandatory Rule?

                The position of French courts is quite vague and unsatisfactory, and this has been the case for a long time. To make it short: the Commercial Court of Paris judges that “sudden termination” is not an OMR, the Court of appeal of Paris (sole French appellate court in charge of “sudden termination” cases) is also not in favour of the OMR qualification on the grounds that the text “protects purely private economic interests” (CA Paris, pôle 5, ch. 5, Feb 28. 2019, n° 17/16475 / CA Paris, pôle 5, ch. 5, Oct 8. 2020, n°17/19893). Recently, the Paris Court of Appeal reaffirmed that the rules on sudden termination of established commercial relations are not an OMR (Court of appeal Paris, March 11, 2021, n° 18/03112).

                The French Supreme Court has never explicitly addressed the issue (OMR or not OMR). Indeed, the French Supreme Court ruled in the Expedia case (Cass. com., July 8, 2020, n°17-31.536) that the provisions of the former article L. 442-6, I, 2º and II, d), about “significant imbalance” (which is in the same set of rules than “Sudden termination”) are OMR. However, this qualification should be limited to the specific action brought by the Ministry of Finance and not be applicable to an action by a private party. Moreover, some courts may be tempted to invoke the provisions of French law n°2023-221 (March 30, 2023, aka Egalim III) to qualify Sudden termination rule as an OMR, however this text (article L 444-1.A Commercial code) does not quote expressly OMR and set no justification whatsoever to set such a qualification.

                Consequently, if a claim for “sudden termination” is brought to a French court, there is still a  risk that the latter would exclude the applicable foreign law and replace it with the regime resulting from the “sudden termination” of Article L 442-1. II. However, to avoid this risk, a foreign company would better not only choose a foreign governing law but also stipulate that the dispute will be brought before a foreign judge or an arbitral tribunal.

                How to avoid jurisdiction of French court over a “Sudden Termination” claim?

                “Sudden Termination” claim and intra EU co-contractor

                The ECJ ruling (Granarolo, July 14, 2016, N°C196/15) created a distinction between claims occurring from:

                – written framework contract or tacit contractual relationship (existing only if the body of evidences listed by the ECJ are identified by national judges, i.e. length of relation and commitments recognized to each other, such as exclusivity, special price or terms of delivery or payment, non-competition, etc.): such claim has a contractual nature according to conflict of jurisdiction rules under Brussels I recast Regulation;

                – informal relationship which is a non–tacit contractual relationship (i.e. orders placed from time to time): such a request has a tort nature under Brussels I recast ;

                To be noted: the so-called Egalim III law has no impact on the EU rules on jurisdiction clauses.

                (a) Who is the Judge of the “sudden termination” of a written contract or of a “tacit contractual relationship”?

                – Jurisdiction clause for the benefit of a foreign court will be enforced by French courts, even though it is an asymmetrical clause (Court of cassation, October 7, 2015, Ebizcuss.com / Apple Sales International).

                – In case of lack of choice of court clause, French courts are likely to have jurisdiction if the French claimant bringing a case based on “sudden termination» is the service provider, such as distributor, agent, etc. (see ECJ Corman Collins case, 19 12 13, C-9/12, and article 7.1.b.2 of Brussels I recast°).

                (b) Who is the Judge of the “sudden termination” of a “non- tacit contractual relationship”?

                – We believe that French courts may continue to give effect to a jurisdiction clause in tort case, especially when it expressly encompasses tort litigation (Court of cassation, 1° Ch. Civ., January 18, 2017, n° 15-26105, Riviera Motors / Aston Martin Lagonda Ltd).

                – In case of lack of choice of court clause, French courts will have jurisdiction over a “sudden termination” claim as the judge of the place where the harmful event occurred (art. 7.3 of Brussels I recast), which is the place where the sudden termination has effect…i.e. in France if the French company is the victim.

                “Sudden Termination” claim and Non-EU co-contractor

                The Granarolo solution will not ipso facto apply if a French victim brings a claim to French courts, based on a “sudden termination” made by a non-EU company. In non-EU relations, French judges could continue to retain only the tort qualification. In such a case, French courts may keep their jurisdiction based on the place where the harmful event occurs.

                Jurisdiction clause to a foreign court may be recognized in France (even for tort-based claims), provided that this jurisdiction clause is valid according to either a bilateral international convention or to the Hague Convention of 30 June 2005 on choice of court agreements. Otherwise, according to Egalim III law, imperative jurisdiction might be attributable to French courts.

                “Sudden Termination” claim and arbitration

                Stipulating an ad hoc or institutional arbitration clause is probably the safest solution to avoid the jurisdiction of French courts. Ideally, the clause will fix the seat of the arbitral tribunal outside France. According to the principle of competence-competence of the arbitrators, French courts declare themselves incompetent, unless the arbitration clause is manifestly void or manifestly inapplicable, regardless of contract or tort ground (see, in particular, Paris Court of Appeal, 5 September 2019, n°17/03703). The so-called “Egalim III” law has no impact on arbitration clauses.

                Conclusion: Foreign companies should not leave open the Jurisdiction and governing Law issues. They must negotiate a safe harbour, otherwise a French victim of a termination will likely to be entitled to bring a “sudden termination” claim in front of French judges (see what happen below in Part 2)

                How to master the “Sudden Termination” French rules?

                When French law is applicable, the foreign company will face the legal regime of article L442 -1.II of the French Commercial Code sanctioning “sudden termination”. As a preliminary remark, it is important to know, above all, that the implementation of the liability for “sudden termination” is the consequence of the lack of a notice or a too short notice. Thus, this scheme does not lay down an automatic compensation rule. In other words, as soon as reasonable notice is given by the author of the termination, liability on that basis can be dismissed.

                The prerequisite for “Sudden Termination”: an established commercial relationship

                All contracts are covered by this legal regime, except for contracts whose regulations provide for a specific notice of termination, like commercial agency contracts and transport of goods by road subcontracts.

                First, there must be a relationship that can be proven by a written contract or de facto, by behaviour of the parties. Article L.442-1 II of the French Commercial Code covers all “commercial” relationships and not only “contractual ones so that such relationship may be based on a succession of tacitly renewed contracts or a regular flow of business, materialized by multiple orders. This was recently recalled by the Supreme Court (Supreme Court, February 16, 2022, n° 20-18.844)

                Second, this relationship must have an established character. There is no legal definition, but this notion has been defined year after year by case law which has established an objective criterion and a more subjective one.

                (a) The objective criterion implies a sufficiently long, regular and significant relationship between the two parties. The duration of the relationship is the most important criterion. The relationship must also be regular, that is, it must not have been interrupted (too often or too long). The relationship must ultimately be meaningful and represent a serious flow of business between the parties, in volume or value.

                (b) The subjective test focuses primarily on the legitimate belief of the victim of the rupture in the continuation of the contract / the relationship that is based on factual elements, such as investment requests, budgets over several years, etc. Conversely, it is on the basis of the finding of a lack of legitimate belief in a common future that the terminating party can prove the absence of a stable character when he has resorted, on several occasions, a call for tenders (unless it is a trick).

                Anticipating a “Sudden Termination” claim

                (a) The termination may be total or partial

                The total rupture is materialized by a complete stop of the relations, for example ending the contract, stopping the sending of orders by the purchaser or the recording of orders by the supplier.

                The Supreme Court recently recalled that a significant drop in sales with a partner must be considered as a partial rupture of the relationship (February 16, 2022, n° 20-18.844, cited above). But the most complicated situation to deal with is the so-called partial rupture that will be deduced from a modification of elements that partly impacts the relationship but does not reduce it to nothing (ex.: a price increase or decrease, a change in the terms of payment or delivery).

                (b) The termination must be subject to a reasonable written prior notice

                The notice must be notified in writing. The absence of written notice is already a breach in itself. The notification must clearly reflect the willingness of a party to sever the relationship in whole or in part, which must be clearly identified. The notification must also clearly identify the date on which the relationship will end.

                Thus, an ambiguity on the notice period (e.g if the termination of an agreement is notified, whilst offering to maintain certain prices and payment terms, in the meantime) is considered as an insufficient termination notice (French Supreme Court, January 29, 2013, n° 11-23.676).

                Parties must distinguish between the letter of formal notice for default and the subsequent notification of the breach, giving notice (if applicable). During the period of notice, parties must fully comply with all contractual conditions.

                This principle also applies to distribution contracts subject to specific French rules imposing annual or multi-year negotiation obligations. In fact, the Court of cassation has ruled that “when the conditions of the commercial relationship established between the parties are subject to annual negotiation, modifications made during the notice period which are not so substantial as to undermine its effectiveness do not constitute a brutal breach of that relationship” (Cass. com., Dec. 7, 2022, n° 19-22.538).

                However, it’s not necessary to mention the reasons why the commercial relationship is terminated is not a fault or breach of the relationship. In fact, French courts consider that “the fact that the given reason to terminate was false does not in any way present the terminating party from terminating the commercial relationship” (Versailles Court of Appeal, June 10, 1999).

                The duration of the prior notice to be respected is not defined by French law which did not pose precise rule until the reform 2019. If several criteria are stated by case law, it should be noted that the most important criterion is the duration of the relationship. Judges also take into account the share of turnover achieved by the victim, the existence or not of a territorial exclusivity, the nature of the products and the sector of activity, the importance of the investments made by the victim especially to the relationship in question, and finally the state of economic dependence. Economic dependence is defined as the impossibility for a company to have a solution that is technically and economically equivalent to the contractual relations it has established with another company. Case law considers this to be an aggravating factor justifying a longer termination notice.

                The minimum notice period must be notified at the time of notification of termination. As a consequence, events that affect the victim after the notification, both positively (conclusion of a new contract) and negatively (loss of another custome), will not be taken into account by the judge, at the time of ruling, when assessing the “brutality” of the termination.

                The length of the notice given by the judges is very variable. The appreciation of notice is made on a case-by-case basis. It is very difficult to give a golden rule, even though roughly for each year of relationship, a month’s notice might be due (to modulate up or down depending on the other criteria in the relationship). But way of illustration, however, the following case law may be cited:

                • Paris Court of Appeal , Feb.9, 2022: 16-year relationship with 15 months’ notice;
                • Paris Court of Appeal, Jan.20, 2022: 12-year relationship with 8 months’ notice;
                • Paris Court of Appeal, Oct. 25, 2022: 16-year relationship with 18 months’ notice;
                • Paris Court of Appeal , Feb. 23, 2022: 17-year relationship with 11 months’ notice;
                • Paris Court of Appeal, Sept. 21, 2022: 5-year relationship with 14 months’ notice.

                Since the Order of April 24, 2019, which limits the length of reasonable notice to a maximum of 18 months, if the notice period granted by a party is 18 months, it cannot be held liable for a sudden termination. However, much of the litigation remains uncertain, as only exceptionally long or particularly sensitive relationships led, prior to 019, to the award of more than 18 months’ notice. Ordinance of April 24, 2019, limits to 18 months the maximum period of notice reasonably due under Article L 442-1.II. But much of the litigation will remain uncertain since only relations of exceptional longevity or particularly sensitive, could have led to the allocation of a notice higher than 18 months.

                Judges are not bound by the contractual notices stipulated in the contract. But if the author of the breach also violated the terms and conditions of termination provided for by contract, the victim may seek the responsibility of the author both on the tort basis of the sudden rupture and also on the basis of the breach of a contractual obligation.

                Cases in which “Sudden Termination” is ruled out

                The legal regime provides for two cases, and the case-law seems to have imposed others.

                (a) The two legal exceptions are Force majeure (very rarely consecrated by the courts) and the fault of the victim of the termination, case-law having added that it must be a serious violation (“faute grave”) of a contractual commitment or a legal provision (such as non-respect of an exclusivity, a non-compete, a confidentiality or a change of control duty, or non-payment of amounts due contractually).

                The judges consider themselves, of course, not bound by a termination clause defining what constitutes serious misconduct. In any case the party who terminates for serious misconduct must clearly notify it in its letter of termination. Above all, serious misconduct leads to a lack of notice, therefore, if the terminating party alleges serious misconduct but grants notice, whichever it may be, judges may conclude that the fault was not serious enough.

                Thus, the seriousness of the misconduct must be motivated by judges in their rulings. Noting that the contract was breached after two formal notices is not sufficient (Cass. com., Feb 16. 2022, n° 20-18.844).

                However, the Court of Cassation considers that “even in the case of serious misconduct justifying the immediate termination of the commercial relationship, the other party remains free to give the other party a notice” (Cass. Com., Oct. 14 2020, n°18-22.119).

                (b) In recent years, case-law has added other cases of liability waiver. This is the case when the rupture is the consequence of a cause external to the author of the rupture, such as the economic crisis, the loss of its own customers or suppliers, upstream or downstream.

                For example, in 2021 the Court of cassation has ruled that “the business partner is not entitled to an unchanged relationship and cannot refuse any adaptation required by economic changes” (Com, Dec 01, 2021, n°20-19.113). In fact, to be attributable to an economic player, a termination must be free and deliberate. This is not the case if termination is imposed by the economic situation.

                However, adding a liability exemption clause in a contract, aimed at waiving destinated to escape the penalties of article L. 442-1, is without consequences on the judge’s appreciation.

                Judges have also excluded “sudden termination” in the hypothesis of the end of the first period of a fixed-term contract, whatever its duration is: the first renewal of a contract, constitutes a foreseeable event for the victim of the rupture, which excludes the very notion of brutality; but once the contract has been renewed at least once, judges can subsequently characterize the victim’s legitimate belief in a new tacit renewal.

                Compensation for “Sudden Termination”

                Judges only compensate for the detrimental consequences of the brutality itself of the breach but do not compensate, at least in the context of article L442 -1.II, for the consequences of the breach itself.

                The basic rule is very simple: it is necessary to determine the length of the notice which should have been granted, from which the notice actually granted is deducted. This net notice is multiplied by the average monthly gross margin of the victim, or more often the so called margin on variable costs (i.e. the turnover minus costs disappearing with non-performance of the contract/relation). Defendant should not hesitate to ask for the full accountancy evidences, especially to identify (lower) margin rates, or even for a judicial expertise on those accounting elements. In general, the base of the average monthly margin consists of the last 24 or 36 months.

                The compensation calculated on the average margin is, in general, exclusive of any other compensation. However, the victim can prove that it has suffered other losses as a consequence of the brutality of the rupture. Such as dismissals directly caused by this brutality or the depreciation of investments made recently by the victim.

                Some practical tips when considering to anticipate “Sudden Termination”

                Even though the legal regime is still ambiguous and the case-law terribly casuistic which prevents to release strong guidelines, here are some practical tips when a company plans to terminate a relationship / contract:

                • in the case of a fixed-term contract renewable tacitly, the notification of non-renewal must be anticipated well in advance of the beginning of the contractual notice in order to avoid being in a situation where it is necessary to choose between not renewing the contract with a notice that is not sufficient or agree to see the contract renewed itself for a new term;
                • commercial teams must be made aware of the risk of partial sudden termination when they change the conditions of execution of a commercial relationship / contract too radically;
                • in some cases, it may be useful to send a pre-notice of termination with a “notice proposal” in order to try to validate this notice with the other party;
                • it may also be useful, in certain relationships, to notify the end of the relationship with different lengths of notice depending on the nature of the product lines;
                • Finally, the best way is to conclude an end-of-relation protocol, fixing the duration of the notice as well as, if necessary, the progressive decline of the orders, the whole within the framework of a settlement agreement which definitively waives any claim, including “sudden termination”.

                Sudden termination regime shall be taken into consideration when entering into the final phase of a duration relationship: the way in which the contract (or de facto relationship) is terminated must be carefully planned, in order to manage the risk of causing damages to the counterparty and being sued for compensation.

                Given the significance of the influencer market (over €21 billion in 2023), which now encompasses all sectors, and with a view for transparency and consumer protection, France, with the law of June 9, 2023, proposed the world’s first regulation governing the activities of influencers, with the objective of defining and regulating influencer activities on social media platforms.

                However, influencers are subject to multiple obligations stemming from various sources, necessitating the utmost vigilance, both in drafting influence agreements (between influencers and agencies or between influencers and advertisers) and in the behaviour they must adopt on social media or online platforms. This vigilance is particularly heightened as existing regulations do not cover the core of influencers’ activities, especially their status and remuneration, which remain subject to legal ambiguity, posing risks to advertisers as regulatory authorities’ scrutiny intensifies.

                 

                Key points to remember 

                • Influencers’ activity is subject to numerous regulations, including the law of June 9, 2023.
                • This law not only regulates the drafting of influence contracts but also the influencer’s behaviour to ensure greater transparency for consumers.
                • Every influencer whose audience includes French users is affected by the provisions of the law of June 9, 2023, even if they are not physically present in French territory.
                • Both the law of June 9, 2023, and the “Digital Services Act,” as well as the proposed law on “fast fashion,” foresee increasing accountability for various actors in the commercial influence sector, particularly influencers and online platforms.
                • Despite a plethora of regulations, the status and remuneration of influencers remain unaddressed issues that require special attention from advertisers engaging with influencers.

                 

                The law of June 9, 2023, regulating influencer activity  

                The definition of influencer professions

                The law of June 9, 2023, provides two essential definitions for influencer activities:

                • Influencers are defined as ‘natural or legal persons who, for consideration, mobilize their notoriety with their audience to communicate to the public, electronically, content aimed at promoting, directly or indirectly, goods, services, or any cause, engaging in commercial influence activities electronically.’
                • The activity of an influencer agent is defined as ‘that which consists of representing, for consideration,’ the influencer or a possible agent ‘with the aim of promoting, for consideration, goods, services, or any cause‘ (article 7) The influencer agent must take ‘necessary measures to ensure the defense of the interests of the persons they represent, to avoid situations of conflict of interest, and to ensure the compliance of their activity‘ with the law of June 9, 2023.

                 

                The obligations imposed on commercial messages created by the influencer

                The law sets forth obligations that influencers must adhere to regarding their publications: 

                • Mandatory particulars: When creating content, this law imposes an obligation on influencers to provide information to consumers, aiming for transparency towards their audience. Thus, influencers are required to clearly, legibly, and identifiably indicate on the influencer’s image or video, regardless of its format and throughout the entire viewing duration (according to modalities to be defined by decree):

                  – The mention “advertisement” or “commercial collaboration.” Violating this obligation constitutes deceptive commercial practice punishable by two years’ imprisonment and a fine of €300,000 (Article 5 of the law of June 9, 2023).
                  – The mention of “altered images” (modification by image processing methods aimed at refining or thickening the silhouette or modifying the appearance of the face) or “virtual images” (images created by artificial intelligence). Failure to do so may result in a one-year prison sentence and a fine of €4,500 (Article 5 of the law of June 9, 2023).

                • Prohibited or regulated promotions: This law reminds certain prohibitions, subject to criminal and administrative sanctions, stemming from French law on the direct or indirect promotion of certain categories of products and services, under penalty of criminal or administrative sanctions. This includes the promotion of products and services related to:

                  – health: surgery, aesthetic medicine, therapeutic prescriptions, and nicotine products;
                  – non-domestic animals, unless it concerns an establishment authorized to hold them;
                  – financial: contracts, financial products, and services;
                  – sports-related: subscriptions to sports advice or predictions;
                  – crypto assets: if not from registered actors or have not received approval from the AMF;
                  – gambling: their promotion prohibited for those under 18 years old and regulated by law;
                  – professional training: their promotion is not prohibited but regulated.

                 

                The accountability of influencer behaviour

                The law also holds influencers accountable from the contracting of their relationships and when they act as sellers:

                • Regulation of commercial influence agreements: This law imposes, subject to nullity, from a certain threshold of influencer remuneration (defined by decree), the formalization in writing of the agreement between the advertiser and the influencer, but also, if applicable, between the influencer’s agent, and the mandatory stipulation of certain clauses (remuneration, mission description, etc.).
                • Influencer responsibility as a cyber seller: Influencers engaging in drop shipping (selling products without handling their delivery, done by the supplier) must provide the buyer with all information in French as required by Article L. 221-5 of the Consumer Code about the product, such as its availability and legality (i.e., guarantee that the product is not counterfeit), applicable product warranty, and supplier identity. Additionally, influencers must ensure the proper delivery and receipt of products and, in case of default, compensate the buyer. Influencers are also logically subject to obligations regarding deceptive commercial practices (for more information, the DGCCRF website explain the dropshipping).

                 

                The accountability of other actors in the commercial influence ecosystem

                 

                Joint and several liability is set by law, for the advertiser, influencer, or influencer’s agent for damages caused to third parties in the execution of the commercial influence contract, allowing the victim of the damage to act against the most solvent party.

                Furthermore, the law introduces accountability for online platforms by partially incorporating the European Regulation 2022/2065 on digital services (known as the “DSA“) of October 19, 2022.

                 

                French regulation and international influencers

                 

                Influencers established outside the European Union (including also Switzerland and the EEA) who promote products or services to a French audience must obtain professional liability insurance from an insurer established within the EU. They must also designate a legal or natural person providing “a form of representation” (SIC) within the EU. This representative (whose regime is not very clear) is remunerated to represent the influencer before administrative and judicial authorities and to ensure the compliance of the influencer’s activity with law of June 9, 2023.

                Furthermore, according to law of June 9, 2023, when the contract binding the influencer (or their agency) aims to implement a commercial influence activity electronically “targeting in particular an audience established in French territory” (SIC), this contract should be exclusively subject to French law (including the Consumer Code, the Intellectual Property Code, and the law of June 9, 2023). According to this law, the absence of such a stipulation would be sanctioned by the nullity of the contract. Law of June 9, 2023, seems to be established as an overriding mandatory law capable of setting aside the choice of a foreign law.

                However, the legitimacy (what about compliance with the definition of overriding mandatory rules established by Regulation Rome I?) and effectiveness (what if the contract specifies a foreign law and a foreign jurisdiction?) of such a legal provision can be questioned, notably due to its vague and general wording. In fact, it should be the activity deployed by the “foreign” influencer to their community in France that should be apprehended by French overriding mandatory rules, rather than the content of the agreement concluded with the advertiser (which itself could also be foreign, by the way).

                 

                The other regulations governing the activity of influencers

                 

                The European regulations

                The DSA further holds influencers accountable because, in addition to the reporting mechanism imposed on platforms to report illicit content (thus identifying a failing influencer), platforms must ensure (and will therefore shift this responsibility to the influencer) the identification of commercial communications and specific transparency obligations towards consumers.

                The «soft law»

                As early as 2015, the Advertising Regulatory Authority (“ARPP”) issued recommendations on best practices for digital advertising. Similarly, in March 2023, the French Ministry of Economy published a “code of conduct” for influencers and content creators. In 2023, the European Commission launched a legal information platform for influencers. Although non-binding, these rules, in addition to existing regulations, serve as guidelines for both influencers and content creators, as well as for judicial and administrative authorities.

                 

                The special status of child influencers

                The law of October 19, 2020, aimed at regulating the commercial exploitation of children’s images on online platforms, notably opens up the possibility for child influencers to be recognized as salaried workers. However, this law only targeted video-sharing platforms. Article 2 of the law of June 9, 2023, extended the provisions regarding child influencer labor introduced by the 2020 law to all online platforms. Finally, a recent law aimed at ensuring respect for the image rights of children was published on February 19, 2024, introducing a principle of joint and several responsibility of both parents in protecting the minor’s image rights.

                 

                The status and remuneration of influencers: uncertainty persists

                 

                Despite the diversity of regulations applicable to influencers, none address their status and remuneration.

                The status of the influencer

                In the absence of regulations governing the status of influencers, a legal ambiguity persists regarding whether the influencer should be considered an independent contractor, an employee (as is partly the case for models or artists), or even as a brand representative (i.e. commercial agent), depending on the missions contractually entrusted to the influencer.

                The nature of the contract and the applicable social security regime stem from the missions assigned to the influencer:

                • In the case of an employment contract, the influencer will fall under the general regime for employees and assimilated persons, based on Articles L. 311-2 or 311-3 of the French Social Security Code.
                • In the case of a service contract, the influencer will fall under the regime for self-employed workers.

                 

                The existence of a relationship of subordination between the advertiser and the influencer typically determines the qualification of an employment contract. Subordination is generally characterized when the employer gives orders and directives, has the power to control and sanction, and the influencer follows these directives. However, some activities are subject to a presumption of an employment contract; this is the case (at least in part) for artist contracts under Article L. 7121-3 of the French Labor Code and model contracts under Article L. 7123-2 of the French Labor Code.

                 

                The remuneration of the influencer

                The influencer can be remunerated in cash (fixed or proportional) and/or in kind (for example: receiving a product from the brand, invitations to private or public events, coverage of travel expenses, etc.). The influencer’s remuneration must be specified in the influencer agreement and is directly impacted by the influencer’s status, as certain obligations (minimum wage, payment of social security contributions, etc.) apply in the case of an employment contract.

                Furthermore, the remuneration (for the influencer’s services) must be distinguished from that of the transfer of their copyrights or image rights, which are subject to separate remuneration in exchange for the IP rights transferred.

                 

                The influencers… in the spotlight

                The law of June 9, 2023, grants the French authority (i.e. the Consumer Affairs, Competition and Fraud Prevention Agency, “DGCCRF”) new injunction powers (with reinforced penalties). This comes in addition to the recent creation of a “commercial influence squad“, within the DGCCRF, tasked with monitoring social networks, and responding to reports received through Signal Conso. The law provides for fines and the possibility of blocking content.

                As early as August 2023, the DGCCRF issued warnings to several influencers to comply with the new regulations on commercial influence and imposed on them the obligation to publicly disclose their conviction for non-compliance with the new provisions regarding transparency to consumers on their own social networks, a heavy penalty for actors whose activity relies on their popularity (DGCCRF investigation on the commercial practices of influencers).

                On February 14, 2024, the European Commission and the national consumer protection authorities of 22 EU member states, Norway, and Iceland published the results of an analysis conducted on 570 influencers (the so-called “clean-up operation” of 2023 on influencers): only one in five influencers consistently presented their commercial content as advertising. 

                In response to environmental, ethical, and quality concerns related to “fast fashion,” a draft law aiming to ban advertising for fast fashion brands, including advertising done by influencers (Proposal for a law aiming to reduce the environmental impact of the textile industry), was adopted by the National Assembly on first reading on March 14, 2024.

                Lastly, the law of June 9, 2023, has been criticized by the European Commission, which considers that the law would contravene certain principles provided by EU law, notably the principle of “country of origin,” according to which the company providing a service in other EU countries is exclusively subject to the law of its country of establishment (principle initially provided for by the E-commerce Directive of June 8, 2000, and included in the DSA). Some of its provisions, particularly those concerning the application of French law to foreign influencers, could therefore be subject to forthcoming – and welcome – modifications.

                Summary

                To avoid disputes with important suppliers, it is advisable to plan purchases over the medium and long term and not operate solely on the basis of orders and order confirmations. Planning makes it possible to agree on the duration of the ‘supply agreement, minimum volumes of products to be delivered and delivery schedules, prices, and the conditions under which prices can be varied over time.
                The use of a framework purchase agreement can help avoid future uncertainties and allows various options to be used to manage commodity price fluctuations depending on the type of products , such as automatic price indexing or agreement to renegotiate in the event of commodity fluctuations beyond a certain set tolerance period.

                I read in a press release: “These days, the glass industry is sending wine companies new unilateral contract amendments with price changes of 20%…”

                What can one do to avoid the imposition of price increases by suppliers? 

                • Know your rights and act in an informed manner
                • Plan and organise your supply chain

                Does my supplier have the right to increase prices?

                If contracts have already been concluded, e.g., orders have already been confirmed by the supplier, the answer is often no.

                It is not legitimate to request a price change. It is much less legitimate to communicate it unilaterally, with the threat of cancelling the order or not delivering the goods if the request is not granted.

                What if he tells me it is force majeure?

                That’s wrong: increased costs are not a force majeure but rather an unforeseen excessive onerousness, which hardly happens.

                What if the supplier canceled the order, unilaterally increased the price, or did not deliver the goods?

                He would be in breach of contract and liable to pay damages for violating his contractual obligations.

                How can one avoid a tug-of-war with suppliers?

                The tools are there. You have to know them and use them.

                It is necessary to plan purchases in the medium term, agreeing with suppliers on a schedule in which are set out:

                • the quantities of products to be ordered
                • the delivery terms
                • the durationof the agreement
                • the pricesof the products or raw materials
                • the conditions under which prices can be varied

                There is a very effective instrument to do so: a framework purchase agreement.

                Using a framework purchase agreement, the parties negotiate the above elements, which will be valid for the agreed period.

                Once the agreement is concluded, product orders will follow, governed by the framework agreement, without the need to renegotiate the content of individual deliveries each time.

                For an in-depth discussion of this contract, see this article.

                • “Yes, but my suppliers will never sign it!”

                Why not? Ask them to explain the reason.

                This type of agreement is in the interest of both parties. It allows planning future orders and grants certainty as to whether, when, and how much the parties can change the price.

                In contrast, acting without written agreements forces the parties to operate in an environment of uncertainty. Suppliers can request price increases from one day to the next and refuse supply if the changes are not accepted.

                How are price changes for future supplies regulated?

                Depending on the type of products or services and the raw materials or energy relevant in determining the final price, there are several possibilities.

                • The first option is to index the price automatically. E.g., if the cost of a barrel of Brent oil increases/decreases by 10%, the party concerned is entitled to request a corresponding adjustment of the product’s price in all orders placed as of the following week.
                • An alternative is to provide for a price renegotiation in the event of a fluctuation of the reference commodity. E.g., suppose the LME Aluminium index of the London Stock Exchange increases above a certain threshold. In that case, the interested party may request a price renegotiationfor orders in the period following the increase.

                What if the parties do not agree on new prices?

                It is possible to terminate the contract or refer the price determination to a third party, who would act as arbitrator and set the new prices for future orders.

                Roberto Luzi Crivellini

                Áreas de prática

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                • Comércio internacional
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                  International sale contracts: beware of implied warranties!

                  12 de Fevereiro, 2023

                  • Itália
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                  How real estate tokenisation works, what is the regulatory framework, and what rights investors actually acquire?

                  Real estate tokenisation, already present in Spain for several years, is no longer a futuristic promise but a tangible reality in the Spanish market. It represents more than just a technological innovation: it signifies a profound transformation in how we understand ownership, investment, and liquidity within the real estate sector — one of the most traditional and tightly regulated areas of our economy.

                  What is real estate tokenisation and how does it work?

                  In essence, to tokenise a property today means converting the economic rights associated with that asset into digital units that can circulate on blockchain-based platforms. Each token represents a fraction of those economic rights, allowing investors with more modest capital to access a market that has traditionally required substantial investments.

                  The role of smart contracts

                  Tokens operate through smart contracts that automatically execute the distribution of rental income or resale proceeds of that partial representation of the property, including any potential difference in value, eliminating intermediaries and providing transparency to the process. This automation is not merely cosmetic: it reduces operational costs, speeds up transactions, and potentially increases the liquidity of assets that have historically been among the least liquid in the market.

                  The legal reality: what is actually tokenised in Spain

                  It is essential to clarify from the outset a key point often blurred by marketing discourse: in practice, real estate tokenisation projects in Spain do not tokenise the property itself but rather the economic rights linked to a corporate vehicle (usually a special purpose vehicle, or SPV) that owns the property. Spanish law only allows the tokenisation of shares in joint-stock companies (sociedades anónimas) using distributed ledger technology; shares in limited liability companies (sociedades limitadas) cannot be tokenised. This means that if the SPV is a limited liability company, its shares cannot be directly tokenised — only other instruments such as participative loans or credit rights over income streams can be represented as tokens. Only if the SPV is incorporated as a joint-stock company is it legally possible to tokenise its shares.

                  What rights does a real estate token investor actually acquire?

                  An investor who acquires a token does not become a direct co-owner of the property. Depending on the structure chosen, they may become a shareholder in a tokenised joint-stock company that owns the property or a holder of economic rights derived from participative loans or other indirect forms of economic participation issued by the SPV that owns the asset. The distinction is crucial: if the company faces solvency issues or bankruptcy, the value of the token collapses with it, and the investor cannot exercise any direct real rights over the property.

                  Spanish law, rooted in centuries of land registry tradition, does not currently allow the transfer of real property rights through the mere transfer of tokens; a public deed and registration are required for the transfer to be effective against third parties. The SPV structure is therefore a compromise between technological possibilities and the demands of the current legal framework.

                  Regulatory framework for real estate tokenisation in Spain

                  CNMV authorisation and the 2023 Securities Market Law

                  The Spanish regulator has begun to establish a legal foundation for this technology to develop within a secure framework. In 2023, the Spanish National Securities Market Commission (CNMV) authorised Adventurees Capital PFP as the first crowdfunding platform to issue tokenised securities — a milestone in the convergence of crowdfunding and blockchain. This authorisation was accompanied by the approval of Law 6/2023 on the Securities Market, which expressly recognises the representation of transferable securities through distributed ledger technologies such as blockchain, granting them full legal validity.

                  The role of the Land Registry in the blockchain era

                  In parallel, the Spanish Association of Land Registrars is exploring how to integrate blockchain technology into the registry system, although it is important to clarify the real scope of these initiatives. Current projects focus mainly on complementary applications such as digital management of the Building Book or improved traceability and accessibility of registry information. They do not aim to replace the fundamental pillars of the system: execution of public deeds before a notary and registration of ownership, which remain absolutely mandatory for the transfer of real rights over property. Registrars are firm in their institutional stance: blockchain can complement and streamline document management, but it cannot replace the legal control exercised by the registrar or the protection of third parties offered by the Land Registry — both essential components of the Spanish legal system. This position reflects the current limitation of the model: tokens circulate on the blockchain representing positions in SPVs or economic rights over them, but the actual ownership of the property remains anchored in the traditional registry system, held by the corporate vehicle, and any transfer of that ownership must still follow the conventional legal process with all its guarantees.

                  European regulation: ECSPR, MiCA and the DLT Pilot Regime

                  Spain also benefits from a European regulatory framework that is positioning the EU as a global leader in digital asset regulation. The European Crowdfunding Service Providers Regulation (ECSPR) harmonises the rules for crowdfunding platforms, allowing an authorised platform in one Member State to operate across the EU through the so-called “European passport”. The MiCA Regulation, which came fully into force on 30 December 2024, broadly regulates crypto-asset markets, setting obligations for both issuers and service providers. The DLT Pilot Regime (EU Regulation 2022/858) allows market infrastructures based on distributed ledger technology to operate under certain temporary exemptions, creating a controlled testing environment to assess the potential of these technologies in financial markets.

                  The Spanish regulator’s approach could be described as cautiously supportive: innovation is encouraged, but strict compliance with anti-money laundering, customer identification, and disclosure obligations is required to protect investors. This is not technological laissez-faire, but rather an effort to integrate innovation within a solid framework of legal guarantees.

                  Legal challenges and risks of real estate tokenisation

                  The risks of the SPV structure

                  The legal challenges that remain are significant and deserve attention. The SPV structure, while legally viable, introduces an additional layer of complexity and risk that must be clearly communicated to investors. Unlike direct ownership — where the investor holds real rights over the property enforceable against third parties — in the current tokenised model, investors hold positions in indirect forms of economic participation (shares, participative loans, credit rights) linked to the company that owns the property. This has important implications for corporate liability, taxation, and insolvency protection.

                  The disconnect between the on-chain and off-chain worlds

                  It is also essential to understand that the connection between the “on-chain” world (where tokens circulate) and the “off-chain” world (where property rights are recorded) is neither direct nor automatic. Transferring a token does not in itself alter the Land Registry: ownership of the property remains with the SPV regardless of who holds the tokens, and only a duly notarised and registered deed can change that ownership. The exploratory projects of the Land Registrars aim to improve efficiency in information management but do not alter this fundamental principle. As in any emerging market, it is essential to prevent fraudulent schemes that promise unrealistic returns or market tokens without proper legal backing.

                  Practical implications for investors and legal practitioners

                  For legal practitioners, real estate tokenisation may require adapting contracts, corporate bylaws, and financing structures to an environment where rights circulate digitally and in a decentralised manner. For investors, it offers an opportunity to diversify portfolios with smaller capital contributions and greater liquidity potential than traditional real estate investment, provided they understand that they are not acquiring direct ownership of the property but rather a financial position linked to the corporate structure that owns it. And for the wider economy, it could invigorate a real estate market worth trillions of euros by facilitating the entry of retail capital previously excluded from such investments.

                  The future of real estate tokenisation in Spain

                  This is an evolution that combines law, technology, and finance in an inseparable way. It is essential to understand that tokenisation is not a passing trend but a tool that, when properly used and regulated, can transform access to one of society’s most valuable assets — property. However, this transformation currently operates through intermediate corporate structures and indirect forms of economic participation, not through direct ownership as commercial language sometimes suggests. It certainly does not imply an immediate revolution of Spain’s land registration system, whose fundamental guarantees remain intact.

                  It is quite common for business relationships with agents or distributors to last for years without any signed documents. And be careful, because we know that a contract can exist even verbally.

                  The absence of a written contract will add difficulties in the event of a possible claim, so what you do between the decision to terminate, and the moment of the claim is very important. Remember: ‘anything you write will be used against you’.

                  The decision to terminate a business relationship is a very delicate moment to which, for some reason, solicitors are not invited. Here are some examples (all real) in which companies or employees with the best of intentions wrote to the agent/distributor. All of them were subsequently very damaging to the company:

                  Saying ‘We are terminating our business relationship’ when the strategy will be to argue that no such business relationship exists, but rather that there are separate and linked contracts (e.g., supply rather than ongoing distribution contract; very significant compensation consequences).

                  ‘You no longer represent our company’, which may be evidence that you did so before.

                  ‘As of day X, you may no longer act on behalf of our company,’ which would prove that you were previously able to act on its behalf.

                  ‘You may not attend the X trade fair on our behalf.’ A way of confirming that the agent/distributor’s responsibilities included participating in trade fairs and probably accrediting the customers obtained.

                  ‘The sales you promoted have been significantly reduced in year N.’ When there is no written contract or other form of documentation, imputing a breach of an obligation that is not clear can be counterproductive.

                  Saying ‘You are not actively promoting our products’ and then adding: ‘We urge you to stop promoting the sale of our products’.

                  ‘You are no longer our exclusive representative’, which proves a type of relationship (representation/agent) and a tacit or express agreement (‘exclusivity’).

                  ‘We have appointed another representative in your area’, which shows that the agent/distributor had an assigned area and was “representing”.

                  ‘From this moment on, orders will be handled by X’, which also confirms a type of relationship.

                   

                  In summary: from the moment the company considers terminating a commercial relationship, especially when it is not in writing and before sending any letter, it is advisable to think carefully about the strategy in case of a possible claim. This is the best time to seek advice and avoid surprises. Any communication that is not in line with this strategy designed from the outset can only lead to confusion and problems.

                  Since the General Data Protection Regulation (GDPR) took effect in 2018, the European Union (EU) has granted adequacy status to only a limited number of jurisdictions — those whose data protection regimes are deemed to provide an “essentially equivalent” level of protection to that of the EU. The current list includes Andorra, Argentina, Canada (under PIPEDA), Faroe Islands, Guernsey, Isle of Man, Israel, Japan, Jersey, New Zealand, South Korea, Switzerland, Uruguay, the United Kingdom, and the United States (limited to companies certified under the Data Privacy Framework).

                  As of 5 September 2025, Brazil is on the verge of joining this exclusive group. The European Commission has issued a draft adequacy decision concluding that the Brazilian General Data Protection Law (Lei Geral de Proteção de Dados Pessoais – LGPD), in conjunction with Brazil’s broader legal and constitutional framework, offers protections that are essentially equivalent to those found in the GDPR. While Brazil’s rules offer somewhat more flexibility in specific areas of data processing, the foundational principles and safeguards are well-aligned with EU standards.

                  Once finalized, the adequacy decision will authorize the free flow of personal data from the EU to Brazil without the need for additional contractual clauses or technical safeguards. Such a development is not just regulatory — it also answers a core political argument made by LGPD advocates since its inception: that the absence of a comprehensive data protection framework was undermining Brazil’s international competitiveness by limiting data flows and discouraging investment. For businesses, the EU decision may finally mean the removal of a significant layer of compliance complexity — a development especially welcome by small and medium-sized enterprises engaged in cross-border trade or service provision. The draft is currently under review by the European Data Protection Board (EDPB) and the Member States of the EU.

                  The Commission’s assessment highlights several key aspects of Brazil’s data protection landscape. It begins by noting that the Brazilian Constitution expressly guarantees the right to privacy and the protection of personal data — a notable distinction among non-EU jurisdictions. These protections are further supported by Brazil’s ratification of the American Convention on Human Rights and its recognition of the jurisdiction of the Inter-American Court of Human Rights, reinforcing a commitment to fundamental rights and democratic oversight.

                  The LGPD mirrors the GDPR in many critical respects and defines its territorial scope clearly. It applies to: (i) data processing carried out within Brazilian territory, (ii) the offering of goods or services to individuals in Brazil, and (iii) data collected in Brazil, even if subsequently processed abroad. This aligns well with the extraterritorial provisions of the GDPR. The definitions of personal data, sensitive data, controller, and processor are materially similar, as are the key principles governing processing — including lawfulness, purpose limitation, data minimization, accuracy, transparency, and security. The law expressly excludes anonymized data from its scope and establishes specific exemptions for journalistic activities, public security, and scientific research.

                  Another strength is Brazil’s institutional framework. The National Data Protection Authority (ANPD) was recently transformed into an autonomous regulatory agency, enhancing its independence and technical capacity. The ANPD holds both regulatory and enforcement powers: it can issue binding regulations, impose administrative sanctions, and publish authoritative guidance. To date, it has issued key guidelines on topics such as consent, legitimate interest, the role of the Data Protection Officer (DPO), and security incident reporting. Internationally, the ANPD is an active participant in global data protection dialogue — it is a member of the Global Privacy Assembly and an official observer to the Council of Europe’s Convention 108.

                  The LGPD’s approach to international data transfers is also structurally aligned with the GDPR. It requires appropriate safeguards such as standard contractual clauses, allows for future adequacy decisions under a regime comparable to Article 45 of the GDPR, and includes detailed provisions for onward transfers and transit data — that is, data merely passing through Brazil without further processing. The rights of data subjects are robust and familiar to European practitioners: access, rectification, erasure, portability, and withdrawal of consent are guaranteed. Lawful bases for processing are also aligned — including consent, legal obligations, contract execution, and legitimate interest. Notably, the LGPD requires a documented balancing test when relying on legitimate interest, bringing additional accountability to this flexible legal basis.

                  Security incidents involving personal data must be notified to both the ANPD and affected data subjects when there is a significant risk of harm. The standard notification deadline is 72 hours, and the required content aligns closely with Articles 33 and 34 of the GDPR. The ANPD may also order public disclosure of incidents or require remedial measures, depending on the nature and scope of the breach.

                  Importantly, this process is not one-sided. In parallel to the European Commission’s adequacy decision, the ANPD is conducting its own adequacy assessment of the EU and EEA data protection frameworks. This process is regulated by the Brazilian Resolution CD/ANPD No. 19/2024, which governs international data transfers. Once the technical and legal evaluation is complete, the ANPD’s Board of Directors will issue a formal decision. This reciprocal move reflects Brazil’s commitment to mutual recognition and regulatory symmetry — a positive signal for companies on both sides of the Atlantic.

                  In conclusion: If confirmed, Brazil’s adequacy status will simplify international operations, reduce compliance costs, and expand opportunities for data-driven business and legal cooperation. For European lawyers advising SMEs with interests in Latin America, this development is a strategic signal: Brazil is emerging not just as a growing market, but as a legally compatible and data-safe jurisdiction for international partnerships.

                  Remember the USA – EU agreement on 15% tariffs? I wrote that with a negotiator like Trump the game is never over (article here) and—after the recent interlude featuring a threat of 100% tariffs on pharmaceuticals—the U.S. government has announced the imposition of an overall 107% duty on Italian pasta, which could take effect on January 1, 2026.

                  Where this new duty comes from

                  The antidumping investigation was launched by the U.S. Department of Commerce at the request of certain competing American companies and is based on a 1996 antidumping order that allows for periodic reviews of imports of Italian pasta. The Department of Commerce conducts these checks annually to assess whether Italian producers are selling pasta at prices lower than the U.S. domestic market, a practice known as “dumping.”

                  Companies involved in the investigation

                  The Department of Commerce selected two sample companies for in-depth analysis, defined as “mandatory respondents”: La Molisana and Pastificio Lucio Garofalo. According to the official document published by the U.S. administration, for the period from July 1, 2023 to June 30, 2024, both companies allegedly sold their products below market prices, resulting in the imposition of a duty of 91.74%.

                  U.S. authorities justified this percentage by claiming the two companies did not provide complete or compliant information as requested by the Department and were therefore insufficiently cooperative during the investigation. What is very important is that, in addition to the two companies directly examined, the additional 91.74% duty is also applied to numerous other Italian producers not individually reviewed. This methodology, while formally permitted under U.S. law as an exception, is being applied without any direct verification of the other companies.

                  Next steps in the procedure

                  Italy’s Ministry of Foreign Affairs moved immediately, formally intervening in the proceeding as an “interested party” through the Italian Embassy in Washington. The Foreign Ministry is working in close coordination with the companies concerned and, in concert with the European Commission, to persuade the U.S. Department to revise the provisional duties.

                  The two companies involved (La Molisana and Garofalo) can submit documentation to contest the dumping allegations. However, if dumping is confirmed, the Department of Commerce will instruct Customs to apply antidumping duties on goods sold and entered into U.S. commerce.

                  The preliminary nature of this determination means there is still room to change the decision before it becomes final.

                  Possible effective date

                  The new super-duty of 91.74%, which will be added to the existing 15% tariff for a total of 107%, is scheduled to take effect on January 1, 2026. This date therefore represents a crucial deadline for all ongoing diplomatic and legal actions.

                  If confirmed, the economic impact would be significant: in 2024, Italian pasta exports to the United States reached a value of €671 million according to Coldiretti, accounting for nearly 17% of the sector’s total exports. A 107% duty would risk seriously undermining competitiveness in one of the most important markets for Italian agri-food products.

                   What to do between now and January 1, 2026?

                  At this stage, the entry into force of the new duty depends on the outcome of the ongoing procedure: given what has happened in recent months, and the political use the U.S. administration has made of tariffs—well beyond their technical function—it is reasonable to be pessimistic.

                  So, what to do? In recent months we have seen companies react to the uncertainty over the fate of the tariffs in three ways:

                  • Some rushed to ship as many products as possible before the potential effective date of the duty;
                  • Some granted—upfront—discounts equivalent to the threatened duty, in case it came into force;
                  • Some suspended orders, pending definitive news on the impact of the duties.

                  These are all  valid options, but other effective tools for managing the uncertainty caused by the flurry of announcements, negotiations, and threats from the U.S. administration should not be forgotten: the risk of new duties being introduced, or existing ones being increased, can be managed in the contract by agreeing with the U.S. importer how any tariff change will affect the product.

                  The parties can stipulate, for example, that the increase will be split equally; or that the importer will bear it beyond a certain threshold; or that if the duty exceeds a certain level, the contracts may be terminated. You can find a deeper dive in this article.

                  The only certainty is that trade relations with the U.S. will stay unpredictable for a long time, and it’s vital to carefully manage the risk factors involved in selling products there. Right now, the focus is on tariffs and prices, and I encourage you to take this chance to thoroughly review existing agreements and assess whether—and how—other important points are addressed that could entail significant liabilities: we discuss them, very practically, in this book.

                  A dedicated notary account in Brazil is a legal mechanism that brings greater security, transparency, and reliability to financial transactions. Regulated under Law 8.935/1994 and Provision No. 197/2025, this service allows notaries to receive, manage, and release funds only after contractual conditions have been fulfilled. By ensuring segregation of assets, traceability, and impartial oversight, dedicated notary accounts provide an effective escrow-like solution for real estate deals, mergers and acquisitions, import/export operations, high-value asset purchases, and complex commercial contracts. This tool not only reduces legal risks and potential disputes but also strengthens trust between parties by guaranteeing that payments are safeguarded until obligations are met.

                  The legal basis can be found in Law 8.935/1994, § 1 of art. 7-A, which allows notaries to receive, deposit, and manage amounts related to legal transactions, with transactions subject to objectively verifiable facts/conditions. Provision No. 197, dated June 13, 2025, regulates, at the national level, the service of notarial accounts linked to Notary Public Offices.

                  Practical applications: among others, in the following transactions:

                  • Real estate: guarantee that the down payment and settlement amounts will be secured in a specific account. This mitigates the risk of misappropriation of funds and ensures that the money will be released only after all contractual conditions have been met.
                  • M&A: the linked notarial account creates a standardized escrow mechanism for the payment of price/holdbacks/earn-outs and conditional obligations.
                  • Purchase and Sale of High-Value Movable Property: the linked account can be used to guarantee payment. The buyer deposits the amount and the seller knows that the money is safe, being released only after the transfer of ownership and delivery of the goods.
                  • Import and Export: the transaction amount can be deposited with the notary and released to the exporter only after confirmation of delivery of the goods in the destination country, for example.
                  • Guarantee of Obligations: In any contract that provides for the payment of a sum of money as a guarantee, the notary account can be used to provide greater security to the parties.
                  • Supply, EPC/turnkey, and construction contracts: performance retentions, milestone acceptance (commissioning, as-built, issuance of ART/CREA), and payment against formal acceptance.
                  • Contractual joint ventures and commercial partnerships: advances conditional on licenses, authorizations, or competitive approval, where applicable.

                  Reduction of Legal Risks: The use of linked accounts reduces the chances of litigation related to lack of clarity about the origin and destination of funds. Companies can clearly demonstrate that payments were made and held by an impartial and secure institution.

                  Operational structure: limited to banking entities affiliated with the CNB, which must ensure the segregation of assets, traceability through audit trails, and proof of all transactions. The authorization of the delegate requires prior accreditation and electronic registration of the essential details of the transaction and its conditions in the CNB system, with access restricted to the parties and the notary.

                  Specific Purpose: amounts received as payment, guarantee, or advance payment as a result of notarial acts must be deposited in a bank account linked to the specific act and may only be moved for the purpose for which they are intended.

                  Transparency and Traceability: With the linked notarial account, it is possible to clearly track the financial flow of each transaction, which increases transparency for all parties and for supervisory bodies.

                  Verification of conditions and release. Once the objective conditions have been met, the notary authorizes the transfer to the recipients and files the proof of verification. In the event of a dispute between the parties, the notary suspends any movement, draws up a notarial deed, and advises on a consensual or judicial solution, without deciding on the effectiveness/termination of the transaction; if the transaction is frustrated and no solution is found, the procedure is terminated and the amounts are returned to the depositor, in accordance with the agreed clauses.

                  Confidentiality and access. In transactions with a confidentiality clause, the notary public maintains confidentiality and does not issue certificates regarding the content of the transaction; documents are accessible only for correctional purposes or by court order.

                  Remuneration and costs. The notary’s remuneration for the notarial account service is paid by the financial institution under the terms of the agreement, and the transfer of additional costs to the user is prohibited, without prejudice to fees for any related notarial acts.

                  Article 442-1.II of the French Commercial Code (former Article L. 442-6.I.5 °) sanctions the termination by a trader of a written contract or an informal business relationship without giving sufficient written prior notice. Over the last twenty years, this article became the recurring legal basis for all compensation actions (up to 18 months of gross margin, plus other damages) when a commercial relationship or a contract ends (totally or even partially).

                  Therefore, a foreign trader who contracts with a French company should try not to fall under the aegis of this rule (part I) and, if it cannot, should understand and control its implementation (part II).

                  In a nutshell:

                  How can a foreign company avoid or control the risk linked to the “sudden termination of commercial relations” set by French law? Foreign companies doing business with a French counterpart should:

                  • enter, as soon as possible, into a written (frame) agreement with their French suppliers or customers, even for a very simple relation and;
                  • stipulate a clause in favour of foreign court or arbitration and foreign applicable law while, failing to choose it, they would rather be subject to French courts and laws;

                  How can a foreign company master the risk linked to the “sudden termination of commercial relations” set by French law? Foreign companies doing business with a French counterpart should:

                  • know that this article applies to almost all type of commercial relationship or contracts, whether written or not, fixed-term or not;
                  • check whether its relation/contract is sufficiently long, regular and significant and whether the other party has a legitimate belief in the continuation of this relation/contract;
                  • give a written notice of termination or non-renewal (or even of a major modification), which length takes mainly into account the duration of the relation, irrespectively of the length of the contractual notice;
                  • invoke, with cautiousness, force majeure and gross negligence of the party, to set aside “sudden termination”;
                  • anticipate, in case of insufficient notice, a compensation which amount is the product of the average monthly gross margin per the length of non-granted prior notice.

                  How to avoid the application of the French “Sudden Termination” rule?

                  In international matters, a foreign company must anticipate whether its relationship will be subject or not to French law before terminating a contract or a business relationship and, in case of dispute, whether it will be brought before a French court or not.

                  What will be the law applicable to “Sudden Termination”?

                  It is quite difficult for a foreign company to correctly grasp the French legal framework of conflict of laws rules applicable to “sudden termination”. In a ruling of September 19, 2018 (RG 16/05579, DES/ Clarins), the Court of appeal of Paris made, by an implicit reference to the Granarolo EU ruling (07 14 16, N°C196/15) an extension of the contractual qualification to most of the business relationships which will improve foreseeability in order for a foreign company to try to exclude French law and its “sudden termination” rule.

                  Sudden termination of a written contract or of a “tacit contractual relationship”

                  According to Rome I Regulation (EC No 593/2008, June 17 2008) on the law applicable to contracts:

                  – In case of choice of a foreign law by the parties: The clause selecting a foreign applicable law will be valid and respected by French judges (subject to OMR, see below), provided that the choice of law by the parties is express or certain.

                  – In case of no choice by the parties: French law will likely to be declared applicable as it might be either the law of the country where is based the distributor/franchisee, etc. or the law of the country where the party who is to provide the service features of the contract has its domicile.

                  Sudden termination of a “non-tacit contractual relationship”

                  In case of informal relationship (i.e. orders placed from time to time), French judges would retain the tort qualification and will refer to the Rome II Regulation (No 864/2007, July 11 2007) on the law applicable to non-contractual obligations..

                  – In case of choice of a foreign law by the parties: a properly drafted choice of foreign law clause should be implemented by a French judge, provided that it expressly includes tort cases.

                  – In case of no choice of law by the parties: French law will likely to be declared applicable as it might be the law of the country where the damage occurs (regardless of the place of the causing event or that of the indirect consequences), which is the place of the head office where the French victim suffers the consequences of the termination.

                  “Sudden Termination” rule, a French Overriding Mandatory Rule?

                  The position of French courts is quite vague and unsatisfactory, and this has been the case for a long time. To make it short: the Commercial Court of Paris judges that “sudden termination” is not an OMR, the Court of appeal of Paris (sole French appellate court in charge of “sudden termination” cases) is also not in favour of the OMR qualification on the grounds that the text “protects purely private economic interests” (CA Paris, pôle 5, ch. 5, Feb 28. 2019, n° 17/16475 / CA Paris, pôle 5, ch. 5, Oct 8. 2020, n°17/19893). Recently, the Paris Court of Appeal reaffirmed that the rules on sudden termination of established commercial relations are not an OMR (Court of appeal Paris, March 11, 2021, n° 18/03112).

                  The French Supreme Court has never explicitly addressed the issue (OMR or not OMR). Indeed, the French Supreme Court ruled in the Expedia case (Cass. com., July 8, 2020, n°17-31.536) that the provisions of the former article L. 442-6, I, 2º and II, d), about “significant imbalance” (which is in the same set of rules than “Sudden termination”) are OMR. However, this qualification should be limited to the specific action brought by the Ministry of Finance and not be applicable to an action by a private party. Moreover, some courts may be tempted to invoke the provisions of French law n°2023-221 (March 30, 2023, aka Egalim III) to qualify Sudden termination rule as an OMR, however this text (article L 444-1.A Commercial code) does not quote expressly OMR and set no justification whatsoever to set such a qualification.

                  Consequently, if a claim for “sudden termination” is brought to a French court, there is still a  risk that the latter would exclude the applicable foreign law and replace it with the regime resulting from the “sudden termination” of Article L 442-1. II. However, to avoid this risk, a foreign company would better not only choose a foreign governing law but also stipulate that the dispute will be brought before a foreign judge or an arbitral tribunal.

                  How to avoid jurisdiction of French court over a “Sudden Termination” claim?

                  “Sudden Termination” claim and intra EU co-contractor

                  The ECJ ruling (Granarolo, July 14, 2016, N°C196/15) created a distinction between claims occurring from:

                  – written framework contract or tacit contractual relationship (existing only if the body of evidences listed by the ECJ are identified by national judges, i.e. length of relation and commitments recognized to each other, such as exclusivity, special price or terms of delivery or payment, non-competition, etc.): such claim has a contractual nature according to conflict of jurisdiction rules under Brussels I recast Regulation;

                  – informal relationship which is a non–tacit contractual relationship (i.e. orders placed from time to time): such a request has a tort nature under Brussels I recast ;

                  To be noted: the so-called Egalim III law has no impact on the EU rules on jurisdiction clauses.

                  (a) Who is the Judge of the “sudden termination” of a written contract or of a “tacit contractual relationship”?

                  – Jurisdiction clause for the benefit of a foreign court will be enforced by French courts, even though it is an asymmetrical clause (Court of cassation, October 7, 2015, Ebizcuss.com / Apple Sales International).

                  – In case of lack of choice of court clause, French courts are likely to have jurisdiction if the French claimant bringing a case based on “sudden termination» is the service provider, such as distributor, agent, etc. (see ECJ Corman Collins case, 19 12 13, C-9/12, and article 7.1.b.2 of Brussels I recast°).

                  (b) Who is the Judge of the “sudden termination” of a “non- tacit contractual relationship”?

                  – We believe that French courts may continue to give effect to a jurisdiction clause in tort case, especially when it expressly encompasses tort litigation (Court of cassation, 1° Ch. Civ., January 18, 2017, n° 15-26105, Riviera Motors / Aston Martin Lagonda Ltd).

                  – In case of lack of choice of court clause, French courts will have jurisdiction over a “sudden termination” claim as the judge of the place where the harmful event occurred (art. 7.3 of Brussels I recast), which is the place where the sudden termination has effect…i.e. in France if the French company is the victim.

                  “Sudden Termination” claim and Non-EU co-contractor

                  The Granarolo solution will not ipso facto apply if a French victim brings a claim to French courts, based on a “sudden termination” made by a non-EU company. In non-EU relations, French judges could continue to retain only the tort qualification. In such a case, French courts may keep their jurisdiction based on the place where the harmful event occurs.

                  Jurisdiction clause to a foreign court may be recognized in France (even for tort-based claims), provided that this jurisdiction clause is valid according to either a bilateral international convention or to the Hague Convention of 30 June 2005 on choice of court agreements. Otherwise, according to Egalim III law, imperative jurisdiction might be attributable to French courts.

                  “Sudden Termination” claim and arbitration

                  Stipulating an ad hoc or institutional arbitration clause is probably the safest solution to avoid the jurisdiction of French courts. Ideally, the clause will fix the seat of the arbitral tribunal outside France. According to the principle of competence-competence of the arbitrators, French courts declare themselves incompetent, unless the arbitration clause is manifestly void or manifestly inapplicable, regardless of contract or tort ground (see, in particular, Paris Court of Appeal, 5 September 2019, n°17/03703). The so-called “Egalim III” law has no impact on arbitration clauses.

                  Conclusion: Foreign companies should not leave open the Jurisdiction and governing Law issues. They must negotiate a safe harbour, otherwise a French victim of a termination will likely to be entitled to bring a “sudden termination” claim in front of French judges (see what happen below in Part 2)

                  How to master the “Sudden Termination” French rules?

                  When French law is applicable, the foreign company will face the legal regime of article L442 -1.II of the French Commercial Code sanctioning “sudden termination”. As a preliminary remark, it is important to know, above all, that the implementation of the liability for “sudden termination” is the consequence of the lack of a notice or a too short notice. Thus, this scheme does not lay down an automatic compensation rule. In other words, as soon as reasonable notice is given by the author of the termination, liability on that basis can be dismissed.

                  The prerequisite for “Sudden Termination”: an established commercial relationship

                  All contracts are covered by this legal regime, except for contracts whose regulations provide for a specific notice of termination, like commercial agency contracts and transport of goods by road subcontracts.

                  First, there must be a relationship that can be proven by a written contract or de facto, by behaviour of the parties. Article L.442-1 II of the French Commercial Code covers all “commercial” relationships and not only “contractual ones so that such relationship may be based on a succession of tacitly renewed contracts or a regular flow of business, materialized by multiple orders. This was recently recalled by the Supreme Court (Supreme Court, February 16, 2022, n° 20-18.844)

                  Second, this relationship must have an established character. There is no legal definition, but this notion has been defined year after year by case law which has established an objective criterion and a more subjective one.

                  (a) The objective criterion implies a sufficiently long, regular and significant relationship between the two parties. The duration of the relationship is the most important criterion. The relationship must also be regular, that is, it must not have been interrupted (too often or too long). The relationship must ultimately be meaningful and represent a serious flow of business between the parties, in volume or value.

                  (b) The subjective test focuses primarily on the legitimate belief of the victim of the rupture in the continuation of the contract / the relationship that is based on factual elements, such as investment requests, budgets over several years, etc. Conversely, it is on the basis of the finding of a lack of legitimate belief in a common future that the terminating party can prove the absence of a stable character when he has resorted, on several occasions, a call for tenders (unless it is a trick).

                  Anticipating a “Sudden Termination” claim

                  (a) The termination may be total or partial

                  The total rupture is materialized by a complete stop of the relations, for example ending the contract, stopping the sending of orders by the purchaser or the recording of orders by the supplier.

                  The Supreme Court recently recalled that a significant drop in sales with a partner must be considered as a partial rupture of the relationship (February 16, 2022, n° 20-18.844, cited above). But the most complicated situation to deal with is the so-called partial rupture that will be deduced from a modification of elements that partly impacts the relationship but does not reduce it to nothing (ex.: a price increase or decrease, a change in the terms of payment or delivery).

                  (b) The termination must be subject to a reasonable written prior notice

                  The notice must be notified in writing. The absence of written notice is already a breach in itself. The notification must clearly reflect the willingness of a party to sever the relationship in whole or in part, which must be clearly identified. The notification must also clearly identify the date on which the relationship will end.

                  Thus, an ambiguity on the notice period (e.g if the termination of an agreement is notified, whilst offering to maintain certain prices and payment terms, in the meantime) is considered as an insufficient termination notice (French Supreme Court, January 29, 2013, n° 11-23.676).

                  Parties must distinguish between the letter of formal notice for default and the subsequent notification of the breach, giving notice (if applicable). During the period of notice, parties must fully comply with all contractual conditions.

                  This principle also applies to distribution contracts subject to specific French rules imposing annual or multi-year negotiation obligations. In fact, the Court of cassation has ruled that “when the conditions of the commercial relationship established between the parties are subject to annual negotiation, modifications made during the notice period which are not so substantial as to undermine its effectiveness do not constitute a brutal breach of that relationship” (Cass. com., Dec. 7, 2022, n° 19-22.538).

                  However, it’s not necessary to mention the reasons why the commercial relationship is terminated is not a fault or breach of the relationship. In fact, French courts consider that “the fact that the given reason to terminate was false does not in any way present the terminating party from terminating the commercial relationship” (Versailles Court of Appeal, June 10, 1999).

                  The duration of the prior notice to be respected is not defined by French law which did not pose precise rule until the reform 2019. If several criteria are stated by case law, it should be noted that the most important criterion is the duration of the relationship. Judges also take into account the share of turnover achieved by the victim, the existence or not of a territorial exclusivity, the nature of the products and the sector of activity, the importance of the investments made by the victim especially to the relationship in question, and finally the state of economic dependence. Economic dependence is defined as the impossibility for a company to have a solution that is technically and economically equivalent to the contractual relations it has established with another company. Case law considers this to be an aggravating factor justifying a longer termination notice.

                  The minimum notice period must be notified at the time of notification of termination. As a consequence, events that affect the victim after the notification, both positively (conclusion of a new contract) and negatively (loss of another custome), will not be taken into account by the judge, at the time of ruling, when assessing the “brutality” of the termination.

                  The length of the notice given by the judges is very variable. The appreciation of notice is made on a case-by-case basis. It is very difficult to give a golden rule, even though roughly for each year of relationship, a month’s notice might be due (to modulate up or down depending on the other criteria in the relationship). But way of illustration, however, the following case law may be cited:

                  • Paris Court of Appeal , Feb.9, 2022: 16-year relationship with 15 months’ notice;
                  • Paris Court of Appeal, Jan.20, 2022: 12-year relationship with 8 months’ notice;
                  • Paris Court of Appeal, Oct. 25, 2022: 16-year relationship with 18 months’ notice;
                  • Paris Court of Appeal , Feb. 23, 2022: 17-year relationship with 11 months’ notice;
                  • Paris Court of Appeal, Sept. 21, 2022: 5-year relationship with 14 months’ notice.

                  Since the Order of April 24, 2019, which limits the length of reasonable notice to a maximum of 18 months, if the notice period granted by a party is 18 months, it cannot be held liable for a sudden termination. However, much of the litigation remains uncertain, as only exceptionally long or particularly sensitive relationships led, prior to 019, to the award of more than 18 months’ notice. Ordinance of April 24, 2019, limits to 18 months the maximum period of notice reasonably due under Article L 442-1.II. But much of the litigation will remain uncertain since only relations of exceptional longevity or particularly sensitive, could have led to the allocation of a notice higher than 18 months.

                  Judges are not bound by the contractual notices stipulated in the contract. But if the author of the breach also violated the terms and conditions of termination provided for by contract, the victim may seek the responsibility of the author both on the tort basis of the sudden rupture and also on the basis of the breach of a contractual obligation.

                  Cases in which “Sudden Termination” is ruled out

                  The legal regime provides for two cases, and the case-law seems to have imposed others.

                  (a) The two legal exceptions are Force majeure (very rarely consecrated by the courts) and the fault of the victim of the termination, case-law having added that it must be a serious violation (“faute grave”) of a contractual commitment or a legal provision (such as non-respect of an exclusivity, a non-compete, a confidentiality or a change of control duty, or non-payment of amounts due contractually).

                  The judges consider themselves, of course, not bound by a termination clause defining what constitutes serious misconduct. In any case the party who terminates for serious misconduct must clearly notify it in its letter of termination. Above all, serious misconduct leads to a lack of notice, therefore, if the terminating party alleges serious misconduct but grants notice, whichever it may be, judges may conclude that the fault was not serious enough.

                  Thus, the seriousness of the misconduct must be motivated by judges in their rulings. Noting that the contract was breached after two formal notices is not sufficient (Cass. com., Feb 16. 2022, n° 20-18.844).

                  However, the Court of Cassation considers that “even in the case of serious misconduct justifying the immediate termination of the commercial relationship, the other party remains free to give the other party a notice” (Cass. Com., Oct. 14 2020, n°18-22.119).

                  (b) In recent years, case-law has added other cases of liability waiver. This is the case when the rupture is the consequence of a cause external to the author of the rupture, such as the economic crisis, the loss of its own customers or suppliers, upstream or downstream.

                  For example, in 2021 the Court of cassation has ruled that “the business partner is not entitled to an unchanged relationship and cannot refuse any adaptation required by economic changes” (Com, Dec 01, 2021, n°20-19.113). In fact, to be attributable to an economic player, a termination must be free and deliberate. This is not the case if termination is imposed by the economic situation.

                  However, adding a liability exemption clause in a contract, aimed at waiving destinated to escape the penalties of article L. 442-1, is without consequences on the judge’s appreciation.

                  Judges have also excluded “sudden termination” in the hypothesis of the end of the first period of a fixed-term contract, whatever its duration is: the first renewal of a contract, constitutes a foreseeable event for the victim of the rupture, which excludes the very notion of brutality; but once the contract has been renewed at least once, judges can subsequently characterize the victim’s legitimate belief in a new tacit renewal.

                  Compensation for “Sudden Termination”

                  Judges only compensate for the detrimental consequences of the brutality itself of the breach but do not compensate, at least in the context of article L442 -1.II, for the consequences of the breach itself.

                  The basic rule is very simple: it is necessary to determine the length of the notice which should have been granted, from which the notice actually granted is deducted. This net notice is multiplied by the average monthly gross margin of the victim, or more often the so called margin on variable costs (i.e. the turnover minus costs disappearing with non-performance of the contract/relation). Defendant should not hesitate to ask for the full accountancy evidences, especially to identify (lower) margin rates, or even for a judicial expertise on those accounting elements. In general, the base of the average monthly margin consists of the last 24 or 36 months.

                  The compensation calculated on the average margin is, in general, exclusive of any other compensation. However, the victim can prove that it has suffered other losses as a consequence of the brutality of the rupture. Such as dismissals directly caused by this brutality or the depreciation of investments made recently by the victim.

                  Some practical tips when considering to anticipate “Sudden Termination”

                  Even though the legal regime is still ambiguous and the case-law terribly casuistic which prevents to release strong guidelines, here are some practical tips when a company plans to terminate a relationship / contract:

                  • in the case of a fixed-term contract renewable tacitly, the notification of non-renewal must be anticipated well in advance of the beginning of the contractual notice in order to avoid being in a situation where it is necessary to choose between not renewing the contract with a notice that is not sufficient or agree to see the contract renewed itself for a new term;
                  • commercial teams must be made aware of the risk of partial sudden termination when they change the conditions of execution of a commercial relationship / contract too radically;
                  • in some cases, it may be useful to send a pre-notice of termination with a “notice proposal” in order to try to validate this notice with the other party;
                  • it may also be useful, in certain relationships, to notify the end of the relationship with different lengths of notice depending on the nature of the product lines;
                  • Finally, the best way is to conclude an end-of-relation protocol, fixing the duration of the notice as well as, if necessary, the progressive decline of the orders, the whole within the framework of a settlement agreement which definitively waives any claim, including “sudden termination”.

                  Sudden termination regime shall be taken into consideration when entering into the final phase of a duration relationship: the way in which the contract (or de facto relationship) is terminated must be carefully planned, in order to manage the risk of causing damages to the counterparty and being sued for compensation.

                  Given the significance of the influencer market (over €21 billion in 2023), which now encompasses all sectors, and with a view for transparency and consumer protection, France, with the law of June 9, 2023, proposed the world’s first regulation governing the activities of influencers, with the objective of defining and regulating influencer activities on social media platforms.

                  However, influencers are subject to multiple obligations stemming from various sources, necessitating the utmost vigilance, both in drafting influence agreements (between influencers and agencies or between influencers and advertisers) and in the behaviour they must adopt on social media or online platforms. This vigilance is particularly heightened as existing regulations do not cover the core of influencers’ activities, especially their status and remuneration, which remain subject to legal ambiguity, posing risks to advertisers as regulatory authorities’ scrutiny intensifies.

                   

                  Key points to remember 

                  • Influencers’ activity is subject to numerous regulations, including the law of June 9, 2023.
                  • This law not only regulates the drafting of influence contracts but also the influencer’s behaviour to ensure greater transparency for consumers.
                  • Every influencer whose audience includes French users is affected by the provisions of the law of June 9, 2023, even if they are not physically present in French territory.
                  • Both the law of June 9, 2023, and the “Digital Services Act,” as well as the proposed law on “fast fashion,” foresee increasing accountability for various actors in the commercial influence sector, particularly influencers and online platforms.
                  • Despite a plethora of regulations, the status and remuneration of influencers remain unaddressed issues that require special attention from advertisers engaging with influencers.

                   

                  The law of June 9, 2023, regulating influencer activity  

                  The definition of influencer professions

                  The law of June 9, 2023, provides two essential definitions for influencer activities:

                  • Influencers are defined as ‘natural or legal persons who, for consideration, mobilize their notoriety with their audience to communicate to the public, electronically, content aimed at promoting, directly or indirectly, goods, services, or any cause, engaging in commercial influence activities electronically.’
                  • The activity of an influencer agent is defined as ‘that which consists of representing, for consideration,’ the influencer or a possible agent ‘with the aim of promoting, for consideration, goods, services, or any cause‘ (article 7) The influencer agent must take ‘necessary measures to ensure the defense of the interests of the persons they represent, to avoid situations of conflict of interest, and to ensure the compliance of their activity‘ with the law of June 9, 2023.

                   

                  The obligations imposed on commercial messages created by the influencer

                  The law sets forth obligations that influencers must adhere to regarding their publications: 

                  • Mandatory particulars: When creating content, this law imposes an obligation on influencers to provide information to consumers, aiming for transparency towards their audience. Thus, influencers are required to clearly, legibly, and identifiably indicate on the influencer’s image or video, regardless of its format and throughout the entire viewing duration (according to modalities to be defined by decree):

                    – The mention “advertisement” or “commercial collaboration.” Violating this obligation constitutes deceptive commercial practice punishable by two years’ imprisonment and a fine of €300,000 (Article 5 of the law of June 9, 2023).
                    – The mention of “altered images” (modification by image processing methods aimed at refining or thickening the silhouette or modifying the appearance of the face) or “virtual images” (images created by artificial intelligence). Failure to do so may result in a one-year prison sentence and a fine of €4,500 (Article 5 of the law of June 9, 2023).

                  • Prohibited or regulated promotions: This law reminds certain prohibitions, subject to criminal and administrative sanctions, stemming from French law on the direct or indirect promotion of certain categories of products and services, under penalty of criminal or administrative sanctions. This includes the promotion of products and services related to:

                    – health: surgery, aesthetic medicine, therapeutic prescriptions, and nicotine products;
                    – non-domestic animals, unless it concerns an establishment authorized to hold them;
                    – financial: contracts, financial products, and services;
                    – sports-related: subscriptions to sports advice or predictions;
                    – crypto assets: if not from registered actors or have not received approval from the AMF;
                    – gambling: their promotion prohibited for those under 18 years old and regulated by law;
                    – professional training: their promotion is not prohibited but regulated.

                   

                  The accountability of influencer behaviour

                  The law also holds influencers accountable from the contracting of their relationships and when they act as sellers:

                  • Regulation of commercial influence agreements: This law imposes, subject to nullity, from a certain threshold of influencer remuneration (defined by decree), the formalization in writing of the agreement between the advertiser and the influencer, but also, if applicable, between the influencer’s agent, and the mandatory stipulation of certain clauses (remuneration, mission description, etc.).
                  • Influencer responsibility as a cyber seller: Influencers engaging in drop shipping (selling products without handling their delivery, done by the supplier) must provide the buyer with all information in French as required by Article L. 221-5 of the Consumer Code about the product, such as its availability and legality (i.e., guarantee that the product is not counterfeit), applicable product warranty, and supplier identity. Additionally, influencers must ensure the proper delivery and receipt of products and, in case of default, compensate the buyer. Influencers are also logically subject to obligations regarding deceptive commercial practices (for more information, the DGCCRF website explain the dropshipping).

                   

                  The accountability of other actors in the commercial influence ecosystem

                   

                  Joint and several liability is set by law, for the advertiser, influencer, or influencer’s agent for damages caused to third parties in the execution of the commercial influence contract, allowing the victim of the damage to act against the most solvent party.

                  Furthermore, the law introduces accountability for online platforms by partially incorporating the European Regulation 2022/2065 on digital services (known as the “DSA“) of October 19, 2022.

                   

                  French regulation and international influencers

                   

                  Influencers established outside the European Union (including also Switzerland and the EEA) who promote products or services to a French audience must obtain professional liability insurance from an insurer established within the EU. They must also designate a legal or natural person providing “a form of representation” (SIC) within the EU. This representative (whose regime is not very clear) is remunerated to represent the influencer before administrative and judicial authorities and to ensure the compliance of the influencer’s activity with law of June 9, 2023.

                  Furthermore, according to law of June 9, 2023, when the contract binding the influencer (or their agency) aims to implement a commercial influence activity electronically “targeting in particular an audience established in French territory” (SIC), this contract should be exclusively subject to French law (including the Consumer Code, the Intellectual Property Code, and the law of June 9, 2023). According to this law, the absence of such a stipulation would be sanctioned by the nullity of the contract. Law of June 9, 2023, seems to be established as an overriding mandatory law capable of setting aside the choice of a foreign law.

                  However, the legitimacy (what about compliance with the definition of overriding mandatory rules established by Regulation Rome I?) and effectiveness (what if the contract specifies a foreign law and a foreign jurisdiction?) of such a legal provision can be questioned, notably due to its vague and general wording. In fact, it should be the activity deployed by the “foreign” influencer to their community in France that should be apprehended by French overriding mandatory rules, rather than the content of the agreement concluded with the advertiser (which itself could also be foreign, by the way).

                   

                  The other regulations governing the activity of influencers

                   

                  The European regulations

                  The DSA further holds influencers accountable because, in addition to the reporting mechanism imposed on platforms to report illicit content (thus identifying a failing influencer), platforms must ensure (and will therefore shift this responsibility to the influencer) the identification of commercial communications and specific transparency obligations towards consumers.

                  The «soft law»

                  As early as 2015, the Advertising Regulatory Authority (“ARPP”) issued recommendations on best practices for digital advertising. Similarly, in March 2023, the French Ministry of Economy published a “code of conduct” for influencers and content creators. In 2023, the European Commission launched a legal information platform for influencers. Although non-binding, these rules, in addition to existing regulations, serve as guidelines for both influencers and content creators, as well as for judicial and administrative authorities.

                   

                  The special status of child influencers

                  The law of October 19, 2020, aimed at regulating the commercial exploitation of children’s images on online platforms, notably opens up the possibility for child influencers to be recognized as salaried workers. However, this law only targeted video-sharing platforms. Article 2 of the law of June 9, 2023, extended the provisions regarding child influencer labor introduced by the 2020 law to all online platforms. Finally, a recent law aimed at ensuring respect for the image rights of children was published on February 19, 2024, introducing a principle of joint and several responsibility of both parents in protecting the minor’s image rights.

                   

                  The status and remuneration of influencers: uncertainty persists

                   

                  Despite the diversity of regulations applicable to influencers, none address their status and remuneration.

                  The status of the influencer

                  In the absence of regulations governing the status of influencers, a legal ambiguity persists regarding whether the influencer should be considered an independent contractor, an employee (as is partly the case for models or artists), or even as a brand representative (i.e. commercial agent), depending on the missions contractually entrusted to the influencer.

                  The nature of the contract and the applicable social security regime stem from the missions assigned to the influencer:

                  • In the case of an employment contract, the influencer will fall under the general regime for employees and assimilated persons, based on Articles L. 311-2 or 311-3 of the French Social Security Code.
                  • In the case of a service contract, the influencer will fall under the regime for self-employed workers.

                   

                  The existence of a relationship of subordination between the advertiser and the influencer typically determines the qualification of an employment contract. Subordination is generally characterized when the employer gives orders and directives, has the power to control and sanction, and the influencer follows these directives. However, some activities are subject to a presumption of an employment contract; this is the case (at least in part) for artist contracts under Article L. 7121-3 of the French Labor Code and model contracts under Article L. 7123-2 of the French Labor Code.

                   

                  The remuneration of the influencer

                  The influencer can be remunerated in cash (fixed or proportional) and/or in kind (for example: receiving a product from the brand, invitations to private or public events, coverage of travel expenses, etc.). The influencer’s remuneration must be specified in the influencer agreement and is directly impacted by the influencer’s status, as certain obligations (minimum wage, payment of social security contributions, etc.) apply in the case of an employment contract.

                  Furthermore, the remuneration (for the influencer’s services) must be distinguished from that of the transfer of their copyrights or image rights, which are subject to separate remuneration in exchange for the IP rights transferred.

                   

                  The influencers… in the spotlight

                  The law of June 9, 2023, grants the French authority (i.e. the Consumer Affairs, Competition and Fraud Prevention Agency, “DGCCRF”) new injunction powers (with reinforced penalties). This comes in addition to the recent creation of a “commercial influence squad“, within the DGCCRF, tasked with monitoring social networks, and responding to reports received through Signal Conso. The law provides for fines and the possibility of blocking content.

                  As early as August 2023, the DGCCRF issued warnings to several influencers to comply with the new regulations on commercial influence and imposed on them the obligation to publicly disclose their conviction for non-compliance with the new provisions regarding transparency to consumers on their own social networks, a heavy penalty for actors whose activity relies on their popularity (DGCCRF investigation on the commercial practices of influencers).

                  On February 14, 2024, the European Commission and the national consumer protection authorities of 22 EU member states, Norway, and Iceland published the results of an analysis conducted on 570 influencers (the so-called “clean-up operation” of 2023 on influencers): only one in five influencers consistently presented their commercial content as advertising. 

                  In response to environmental, ethical, and quality concerns related to “fast fashion,” a draft law aiming to ban advertising for fast fashion brands, including advertising done by influencers (Proposal for a law aiming to reduce the environmental impact of the textile industry), was adopted by the National Assembly on first reading on March 14, 2024.

                  Lastly, the law of June 9, 2023, has been criticized by the European Commission, which considers that the law would contravene certain principles provided by EU law, notably the principle of “country of origin,” according to which the company providing a service in other EU countries is exclusively subject to the law of its country of establishment (principle initially provided for by the E-commerce Directive of June 8, 2000, and included in the DSA). Some of its provisions, particularly those concerning the application of French law to foreign influencers, could therefore be subject to forthcoming – and welcome – modifications.

                  Summary

                  To avoid disputes with important suppliers, it is advisable to plan purchases over the medium and long term and not operate solely on the basis of orders and order confirmations. Planning makes it possible to agree on the duration of the ‘supply agreement, minimum volumes of products to be delivered and delivery schedules, prices, and the conditions under which prices can be varied over time.
                  The use of a framework purchase agreement can help avoid future uncertainties and allows various options to be used to manage commodity price fluctuations depending on the type of products , such as automatic price indexing or agreement to renegotiate in the event of commodity fluctuations beyond a certain set tolerance period.

                  I read in a press release: “These days, the glass industry is sending wine companies new unilateral contract amendments with price changes of 20%…”

                  What can one do to avoid the imposition of price increases by suppliers? 

                  • Know your rights and act in an informed manner
                  • Plan and organise your supply chain

                  Does my supplier have the right to increase prices?

                  If contracts have already been concluded, e.g., orders have already been confirmed by the supplier, the answer is often no.

                  It is not legitimate to request a price change. It is much less legitimate to communicate it unilaterally, with the threat of cancelling the order or not delivering the goods if the request is not granted.

                  What if he tells me it is force majeure?

                  That’s wrong: increased costs are not a force majeure but rather an unforeseen excessive onerousness, which hardly happens.

                  What if the supplier canceled the order, unilaterally increased the price, or did not deliver the goods?

                  He would be in breach of contract and liable to pay damages for violating his contractual obligations.

                  How can one avoid a tug-of-war with suppliers?

                  The tools are there. You have to know them and use them.

                  It is necessary to plan purchases in the medium term, agreeing with suppliers on a schedule in which are set out:

                  • the quantities of products to be ordered
                  • the delivery terms
                  • the durationof the agreement
                  • the pricesof the products or raw materials
                  • the conditions under which prices can be varied

                  There is a very effective instrument to do so: a framework purchase agreement.

                  Using a framework purchase agreement, the parties negotiate the above elements, which will be valid for the agreed period.

                  Once the agreement is concluded, product orders will follow, governed by the framework agreement, without the need to renegotiate the content of individual deliveries each time.

                  For an in-depth discussion of this contract, see this article.

                  • “Yes, but my suppliers will never sign it!”

                  Why not? Ask them to explain the reason.

                  This type of agreement is in the interest of both parties. It allows planning future orders and grants certainty as to whether, when, and how much the parties can change the price.

                  In contrast, acting without written agreements forces the parties to operate in an environment of uncertainty. Suppliers can request price increases from one day to the next and refuse supply if the changes are not accepted.

                  How are price changes for future supplies regulated?

                  Depending on the type of products or services and the raw materials or energy relevant in determining the final price, there are several possibilities.

                  • The first option is to index the price automatically. E.g., if the cost of a barrel of Brent oil increases/decreases by 10%, the party concerned is entitled to request a corresponding adjustment of the product’s price in all orders placed as of the following week.
                  • An alternative is to provide for a price renegotiation in the event of a fluctuation of the reference commodity. E.g., suppose the LME Aluminium index of the London Stock Exchange increases above a certain threshold. In that case, the interested party may request a price renegotiationfor orders in the period following the increase.

                  What if the parties do not agree on new prices?

                  It is possible to terminate the contract or refer the price determination to a third party, who would act as arbitrator and set the new prices for future orders.

                  Christian Montana

                  Áreas de prática

                  • Conflito de leis
                  • Contratos
                  • Empresa
                  • Planeamento patrimonial
                  • Contencioso
                  Contato Christian

                  Scrivi a Christian





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