The burden of proof of the proportionality of a quota clause

The facts: the exclusive distribution contract and the purchase quota clause

G.R.I.E., holder of an exclusive distribution contract for France for shisha tobacco, has granted Mercier exclusive distribution of these products in France. This contract provided in particular for an obligation to purchase a minimum annual quantity of 24 tonnes. After delays in delivery and orders below the contractual minimum, G.R.I.E. summoned Mercier to terminate the contract at his own fault and to pay damages for non-compliance with the purchase quotas and the market development obligation.

The Commercial Court of Chalon-sur-Saône ruled that the termination had occurred at the fault of G.R.I.E. and dismissed the latter of all its claims 1^§4. G.R.I.E. appealed this decision.

The arguments raised before the Court of Appeal: obligation of means or result?

Before the Court of Appeal, each party endeavoured to demonstrate that the responsibility for the failure of the contractual relationship lay with the other, relying on a series of separate grievances.

• The supplier invoked the violation of the payment obligation “100% to the validated order”, indicated in the contract. She argues that Mercier’s late payments, made after delivery, disrupted the logistics process and forced her to advance funds. But above all, it criticised Mercier for failing to comply with its “obligation to purchase a minimum of 24 tonnes per year”, which it described as an obligation of result. Mercier having ordered only 12 tonnes in the first year and no orders thereafter, G.R.I.E. claimed compensation for substantial commercial damage for the three years of the contract. Finally, the supplier alleged a breach of the “obligation to develop the market” and criticized Mercier’s refusal to accept a digitization project and to have made contact with competing suppliers, seeing it as a violation of its commitment to “do its best to develop the largest possible market”;
• The distributor, Mercier, argued that the termination was attributable to G.R.I.E. and its failure to comply with the delivery obligation, particularly given the delays in delivery. Regarding the quota clause, she argued that it was unrealistic, pointing out that G.R.I.E. had never justified this volume by market research. As a result, these goals were impossible to achieve and she could not be held to them. She argued that, in any event, G.R.I.E. ‘s delays in delivery prevented it from carrying out the contract normally and achieving the objectives set. Finally, Mercier sought compensation for the damage suffered as a result of G.R.I.E. ‘s breaches and in particular damage to its brand image among its customers, economic damage corresponding to the value of a stock of expired products that it had to destroy, and the costs of this destruction.

The decision of the Court of Appeal: quantitative objectives cannot be arbitrary

The Court of Appeal of Dijon confirms in all respects the judgment of first instance, carrying out a detailed factual analysis that neutralizes the arguments of the supplier and justifies the imputability of the termination to its own faults.

The Court dismissed the grievances formulated by G.R.I.E. one by one on the basis of the conduct of the parties and the economic logic of the contract.

Regarding the payment obligation, the judges noted that the parties had, in practice, agreed on terms different from those of the initial contract (payment on delivery via letter of credit) and that G.R.I.E. had accommodated this without ever sending formal notice. In doing so, the Court makes concrete execution prevail over the letter of a contract that the parties tacitly amended.

Concerning the quota clause, the Court deprives it of effect for two main reasons:

• on the one hand, it reclassifies it as an obligation of means, and not of result, by combining it with the “best efforts” clause provided for in the contract for the development of the market;

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• the other hand, and above all, it conditions the enforceability of such a clause on its “proportionate and realistic” nature. However, the Court notes that G.R.I.E., on whom the burden of proof rested, did not provide any evidence (for example a market study, previous figures, etc.) to justify the volume of 24 tonnes. This solution, which protects the distributor, reminds us that quantitative objectives cannot be arbitrary;

Finally, the Court dismissed the breach of the development obligation by pointing out that it was an obligation of means and that the contract did not require Mercier to accept the marketing projects of its supplier. In addition, since the contract was not an exclusive supply contract, Mercier was free to contact other suppliers.

Beyond rejecting G.R.I.E. ‘s claims, the Court identified the root cause of the non-performance in the supplier’s own failures. It notes that repeated delivery delays and partial deliveries are established and attributable to G.R.I.E.

The Court establishes a direct causal link between these delays and Mercier’s inability “to normally perform the contract from the first year”. By failing in its fundamental obligation to “provide the distributor with sufficient products to enable it to satisfy demand”, G.R.I.E. itself created the conditions for its co-contractor’s non-performance of its volume and development obligations. It is therefore logical that the termination is pronounced to his exclusive fault.

However, the Court is equally rigorous in its assessment of Mercier’s counterclaims. It rejects them, for lack of proof: the damage to the brand image is not demonstrated, and for the destroyed stock, Mercier does not prove either that the products were expired on delivery, or that it was unable to sell them. The Court here strictly applies the rules of burden of proof of injury and causation.

Conclusion: the importance of justifying the quotas imposed on the distributor

In conclusion, this judgment perfectly illustrates the importance of providing quotas that can objectively be achieved by the distributor and that they are therefore reasonable and adapted to the context. To justify this, it is essential to rely on historical figures or market studies and communicate them upstream.

(Dijon Court of Appeal, 2nd Civil Chamber, April 3, 2025, No.22/01150)