Brutal termination of established business relationships

By a judgment of 17 January 2025, the Paris Court of Appeal confirmed the applicability of the basis for the sudden termination of commercial relations in the audiovisual sector.

From 2001 to 2020, TSE and Ruq entered into numerous fixed-term contracts for the production of television programmes to be broadcast on public service channels, in particular the France 2 television channel. TSE was then the producer of the programmes, whose animation it entrusted to Ruq, in return for remuneration. This was particularly the case with the show entitled “On n ‘est pas couché”.

As of 2009, the relationship between the parties has developed into a partnership. For each season, the company TSE and the company Ruq signed co-production contracts for the programmes, providing for a distribution of revenues.

Mr. Ruquier did not wish to renew the production of the show “On n ‘est pas couché” for the 2020/2021 season. On 12 May 2021, the company TSE summoned the company Ruq before the Commercial Court of Paris, in order to obtain its condemnation to compensate it for the damage resulting from the sudden termination of an established commercial relationship, as well as the payment of several claims related to the clearance of the co-production accounts of the show.

By judgment dated 20 June 2022, the court granted TSE’s claims and, in particular, ordered Ruq to pay TSE:

• the sum of €780,340 in damages, in compensation for the loss of margin on variable costs due to insufficient notice of termination,
• the sum of €219,375 in compensation for redundancies caused by the brutality of the termination.

By a judgment of 17 January 2025, the Paris Court of Appeal confirmed the judgment of first instance in that it held the existence of established commercial relations and the brutality of termination, and added to it by amplifying the convictions pronounced.

On the existence of an established commercial relationship, the Court held that “the constancy of the commercial relationship is inferred from the multiplicity of contracts whose execution was spread out, without interruption, for nearly nineteen years, which gave rise to a particularly significant stream of business” […]; “if it is true that the relationships established in the audiovisual sector of activity are not intended to usually be part of stability, the history of the relationship between the parties, thus traced, shows that the signing of production and co-production contracts corresponded to orders, equally regular, from France Télévisions with which the relationship was also sustainable, even though it had reduced the amount of the budget initially allocated to the program” On n ‘est pas couché “, which did not necessarily augur the premature end of its broadcast.

On the predictability of the termination, the Court held that “the ‘provision for cessation of issue’ recorded in the accounts of TSE does not induce a lack of belief in the durability of the relationship, but only establishes the willingness of its managers to anticipate the possible risks of the cessation of the issue” […] “In view of all these circumstances, it must be considered that TSE could legitimately expect to continue its collaboration with Ruq, and anticipate a certain continuity of business flow with its business partner in the future”.

During the notice period, Ruq notified, for the first time, in writing, its decision to end the relationship, by email of April 24, 2020, which ended on June 30, after the last shooting of the show, so that TSE received a notice period of 2.25 months.

The duration of the business relationship established was, in this case, nineteen years, on the day of the termination, so that account must be taken of the significant seniority of this relationship. In view of all the elements of the file, the Court confirms that the sufficient period of notice can be estimated, as the court held, at ten months.

On the compensation of damages, the Court recalls the constant solution according to which “Only damages resulting from the brutality of the rupture and not the rupture itself are compensable […] (Cass., Com., 10 February 2015, No.13-26.414, published in the Bulletin). » […] “The main damage resulting from the sudden nature of the termination is assessed in consideration of the expected gross margin, that is to say the difference between the expected turnover excluding tax and the variable costs excluding tax not borne during the period of insufficient notice, difference from which may still be deducted, if applicable, the share of fixed costs not borne due to the decline in activity resulting from the termination, during the same period (Cass., Com., 28 June 2023, appeal No.21-16.940, published in the Bulletin). ”