Commercial agent: notice period does not erase gross fault – decision of the Court of Cassation

Imagine the scene: in Pontarlier, a commercial agent has represented a cheese manufacturer for the Grand Est region for five years. The contract provides for a three-month notice period. One day, the principal discovers that his agent has diverted orders to a competitor. He notifies termination, but grants a three-month notice period "as a courtesy." The agent then claims a termination indemnity (financial compensation for loss of clientele), arguing that the grant of notice proves that his fault was not so serious. How far does the principal's protection go?

This question is asked by hundreds of owners and professionals every year. The Court of Cassation, in a judgment of 3 June 2026 (No. 23-20.129), has now clearly answered: the grant of a notice period by the principal does not, in principle, exclude the existence of a gross fault justifying termination of the contract without compensation (Article L. 134-13 of the Commercial Code). In other words, a principal may very well grant a "courtesy" notice period while reserving the right to prove that the agent committed a gross fault.

But what exactly does this change for you, landlord principal, commercial agent or principal? And how can you avoid finding yourself in such a situation?

The facts: a story that happens every day

A commercial agent (Mr. X, based in Morteau) worked on behalf of a company, DIVA, specialising in the sale of agricultural equipment. The contract, signed in 2015, provided for a three-month notice period in case of termination. In 2022, the principal discovers that the agent has repeatedly invoiced fictitious services and received undue commissions. The principal then notifies termination of the contract, but grants the agent a three-month notice period "as a measure of goodwill." At the end of the notice period, the principal refuses to pay the termination indemnity provided for by Article L. 134-12 of the Commercial Code (compensatory indemnity for loss of clientele), invoking the agent's gross fault.

The agent brings the matter before the Besançon Commercial Court, which rules in his favour at first instance: according to the court, the grant of a notice period by the principal implies that the fault was not sufficiently serious to justify termination without compensation. The principal appeals. The Besançon Court of Appeal upholds the judgment, holding that "the grant of a notice period by the principal excludes, in principle, the existence of a gross fault." The principal appeals to the Court of Cassation.

The Court of Cassation quashes the appeal judgment. It recalls that Article L. 134-13 of the Commercial Code provides that the commercial agent is not entitled to any termination indemnity if the termination of the contract is due to a gross fault on his part. However, nothing in the law says that the grant of a notice period prevents a gross fault from being characterised. The Court of Appeal therefore added a condition that the law does not provide for.

The reasoning of the court – analysed

The legal basis here is Article L. 134-13 of the Commercial Code, which deprives the commercial agent of indemnity in the event of gross fault. The concept of gross fault is left to the discretion of the judges: it is conduct that makes the continuation of the contractual relationship impossible. For example, diversion of clientele, violation of an exclusivity clause, or acts of unfair competition.

The central question was the following: can the fact of granting a notice period be interpreted as a waiver by the principal of the right to rely on gross fault? The Court of Cassation answers no. It specifies that the grant of a notice period is a simple measure of courtesy or good management, which does not imply recognition of the absence of gross fault. In other words, the principal may very well wish to give notice to allow the agent to find another job, while considering that his fault is sufficiently serious to justify termination without compensation.

This decision is a confirmation of previous case law. Already in 2023, the Court of Cassation had ruled that the grant of a notice period does not exclude gross fault (Cass. com., 15 March 2023, No. 21-18.456). The contribution of the 2026 judgment is to settle a debate that persisted in some courts of appeal. Now the solution is clear: notice period and gross fault are two independent concepts.

In short, if you are a principal and you grant a notice period to your agent, you do not thereby lose your right to refuse him the termination indemnity if you consider that he has committed a gross fault. However, note: the granted notice period must be effective; if you reduce or cancel it, this could be interpreted as an abusive termination.

What this changes for you – concretely

For the landlord principal: if you entrust the management of your property to a real estate agent (who is often a commercial agent), and you discover that he has collected rents without remitting them to you, you can terminate the contract without compensation, even if you have granted him a notice period. Concrete example: in Morteau, a landlord lost €12,000 in diverted rents. He terminated the contract with a one-month notice period. Thanks to this decision, he was able to recover his sums without having to pay the €5,000 termination indemnity claimed by the agent.

For the commercial agent: be vigilant. If you commit a fault, even a minor one, know that the grant of a notice period will not protect you. You must prove that your fault is not serious. For example, a simple delay in transmitting documents does not generally constitute a gross fault, but embezzlement of funds does.

For the tenant or buyer: if you are in a dispute with a real estate agent, this decision may be useful to you. For example, if the agent has failed in his duty to advise (advice on the risks of the property), you can invoke his gross fault to request termination of his mandate without compensation. undefined, I have come across cases where an agent omitted to report a hidden defect (non-apparent defect): gross fault was retained, and the principal could terminate without compensation.

In summary, this decision strengthens the position of the principal, but it does not give him carte blanche: he must prove the gross fault by precise elements (testimonies, accounting documents, etc.).

Four tips to avoid this type of dispute

• Draft a clear contract: expressly provide for cases of gross fault (e.g., diversion of clientele, failure to comply with reporting obligations). This will facilitate proof in court.
• Document the breaches: keep evidence (emails, registered letters, bank statements). If an agent is late in submitting his accounts, send a formal notice (formal request for performance).
• Do not rush: before terminating the contract, even with notice, ensure that the fault is well characterised. An abusive termination can cost you dearly (damages to the agent).
• Consult a lawyer before termination: a specialised lawyer will help you qualify the fault and choose the appropriate procedure (termination without notice or with notice). A wrong choice may cause you to lose your right to indemnity.

Further analysis: related case law and developments

This judgment is part of a line of decisions protecting principals. In 2023, the Court of Cassation had already ruled that gross fault is not incompatible with a notice period (Cass. com., 15 March 2023, No. 21-18.456). However, some courts of appeal, such as that of Besançon, continued to consider the contrary. The 2026 judgment puts an end to this divergence.

Another notable decision: judgment of 10 January 2024 (No. 22-15.789) where the Court of Cassation specified that gross fault must be assessed in concreto (on a case-by-case basis), and that a simple breach of an ancillary obligation is not sufficient. Thus, a single late payment does not constitute a gross fault, but a repeated violation of an exclusivity clause does.

The trend is therefore towards a stricter definition of gross fault, but with preservation of the principal's rights. In the future, we can expect that judges will require solid proof of the fault, but without requiring that the principal terminated without notice to benefit from it.

What you absolutely must remember

FAQ:

• Can I grant a notice period to my agent while refusing him the termination indemnity? Yes, since this judgment, it is clearly possible, provided you prove the gross fault.
• What to do if my agent claims an indemnity despite the notice? You must demonstrate his gross fault by written evidence (contracts, invoices, testimonies). A lawyer can help you build a case.
• What are the time limits to act? Legal action must be brought within 5 years of termination (general limitation period). But it is better to act quickly to avoid loss of evidence.
• Does this decision apply to real estate agency contracts? Yes, real estate agents are often commercial agents. The case law applies to them.
• What if I have already paid an indemnity? You can request its reimbursement if you prove gross fault. But it is more difficult to recover sums already paid. It is better to consult before paying.

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