Jurisdiction Clause: When a Refusal to Sell Gives Rise to Tortious Liability

Imagine: you are the owner of a shop in Hyères, and you learn that a large group based in Paris has granted a franchise to a competitor a few streets away, in breach of an exclusivity agreement. You want to sue them, but the general terms and conditions of sale you signed require you to bring the case before a court in Paris. Is this really mandatory?

This question is asked every year by hundreds of owners, traders and developers. The answer, given by the French Supreme Court in 1996, is crucial: when the dispute concerns a tortious act (such as an abusive refusal to sell), the clause designating a distant court can be set aside. And if you are in Toulon, this changes everything for your proceedings.

The judgment of 9 April 1996 (n° 94-14.649) reminds us of a fundamental rule: the law protects the victim of damage by allowing them to choose the court closest to the place where the harm occurred. Analysis of a landmark case, with practical advice for real estate professionals in the PACA region.

The Facts: A Story That Happens Every Day

The company Galerie Kléber, which runs two clothing stores in Strasbourg and Mulhouse, had obtained the right to distribute the "Penny Black" range of clothes from the Italian group Max Mara. But one day, it learns that Max Mara has granted a franchise to a third party to open a shop in Strasbourg, in one of its exclusive zones. Furious, Galerie Kléber sues Max Mara and its Italian subsidiary before the Strasbourg court for damages.

Problem: Max Mara relies on a jurisdiction clause in its general terms and conditions of sale, which designates the Paris court as the only competent court. The Strasbourg company refuses to comply with this clause: it considers that the dispute does not arise from a simple contract, but from a tortious fault (an abusive refusal to sell) committed in Strasbourg, where the damage occurred.

The Colmar Court of Appeal rules in favour of Galerie Kléber on 8 March 1994. Max Mara appeals to the Supreme Court. But the Supreme Court confirms: the refusal to sell constitutes an act capable of giving rise to the tortious liability of the Italian company. Consequently, the jurisdiction clause, which only applies to contractual disputes, cannot be invoked. The Strasbourg court is indeed competent.

The Reasoning of the Court — Explained

The judges of the Supreme Court relied on Article 1240 of the Civil Code (formerly Article 1382), which provides that "any act whatsoever of a person which causes damage to another obliges the person by whose fault it occurred to repair it". Here, the main grievance is not the non-performance of a contractual obligation (such as a failure to deliver), but a wrongful act: granting a franchise to a third party in breach of Galerie Kléber's rights. This is a tortious fault, independent of the contract.

Why is this important? Because jurisdiction clauses are valid only for disputes arising out of the contract. They cannot be imposed when the substance of the case is tortious. Otherwise, one party could impose a distant court on the other, even for wrongful acts committed elsewhere. The Supreme Court firmly reminds us: "the alleged refusal to sell constitutes an act capable of giving rise to the tortious liability of the company".

This was not obvious at the time. Some courts tended to apply the clause even in the presence of quasi-tortious faults, for the sake of legal certainty. But the Supreme Court clarified the hierarchy: the right of access to a court close to the place of damage prevails over a contractual clause when the dispute is tortious. A confirmation that provides a valuable weapon for victims.

What This Changes for You — Practically

If you are a landlord in Toulon and your commercial tenant causes you harm (for example, by subletting without permission, or damaging the premises), you can sue them before the Toulon court, even if the lease contains a jurisdiction clause designating Paris. Why? Because the tenant's fault (unauthorised subletting) is a tortious act, and the damage (loss of rent, deterioration) occurs in Toulon.

For a buyer in Hyères: if a seller abusively refuses to sign the deed of sale after accepting your offer, you can bring an action in tortious liability before the Hyères court, even if the preliminary contract mentioned a court in Marseille. The refusal to sell is a fault, not a mere contractual non-performance.

In practice, this saves you travel and lawyer costs in another city. Imagine: your damages amount to €15,000. If you had to sue in Paris, your legal fees (€3,000) and travel expenses (€500) would significantly reduce your compensation. By acting locally, you keep most of the sum.

A tip: as soon as you consider that you are suffering abnormal damage (not just a contractual non-performance), prefer the tortious route. Check that the defendant's domicile or the place of the harmful act is within the jurisdiction of a court near you.

Four Tips to Avoid This Type of Dispute

• Check jurisdiction clauses in all your contracts. Before signing a lease, preliminary contract or franchise agreement, identify the clause designating the competent court. If it imposes a distant court, negotiate its amendment or request an addendum.
• Document any incident immediately. As soon as you notice an abnormal act (refusal to sell, unauthorised subletting, damage), gather evidence: emails, photos, witness statements. This will allow you to characterise a tortious fault.
• Consult a lawyer before acting. A professional will tell you whether your dispute is contractual or tortious. In Hyères or Toulon, Maître Zakine can help you choose the most favourable strategy.
• Do not passively accept an unfair clause. Even if the contract is signed, you can challenge the application of the clause if the dispute is tortious. The 1996 case law protects you.

Further Reading: Related Case Law and Developments

This decision is part of a line of protection for victims. Already in 1985, the Supreme Court had ruled that the jurisdiction clause could not be invoked against a non-contracting third party (Civ. 1ère, 25 June 1985). But in 1996, it goes further: even between contracting parties, if the dispute is tortious, the clause is set aside.

More recently, the Supreme Court clarified that the characterisation of "contractual" or "tortious" is a matter for the sovereign assessment of the lower courts (Civ. 1ère, 13 January 2021). In other words, each case is unique. But the trend is clear: courts favour the connection with the place of damage.

For real estate professionals in Toulon, this case law is a safety net. If a client causes you harm through their fault, you are not bound by a distant clause. The future? With the digitalisation of contracts, jurisdiction clauses are becoming more frequent, but judges remain vigilant not to deprive victims of local access to justice.

Frequently Asked Questions

Can I challenge a jurisdiction clause if I am a tenant in Hyères and the lease designates the Paris court? Yes, if your dispute concerns a fault of the landlord (e.g., failure to comply with decency obligations, harassment). You can invoke tortious liability and bring the case before the Toulon court.

What are the time limits for bringing a tortious liability action? You have 5 years from the date the damage became apparent (Article 2224 of the Civil Code). But it is better to act quickly to facilitate proof.

What is the cost of a tortious action? Lawyer fees vary: expect €1,500 to €3,000 for a simple case, more if the proceedings are lengthy. But you can obtain full compensation for your damage.

What if the contract provides for a mandatory mediation clause before any trial? This clause remains valid, as it does not affect territorial jurisdiction. You must first attempt mediation, but if it fails, you can bring the case before the court near your home if the dispute is tortious.

Does this case law apply to disputes with banks or insurance companies? Yes, as long as the substance of the dispute is tortious. For example, if a bank causes you harm through an abusive refusal of credit, you can sue it before the court of your domicile, even if the banking contract designates another court.

Are you in a similar situation? A first 30-minute consultation with Maître Zakine (€45) can save you months of proceedings — and often much more. Book an appointment →