Termination Of The Distribution Agreement

As far as customer transfer is concerned, representatives and traders are subject to different regulations. At the end of the agency contract, for whatever reason, the representative is required to transfer his clients to the contracting entity within the relevant area and to cooperate and assist the contracting entity in the implementation of a smooth and effective transition. In particular, if the agent is deprived of the commission to which he would normally be entitled while the awarding entity derives benefits related to the agent`s activity or if he has not been able to depreciate the costs and costs incurred for the performance of the contract on the advice of the awarding entity, that agent would be entitled to compensation for the damage suffered. A common area of concern during termination is the status of the extended customer base or client lists and how this information is handled if there is no specific clause to address the issue. It is clear that both parties have a stake in maintaining control or financial relations with the companies in the end-to-end distribution chain. The supplier wants to preserve the expanded market obtained by the distribution contract and distributors often want to restrict the use of customer information by suppliers. It is important to report on what each party learns through its relationship with the other. A manufacturer relies on a distributor to transport a product to its customers. The distributor depends on the manufacturer`s revenues to support its activities. Both parties must agree on how the distributor will transport the products and how much the manufacturer will pay for the service. Where these agreements are no longer manageable, the parties can terminate the distribution contract and either establish a new agreement or terminate the relationship. On 3 January 2018, the Swiss Supreme Court issued a new judgment on the termination of an exclusive distribution contract (4A_27/2018 judgment). The decision focuses on evidence of injury related to the early termination of a distribution contract.

In addition, evidence of the annual net salary associated with a goodwill claim under Article 418 does not apply to Swiss bond law (“CO”) is examined. The new decision is of considerable interest, especially since the Swiss Supreme Court`s distribution decisions are quite rare. The directive offers Member States the possibility of introducing allowances or allowances into their local legislation (good will). Before the expiry of the agency contract, the parties are not allowed to revoke the compensation and compensation provisions that prejudice the representative. The agent loses his right to compensation or compensation if he does not tell the client that he intends to exercise his right within one year of the end of the contract. A supplier wants to retain control of its distribution network with the ability to redefine areas, modify product offerings, prices and distribution targets. While the possibility of amending these aspects of a trade agreement may be incorporated into a distribution agreement, a distributor will generally oppose the amendments to the extent that it attempts to redefine the trade agreement between the parties at the beginning of the relationship.