Termination Agreement Distribution

On 3 January 2018, the Federal Supreme Court issued a new judgment on the termination of an exclusive distribution contract (judgment 4A_27/2018). The decision focuses on the evidence of damages related to the early termination of a distribution contract. In addition, proof of the annual net profit linked to a right to compensation for goodwill is examined in accordance with Article 418 J of the Swiss Code of Obligations („OR“). The new decision is of great interest, especially since decisions of the Bundesgericht on allocation are quite rare. Let your customers for the supplier think about the severity of the distributor`s reporting obligations in order to maintain the pulse of the distribution agreement without putting pressure on the distributor. Often, the supplier wants to put in place a structure that guarantees sufficient performance and guarantees him the right to terminate the relationship. Other contractual considerations that a supplier or supplier advisor should take into consideration are the following: too often, the quality of a contract is defined by the problems subsequently posed by poor design. Even the best-placed contractual plans can become a swamp of litigation in the event of unforeseen problems or relationship breakdowns. Concluding distribution contracts requires not only foresight and experience in dealing with possible problems, but also a healthy relationship between suppliers and distributors.

Legal advice can help the parties avoid these pitfalls. The development of a framework for dealing with common contractual issues specific to distribution contracts is both possible and necessary. Under Turkish law, art. 123 of the Turkish Commercial Code („TCC“) [3], which governs the agency relationship, provides that the parties may agree on a non-competition clause after the end of the procedure, provided that the agent is adequately compensated. The competition agreement must be in writing and a written document containing the provisions of the contract and signed by the contracting entity must be given to the agent. . . .