Cancelling A Distribution Agreement

In legal orders, courts will generally respect the explicit terms of the distribution agreement between the parties. In the United Kingdom, Hong Kong, Singapore and Malaysia, the usual contractual rules apply to distribution agreements, so that if a contract is terminated or not renewed in accordance with its terms and conditions of termination, the courts will very rarely intervene. It is only in the absence of notice that the courts enter into an obligation of “appropriate notification” in light of the circumstances of the case. In the event that the supplier terminates the distribution contract in violation of its terms, the distributor will sue for breach and may claim damages for damages caused by termination or unlawful infringement. The situation is similar in the United States, although a number of state laws (and at least one federal law) impose minimum termination periods for termination and often also for non-extension of distribution vessels.4 As you can see, there are many factors to consider when establishing a well-suited sales contract. You must consider and deal with a variety of facts, contingencies, regulations, statutes, business practices and many times the egos of the parties. More than nothing, the provisions that are originally considered minor or axiomatic become major problems on the road. This can be avoided by transparency and planning in the initial phase of contract negotiations. As a lawyer, you need to take the time to work closely with your client to ensure that their needs are met, but also that their backs are covered. This way you will have curry favors with your client and let them go back to what they do best without worrying when they make a “bad deal”. A distribution contract is a contract under which a seller (the “distributor”) markets and markets products he has purchased from a manufacturer (the “supplier”). A successful distribution relationship can pay off for both the supplier and the distributor, but what happens if the supplier wants to escape the agreement? The termination of a sales contract without proper consideration can be an expensive process, especially when the laws of some countries are designed to protect the distributor from termination, even at the price of explicit contractual terms1.