Distribution Agreement Termination Clause

During the period of agency and distribution relations, it is customary for the confidential information and documents of the client to be communicated to the agent or distributor for the management of the transaction. Accordingly, the termination contract should include provisions governing the use or removal of such information, documents and materials, and the data and documents held by the recipient should either be cancelled or returned to its owner. The parties may agree to set the confidentiality period after closing, provided that this obligation of confidentiality is not limited by the existing competition rules. The Turkish Competition Authority`s guidelines on vertical agreements[1] stipulate that the use and disclosure of non-public know-how may be restricted indefinitely. Regulation 330/2010 of the European Commission[2] also contains a parallel provision to impose, over time, the use and disclosure of know-how that has not been made public. The Federal Insolvency Act allows a bankrupt company to confirm or deny current contracts. If a distributor goes bankrupt, the distribution agreement may be its main asset. Therefore, the distributor can confirm this contract. If so, the manufacturer will not have the choice to go under the federal insolvency law, but with confirmation.

However, we find that it is not as serious as it initially appears. While the manufacturer is required to continue to comply with the contract, there are also obligations for the distributor/liquidator. In normal operations, agencies do not hold shares. With regard to stocks held by traders, it is up to the parties to decide whether they are still used by the distributor or bought back by the client. In the case of a buyback, it is important to explicitly state the terms of the purchased products in the termination agreement; That is, whether they are new or not, in original packaging, etc. Another point on which the parties should agree is the purchase price dependent on the commodity, provided that the principles governing the determination of the feed-in price are not governed by the distribution contract. Distribution agreements can provide food and beverage companies with a low-risk way to open up profitable new markets. Many distribution agreements are becoming long-standing and successful agreements for suppliers and distributors. But if it is necessary or desirable to end a distribution relationship, it is important to ensure that this is done effectively and effectively. The parties are free to determine, as far as possible, the principles of termination, the date of termination and the content of the termination contract in accordance with the applicable legislation. The content should be determined taking into account the details of the main contract and the intent of the parties.

Depending on the intention of the parties, the termination date may be set as the date of signing the termination agreement or as a date or reason determined after the date of the signing and as a retroactive date. Under Turkish law, the conditions of the right of agents to compensation of goodwill are similar to the provisions of the directive. In addition, the last paragraph of section 122 of the CBT states that the provisions in this area also apply to the termination of exclusive distribution contracts and other similar continuing contracts that confer an exclusive right, unless it is contrary to the principle of fairness. 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.