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What should a supplier consider when terminating a distributor?

What should a supplier consider when terminating a distributor?

Beyond contractual and legal implications, a supplier must also consider more practical business-related issues, including servicing customers in the terminated territory, notice to other distributors in the network, and external communications with the terminated distributor and customers.

What to do when a supplier threatens termination?

State statutes often provide greater protections for the distributor when termination is threatened by a supplier.

What happens if supplier fails to pay invoice?

If Customer fails to pay undisputed invoiced amounts (including, without limitation, amounts determined pursuant to Section 11 to be owing to Supplier) within thirty (30) days after receipt of a written notice from Supplier, Supplier may terminate this Agreement.

What’s the good cause to terminate an agreement?

Good cause is frequently defined statutorily as a bankruptcy action filed by the distributor, complete withdrawal from the market by the supplier, moral turpitude by the distributor or, sometimes, the simple failure to abide by the terms of the agreement under some state statutes.

What does a supplier contract termination letter mean?

What is a Supplier Contract Termination Letter? A Supplier Contract Termination Letter refers to a letter that is written by a business owner to cancel the supply agreement due to specific reasons that don’t conform to the contract terms and conditions.

Can a supplier get out of a contract?

Even if your contract is governed by English law, where the existing supplier is foreign there may be local laws that override your contractual terms. These may imply terms into the contract on termination to protect the supplier’s position.

Can a supplier defend a decision to terminate?

If a particular reason is proffered for termination, but the “real reason” is exposed in discovery, defending a supplier’s decision can be extraordinarily difficult.

What happens if you terminate a distributor’s contract?

A terminated dealer may also have a claim for tortious interference with contract and/or tortious interference with a future business expectancy if a new distributor is appointed and allowed to sell during the notice of termination period and before the termination actually occurs.