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Distribution Agreement Indemnification

By September 17, 2021 Uncategorised No Comments

Secondly, even after the end of the distribution relationship, the supplier must enjoy substantial advantages linked to the commercial relations with the customers acquired by the distributor. This second requirement has two important aspects: fourthly, the distribution relationship must not be severed for a reason attributable to the distributor. Secondly, there must be a certain loyalty on the part of the customers to the supplier so that the supplier can continue to do business with these customers at the end of the distribution relationship. This is the case, for example. B where retailers purchased by a former wholesaler continue to purchase products directly from the supplier after the end of their relationship with the wholesaler. In addition, a supplier can continue to benefit from the customers won by the dealer if he can carry out a profitable after-sales activity, for example.B. by supplying consumables, spare parts and maintenance and repair services. Swiss case law distinguishes between two different types of clients: private clients and real clients. The former are linked to the distributor due to a special relationship of trust and usually remain with the distributor after the termination of the distribution relationship. These are linked to a brand or product and usually follow the supplier. In principle, only real customers can justify a courtesy allowance.

In Switzerland, distribution contracts are innominate contracts, i.e. agreements that are not expressly governed by Swiss law on obligations (“OR”). Distribution contracts are mainly in accordance with the general provisions of Swiss contract law. In addition, certain provisions of Swiss agency law (art. 418 bis et seq.) may be CO) shall apply by analogy to distribution relationships. Due to the limited jurisprudence of the Federal Court, there is legal uncertainty as to what “significant expansion” means. Two factors seem to prevail: on the one hand, the absolute number of customers and, on the other hand, the turnover achieved with these customers. The customers present at the beginning of the distribution relationship must be compared to the customers at the end of the contract.

The difference must be positive. The more these elements are included in a distribution agreement, the more likely it is that Article 418C CO can apply by analogy to the distribution ratio in question. However, if there is little or no such evidence, it is very likely that Article 418 E OR will not be applicable and that no courtesy compensation will be due.