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Regulation of a Distributor for Non-performance


A client wanted a distributor for its goods. To protect its position in its market and long-term prosperity, our client sought some control over the longevity of the arrangement should the distributor not perform.

We discussed creating a contract which contained standard clauses which would include the ability to terminate for non-performance and breach, but it was felt that these were too uncertain and may result in protracted litigation to enforce. We advised the client to consider imposing minimum sales targets upon the distributor which if not achieved would grant a right of termination or other regulating sanction by the supplier.

This was agreed, resulting in a negotiated agreement containing these provisions which provided our client with the peace of mind that there was a straightforward approach to the regulation of its distributor should it not adequately perform.

Please note this information is provided by way of example and may not be complete and is certainly not intended to constitute legal advice. You should take bespoke advice for your circumstances.

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