Distributors entitled to compensation following termination of distributorship agreements

The laws of many countries both within and outside of the European Union entitle a distributor to compensation following termination of the distributorship agreement. In broad terms, this is comparable to the statutory protection given to commercial agents.

Recently the Spanish Supreme Court gave judgment that a Spanish distributor was entitled to compensation for the loss of a distributorship following termination of the agreement by its German supplier. In reaching this decision the Court built upon another judgment which it gave earlier this year in respect of a distributorship agreement.

The Court also confirmed that the distributor was entitled to notice of termination comparable to that given by law to commercial agents with the consequence that failure to give proper notice would entitle the distributor to damages.

 

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Stephen Sidkin
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