Distribution Agreement Termination Notice

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Under the national legislation of the Member States, longer notice periods can be set; That is, four months for the fourth year of the contract, five months for the fifth year and six months for the sixth year and the next, and may decide that the parties cannot accept shorter deadlines. Turkish law sets the notice period at three months. Under the directive, agents are entitled to charge commissions on transactions concluded at the end of the transaction, provided that (i) the transaction is primarily due to the representative`s efforts during the period of the agency contract and that the transaction was concluded within a reasonable time after the end of the contract; or (ii) the third party`s order for a transaction that would normally give the agent the right to charge commissions during the term of the contract entered into by the client or agent prior to the termination of the contract. Section 113/3 of the CBT also follows the same conditions. The performance of a termination contract is one method of terminating a contractual relationship between the parties. An advantage over a unilateral declaration of termination by one of the parties is that it ensures that the rights and obligations of the parties arising from or related to the contract are respected and that it also regulates the relationship between the parties under the contract. In the absence of a termination clause and serious infringement, the parties should attempt to negotiate a review or modification of the distribution contract. The negotiations show that the party introducing the amendment still appreciates the relationship, although circumstances have changed. Perhaps the distributor did not meet the sales targets or marketed the product properly. Or maybe the distributor has a lot of product returns and customer complaints.

Working as a partner to solve these problems increases the likelihood that a viable solution will be indicated. Even if there is no solution, there is an increasing chance that the contract will end without becoming a lawyer`s participation and a legal action. 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. A distributor, which wishes to maintain the flexibility necessary to obtain the best products for its customers, a healthy profit margin and, as far as distribution relations are concerned, are not allowed under the regulation or in the category exemption release on the vertical agreements of the Turkish Competition Authority No. 2002/2. Both legislation, however, provides that a non-competitive obligation may be imposed on the distributor for up to one year, provided that the prohibition (i) relates to goods and services in competition with the goods or services subject to the contract, (ii) is limited to the facility or land on which the distributor operated during the term of the contract and (iii) to the protection of the know-how transferred by the contractor to the distributor.

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