The easiest way to terminate a distribution contract with a minimum of Rancor is to include a termination clause covering the termination basis, the reason for termination, the amount of prior notice required and any compensation that each party must pay. The provisions must clearly state the termination dates – for example, two years from today`s date – and whether or not the distribution contract ends in the event of a breach of a specific clause in the contract. If the agreement contains a “breach termination,” this clause must also contain clear information about what constitutes an infringement, requirements for injury notifications and the time it takes to remedy the infringement. In the absence of a termination clause in the distribution contract, the manufacturer and distributor may negotiate a review of the current agreement. While the parties still view this relationship as profitable and rewarding, the renegotiations show that they can still cooperate, although their circumstances have changed since the original agreement was signed. These efforts also show that even if they fail to reach a new agreement, the parties can cooperate to avoid costly legal action. A distribution agreement allows a distributor to transport or resell products purchased by a manufacturer. The manufacturer supplies the products and the distributor acts as a seller, either as a wholesaler or as a distributor. The distribution agreement may be exclusive, with a single distributor using a manufacturer for a particular product or region.
The agreement may also allow several distributors to collaborate with several manufacturers. The manufacturer generally states the terms of the agreement, including all marketing tactics or product licensing procedures, and the distributor agrees to comply with these conditions. From that point on, our company will no longer place orders with your company. We will not cancel any orders or delivery agreed upon prior to this letter, unless we expressly notify you. Ideally, all pending orders should be completed before our contract is officially terminated. We will delete our page all amounts of unpaid money in our account until [date]. To that end, we would like to receive all relevant invoices before [date]. Many distribution agreements contain a clause that allows either party to terminate the contract without any legal involvement.