A significant part of commercial transactions is undertaken through intermediaries between the supplier and the final recipient of the product. The main types of cooperation of supplier and intermediary are commercial agency (the agent receives a commission based upon the worth of the goods to the sale of which he/she has contributed) and commercial distributorship (the distributor buys and resells on his/her own the goods within the framework of a steady cooperation with the supplier). Franchising has some common points, but it also presents its own features as a separate form of cooperation.
Given the special features of these forms of cooperation, it is of major importance that the relationship be regulated in a thorough way from its very beginning in view of securing the interests of the parties involved. Complex issues arise out from an anticipated termination of the contract, because in this event a claim for compensation is usually sought for. The indemnity for clientele is the compensation asked by the agent or distributor because of the termination of the agreement. It is calculated upon the basis of gains of the supplier due to the enlargement of his/her network in the wake of the efforts of the agent or the distributor.
Very often the disputes regarding the implementation or termination of commercial agency and distributorship agreements end up in complex legal proceedings before courts of arbitral tribunals, in which the provisions to be applied are influenced by European law. When the agreements are binding for persons or legal entities having their residence or seat in different countries, a choice-of-court clause may turn out to be crucial, in particular as far as it is indirectly determining the set of substantive rules to be applied on the merits.
As lawyers we are very active in drafting the relevant agreements and/or participating in the judicial/arbitral proceedings any dissent on the agreement’s implementation may lead to. Our involvement may also take place through delivering legal opinions or participating as arbitrators.
Publications related to commercial agency and distributorship:
- International Jurisdiction and Applicable Law Issues in Distribution Agreements (in Greek), Dikaion Etairion kai Epichireiseon (=Business and Company Law) 2004.857-870.
- The Impact of the Unification of European Procedural Law on Commercial Agency and Distribution Agreements, in Collection of Papers, Skopje 2011, p. 145-158.