Distribution agreement or agency agreement: find the differences
Court of The Hague
The court in The Hague recently ruled whether there was a distribution agreement (this could be a franchise agreement, for example) or an agency agreement. Under Dutch law, the distinction between a distribution agreement (franchise agreement and an agency agreement) mainly lies in the fact that an agent mediates purely on behalf of his principal (client) in the conclusion of the agreements between the principal and the customer, while a distributor (franchisee) on the other hand, purchases products in its own name and for its own account and risk and then resells them.
The distinction is very important in connection with numerous legal obligations that apply to an agent, where they do not automatically apply to a distributor (franchisee), unless the franchisee and franchisor have arranged this in their franchise agreement. If there is mediation between the agent (this can also be a franchisee) and, as stated above, the principal (client, the company in question) and the consumer, under certain circumstances there is also a claim to legal goodwill upon termination of the contract. the contract between the agent and the principal. This is fundamentally different with a distribution agreement, where this legal right is absent. When the distribution agreement or agency agreement is terminated, other rights and obligations arise for the parties. Incidentally, in practice it appears that the systems can also go together. For example, there is a franchise agreement with agency elements or vice versa. This is very well possible, although the franchisee / agent and the franchisor / principal must make various choices with regard to their contract options. The choices are thereby limited, since not all agency provisions can be set aside by law, if this were desirable at all. In this case, the court ruled that there was a distribution agreement, which can have various consequences for the parties in the eventual settlement of their relationship in the long term.
Mr Th.R. Ludwig – Franchise attorney
Ludwig & Van Dam Franchise attorneys, franchise legal advice Would you like to respond? Mail to ludwig@ludwigvandam.nl
Other messages
Circumvent post non-compete clause in franchising
On 3 April 2018, the Court of Appeal of Arnhem-Leeuwarden, ECLI:NL:GHARL:2018:3128, overturned an interim injunction of the District Court of Gelderland on competitive activities.
Column Franchise+ – “Prohibition of sales via internet platforms in franchise agreement exempt from cartel prohibition”
At the end of last year, Thuisbezorgd.nl incurred the wrath of many meal delivery companies by announcing another rate increase. The standard rate of Thuisbezorgd.nl thus reached a
Column Franchise+ – Franchisor acts unlawfully by providing a forecast through a third party
Disputes about forecasts between franchisor and franchisee remain a hot topic in franchising. After the Street-One judgment, it seems that franchisors feel safe
Column Franchise+ – Outsourcing forecasting to an administrative office does not benefit the franchisor
Disputes about forecasts between franchisor and franchisee remain a hot topic in franchising. After the Street-One judgment, it seems that franchisors feel safe
Outsourcing prognosis to an administrative office does not benefit the franchisor
Disputes about forecasts between franchisor and franchisee remain a hot topic in franchising.
Contribution Mr. AW Dolphijn in Contracting magazine 2018, no. 1: “The unilateral amendment clause in the franchise agreement.”
A contribution by mr Dolphijn has been published in the magazine Contracteren entitled: “The unilateral amendment clause in the Franchise Agreement”.