Still deliver in case of payment arrears.

By Published On: 07-06-2013Categories: Statements & current affairs

Central Netherlands Court

The Central Netherlands District Court recently ruled that even in the event of payment arrears of more than € 100,000, the franchisor could not unilaterally terminate the franchise agreement and had to deliver. The idea was that the payment arrears had existed for a long time and the franchisee had drawn the franchisor’s attention to this. Payment arrears were also tolerated for a long time and a single policy change on the part of the franchisor proved insufficient to make use of the contractually stipulated right of termination in the event of payment arrears. The court also considered that the franchisor could be expected to draw up a concrete plan for repayment of the payment arrears in consultation with the franchisee. If such consultation and such a plan are not forthcoming, a good defense can be made against the suspension of deliveries by appealing to reasonableness and fairness.

In times of crisis, the court thus puts the brakes on rash decisions to stop such deliveries. Franchisors are thus warned that the duty of care also extends to financial guidance and timely intervention if payment arrears arise.

 

Mr J. Sterk – Franchise lawyer

Ludwig & Van Dam Franchise attorneys, franchise legal advice Would you like to respond? Mail to info@ludwigvandam.nl

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