Termination of a dealer agreement in relation to price maintenance
At the end of 2007, the Court of Appeal in Arnhem issued an interesting ruling relating to termination of a dealer agreement in relation to resale price maintenance.
What was going on? A manufacturer of mattresses, box springs and bedroom furniture has terminated an indefinite dealer agreement with a local dealer (a home furnishing company) by a certain date. From the termination date, the manufacturer subsequently also no longer supplied products to this dealer.
The (ultimate) reason given by the manufacturer for the cancellation was that the local dealer was “undermining” the manufacturer’s dealer organization. The dealer had started selling products via his website at a standard discount of 20%. It should be clear that the other dealers saw this with sorrow. After all, they suffered a loss of turnover as a result. The manufacturer acknowledged that the other dealers pressured him to stop selling products at a 20% discount.
The Court concludes on the basis of the facts that the manufacturer has terminated the dealership solely to maintain the margin of the other dealers.
The interesting thing about this ruling is that the Court of Appeal then mainly approaches this issue from a practical point of view. Although the manufacturer stated that there was no resale price maintenance, indirectly this was indeed the case. After all, the dealer who did not conform to the manufacturer’s recommended price was eliminated by the termination of the dealer agreement. The Court of Appeal therefore rules that the termination is null and void and unlawful and has therefore had no effect. As a result, the Court of Appeal ordered the manufacturer to resume supplying the full range of products to the relevant dealer.
The general lesson that can be drawn from this judgment is that both direct and indirect resale price maintenance is out of the question and will not be tolerated.
Ludwig & Van Dam franchise attorneys, franchise legal advice
Other messages
Legal Franchise Statistics 2019: slight decrease in number of franchise disputes
In 2018, 44 judgments were published on Rechtspraak.nl, 12 of which were appeal cases and one in cassation (a prognosis issue against Albert Heijn).
Article De Nationale Franchisegids: “Judge again rules in favor of Domino’s franchisees” – dated September 3, 2019 – mr. RCWL Albers
At the beginning of 2018, almost all franchisees of Domino's and the Association of Domino's Pizza Franchisees submitted two issues to the court in Rotterdam.
Article De Nationale Franchisegids: “The interim termination of the franchise agreement” – August 12, 2019 – mr. JAJ Devilee
A franchise agreement can end prematurely in many ways.
Article De Nationale Franchise Gids: “Parliamentary questions asked about (false) self-employment franchisees” – dated 24 July 2019 – mr. M. Munnik
Parliamentary questions have recently been asked about the so-called bogus self-employment within the relationship between franchisor and franchisee.
Article Franchise+: “With our franchise formula you will earn mountains of gold.” dated 10 July 2019 – mr. AW Dolphin
The distinction between permissible promotions and misleading information remains a gray area, despite the relevant legislation.
Franchisee may purchase a range of foreign products after mandatory formula change – June 6, 2019 – mr. JAJ Devilee
The District Court of East Brabant recently dealt with an important matter in preliminary relief proceedings in which a franchisee was completely involuntarily forced to adopt an alternative formula.