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
Fine for franchisor because aspiring franchisee is foreigner
On 5 July 2017, the Council of State, ECLI:NL:RVS:2017:1815, decided whether, in the case of (proposed) cooperation between a franchisor and a prospective franchisee, the franchisor
Article in Entrance: “Company name”
“I came up with a wonderful name for my catering company and incurred the necessary costs for this. Now there is another entrepreneur who is going to use almost the same one. Is that allowed?"
The bank’s duty of care in franchise agreements
On 23 May 2017, the Court of Appeal in The Hague, EQLI:NL:GHDHA:2017:1368, had to rule on the question whether the bank should have warned a prospective franchisee in connection with the
Article in Entrance: “Standing up”
“Can I fire an employee with immediate effect if he steals something trivial, such as food that has passed its expiration date?”
Arbitration clause in franchise agreement sometimes inconvenient
On 20 July 2016, the District Court of Gelderland, ECLI:NL:RBGEL:2016:4868, ruled on the validity of an agreement in a franchise agreement, whereby disputes would be settled
Supermarket letter – 18
Can an entrepreneur be obliged to operate a different supermarket formula?