It is not uncommon to seek compensation for such information as part of a termination agreement. This may be reflected in a carefully crafted lump sum replacement clause, permitted by California law, provided that the clauses can provide an appropriate estimate for the evaluation of the information. ( Cal. Code Civ. § 1671 (b)) It is obvious that the need for carefully developed clauses and the foresight of how they are reflected with such valuable information as customer lists are essential to the success of the contract and the distribution relationship. Following the annulment of a first judgment by default against the supplier in 2003, the Landgericht dismissed the action in November 2014. In the view of the Landgericht, the termination of the distribution contract did not result in an infringement. In January 2016, the Court of Appeal of the Canton of Zurich annulled the judgment of the District Court. The Court of Appeal found that the contract had not expired automatically and had not been terminated in accordance with its terms and dismissed the case so that the District Court could consider claims for compensation due to non-compliance. The party attempting to terminate the contract must give the other party as much notice as possible.
This notice shall give the other party sufficient time to make further arrangements. In the absence of a specified period of time, as described in the termination clause of the agreement, some states require up to 90 days` notice for the termination of a distribution agreement. The agreement may also require one of the parties to compensate the other for income lost as a result of the termination. Under Turkish law, the conditions for the right of agents to compensation for goodwill are similar to the provisions of the Directive. In addition, the last paragraph is art. In accordance with Article 122 TCC, the applicable provisions also apply to the termination of exclusive distribution agreements and other similar discontinuous contractual relationships which confer an exclusive right, unless this would be contrary to the principle of industry. When it comes to customer transfer, agents and merchants are subject to different regulations. In the event of termination of the agency contract for any reason, the agent is obliged to transfer its clients to the contracting entity within the subject area and to cooperate and support the payer with a view to the implementation of a smooth and efficient transition. In summary, the distributor did not provide evidence of its damage caused by the early termination of the distribution contract or, at the very least, to provide sufficient information to enable the judge to assess the damage suffered. Consequently, the action for damages was dismissed in its entirety, irrespective of the fact that the Court of Appeal had previously found that the distribution contract had been terminated by the supplier in breach of contract. In its decision of November 2017, the Court of Appeal of the Canton of Zurich stressed that a right to compensation for goodwill is mandatory under the conditions described above and cannot be excluded in advance by contract. According to the Court of Appeal, these rules also apply to existing exclusive distribution agreements.
This latest statement by the Court of Appeal of the Canton of Zurich is in the public interest, as suppliers regularly try to exclude goodwill claims in their distribution contracts. However, if the analogous application of Article 418 J of the CO to distribution contracts is justified, the provisions according to which no compensation is due shall be void. . . .