FEATURE
distribution agreement
Does your exposed? leave you By FoxWilliams associate Veronique Bergau
Sometimeswhen a distribution agreement ends the old supplier is leftwith stock,much to the annoyance of its replacement.What do you need to knowto keep things on an even keel?
off the remaining stock that it has been distributing. At the end of the sell-off period,unsold stockmay be required by the agreement to
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distributorship agreement often allows a distributor a certain period of time, following termination of the agreement, in which to sell
be returned to the
supplier.Sometimes the obligation to return stock can be without repayment by the supplier. What, then, are the issues for both supplier and distributor to bear inmind?
Option to buy back On or prior to termination of a distributorship agreement, a supplier
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might have the contractual option to buy back any remaining stock fromthe distributor. Asupplier should consider whether it
wishes to exercise this option.Often the time frame in which to do so is short.Te reasons for wanting to do so can include: If the supplier ismoving into the same territory itmightmake good sense to have
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