Section 17.17 No Franchise Agreement or Opportunity. The parties are independent contractors and nothing in this Agreement shall be construed or constructed as the creation of a joint venture, employment, partnership, agency relationship, business opportunity or franchise between Seller and Primary Distributor. Neither party has the right, authority or authority under this Agreement to act on behalf of the other party or to create any express or implied obligation. Each Party assumes responsibility for the actions of its personnel under this Agreement and is solely responsible for their day-to-day supervision, management and control, rates of pay, source deductions, disability benefits or the manner and means by which work is performed under this Agreement. Unless otherwise specified in this Agreement, it is at the sole discretion of the Primary Distributor to determine the Primary Distributor`s operating methods, the Primary Distributor`s accounting practices, the type and amount of insurance, the Primary Distributor, the practices of the Primary Distributor`s staff, the Primary Distributor`s marketing and advertising, the Primary Distributor`s customers, and the Distributor`s areas and methods of service. main. The relationship thus established between the parties is exclusively that of the supplier and the distributor. If any provision of this Agreement is deemed to create a franchise or business opportunity relationship between the parties, the parties will negotiate in good faith to modify this Agreement so that the original intent of the parties is implemented as accurately as possible in a mutually acceptable manner so that the transactions contemplated in this Agreement are incorporated as a distribution agreement and not as a franchise agreement or business opportunity. be completed.
If the answers are not included in the distribution contract itself, the dealer and the supplier will have to agree after the termination of the contract, which in most cases is impossible due to disrupted business relationships. In practice, the failure to resolve these issues usually leads to disputes. On the other hand, if the supplier does not wish to file a trademark application, and the reseller does so in his name and on his behalf (for quite legitimate reasons), the supplier may find himself in a situation where the supplier has permanently lost his intellectual property rights in the territory. In any case, at the end of the distribution contract, these situations give rise to numerous disputes between former partners, which always prove to be too costly. Apart from this, at the beginning of distribution, the distributor often invests significant funds in the promotion of products and the creation of a brand, often in the hope that it will remain the exclusive distributor for the agreed territory. The distribution contract is extremely useful for both parties, as it allows the merchant and the supplier to clearly define their rights and obligations in advance and to find solutions to possible problems that may arise in the performance of the contract (for example. B, damage to goods, non-payment of the contractually agreed price, use of intellectual property, dispute resolution, etc.). By offering the Safety Products Solutions range through the Ready Rack distribution network, we can reach more customers through trusted distributors.
We know that there is an overlap between distributors who currently offer Solution Safety products. The teams at Solution Safety Products and Groves worked hard to ensure a smooth transition from ordering to item fulfillment. As of December 15, 2019, all CitroSqueeze(R) and SC-14(R) products must be purchased from the groves distribution network. To ensure excellent ongoing support, the Security Product Solutions and Groves teams are available to answer questions about the transition and future products. Although the duration of the distribution agreement is primarily a commercial issue on which traders and suppliers should agree, it is important to comply with the provisions of the Competition Protection Act, especially in the case of the conclusion of the exclusive distribution agreement. Agreements between market participants which aim at or lead to significant restrictions, infringements or measures prohibiting competition shall also be prohibited and void. The exclusive distribution agreement restricts the nature of the competition. However, in some cases, there are exceptions to this prohibition. In order not to infringe the provisions on non-compete obligations, it is important to consider whether it is possible, in the specific case, to request legally permissible exceptions. Having determined that it is even better to conclude the distribution contract before the start of commercial cooperation, the following question must be answered: What is the purpose of the distribution contract? In the case of an exclusive distribution agreement, the trader is the only one authorized to sell goods in a specific territory. On the other hand, in the case of a non-exclusive distribution contract, the supplier may have several resellers in the same territory. This may be the first issue where the dealer and supplier may have disagreements.
In particular, the distributor`s interest is that the distribution contract is exclusive. The reason for this is obvious, the distributor will incur many costs to start distribution (advertising, buying products from suppliers, etc.), and the distributor wants to ensure that there are no other distributors and importers for whom the expected revenues will be reduced. On the other hand, a non-exclusive distribution agreement is much more suitable for the supplier. When a business relationship with a distributor „goes wrong“, they can always rely on another distributor and ensure that the supplier provides a specific market for their products. .