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Distribution agreements and agency agreements are often confused. That’s logical, as there are many similarities. However, there are a number of significant differences between distribution and agency:
In a distribution agreement, parties can lay down agreements on the price the distributor has to pay for the purchase of the supplier’s products and services. However, agreements regarding the resale price (the price the distributor charges for the products of the supplier) are not always permitted.
The supplier is allowed to impose on the distributor a maximum resale price or lay down a recommended price for resale. However, agreements on minimum prices or fixed resale prices are unlawful pricing agreements.
In a termination of an agency agreement, the agent is in principle entitled to clientele compensation (also referred to as goodwill indemnity). This concerns compensation in the event the activities of the agent during the term of the agreement have led to an expansion of the customer base of the principal and the principal is likely to benefit from this expansion after the termination of the agreement.
However, the principal doesn’t owe the agent goodwill indemnity if:
Before concluding a franchise agreement, the franchisor often provides the (potential) franchisee with a sales and profit forecast. When the expectations turn out to be unrealistic and the franchisee had never concluded the franchise agreement had the information been represented correctly, the franchisee is likely to recover the damage suffered from the franchisor.
The damage can be recovered from the franchisor successfully if the franchisor himself has conducted the research regarding the sales and profit forecast or if it was conducted on his behalf by a person he is liable for (for instance, an employee). This can be the case even if he didn’t know that the information was incorrect but the mistakes in the report are due to negligence of the franchisor or the person he is liable for.
When the franchisor contracted a third party for researching and reporting of the forecast, the franchisor may rely on the accuracy of the information provided by the third party. Then, he will in principle not be liable for the damage.
In addition to arrangements regarding the amount of usage fee/lease, the term of the agreement and how it should be terminated, there are other important matters the operator of the main store and the operator of the shop-in-shop have to agree on. Think, for instance, of arrangements about the design, personnel and maintenance of the shop-in-shop.
In a pop-up store agreement there must be clearly laid down that it is entered into for less than two years. To the lease of shop premises, in principle, the same rules apply as to the lease of commercial premises where termination of the agreement is difficult. This is not in line with the flexible nature of a pop-up store, but if a lease is entered into for two years or less these rules do not apply.
In addition to the agreed lease period for the shop premises, on entering into the agreement the parties also have to take into account the following:
With the Dutch Tax and Customs Administration again enforcing the Deregulation of Assessment of Employment Relationships Act (DBA Act), these questions have become even more important. In a recent ruling on Uber drivers, the Supreme Court provided additional guidance on how to determine whether someone is a self-employed person.
The use of general terms and conditions is something companies can no longer do without. Contracting parties refer to their own general terms and conditions in small print, often containing favorable clauses for their own benefit. But what is the power of general terms and conditions? And what should be considered when using them?
It will become even easier to set up a company in the Netherlands. As from 1 January 2024, this can be done entirely online. What will change?
