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ARTICLE · 01 OCTOBER 2004

Corporate Commercial and Litigation Bulletin - Challenges in Distribution: Terminating Dealers and Distributors

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Do you have dealers or distributors who are underperforming or who are not complying with your distributor agreement? Do you wish to change distribution for other reasons? If you do, and if you are considering terminating a dealer or distributor, this article will be of interest to you.

CanadaLitigation, Mediation & Arbitration
W. Brad Hanna, FCIArb.
W. Brad Hanna, FCIArb.
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Do you have dealers or distributors who are underperforming or who are not complying with your distributor agreement? Do you wish to change distribution for other reasons? If you do, and if you are considering terminating a dealer or distributor, this article will be of interest to you.

The Legal and Business Risks of Termination

Terminating any relationship often gives rise to risks and costs. When terminating a dealer or distributor, the risks and costs can be significant. Among other things:

  • The dealer or distributor might claim that you improperly terminated the arrangement and sue forcing you to devote considerable time and resources to defending a lawsuit. Your litigation costs could be substantial.

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