- Fiduciary Duty Exist Between Entrepreneurs and Sales Representatives - Distribution Law
- September 18, 2013
- Law Firm: GRP Rainer LLP - Office
- Under certain circumstances, the principles of loyalty between an entrepreneur and an official distributor can also be applied to the relationship between an entrepreneur and a sales representative.
GRP Rainer Lawyers and Tax Advisors in Cologne, Berlin, Bonn, Bremen, Dusseldorf, Essen, Frankfurt, Hamburg, Hanover, Munich, Nuremberg, Stuttgart and London - www.grprainer.com/en conclude: In its decision of September 14, 2012 (File No. I-16 U 77/11), the Superior Court (OLG) of Düsseldorf ruled that the principles of loyalty between an entrepreneur and an official distributor can under certain circumstances also be applied to the relationship between an entrepreneur and a sales representative. This at least is said to be possible when the existing differences in legal relationships are taken into account.
Whether the entrepreneur can appoint another distribution partner in the field of his contractual partner without breaching his loyalty under the relationship entrepreneur/sales representative would have to be weighed against a large number of criteria. Yet entrepreneurial discretion must not be completely disregarded in the evaluation.
The court ruled that the entrepreneur also has a duty to support and have consideration for a sales representative. The limits of loyalty are to be determined in each case by means of interpreting the contents of the contract.
To understand all facets of distribution law, various legal standards must be taken into account. For example, provisions regarding distribution law are found not only in the Civil Code (BGB) and the Commercial Code (HGB), but also in the relevant regulations regarding the laws of competition and monopolies as well as in international law. Furthermore, contractual relationships may result in loyalties and similar obligations. To truly satisfy all these, a lawyer is usually necessary.
A lawyer can develop contracts with sales representatives and official distributors, general terms and conditions or franchise contracts, and he can review aspects pertaining to the law of competition and licencing for the distribution relationships in question. Furthermore, a lawyer experienced in distribution law will support entrepreneurs and sales representatives in solving problems with already existing business relationships.