United States: The “Top Ten” Things For A Supplier To Consider In Terminating A Distributor


Regardless of labels like “dealer,” “distributor” or “reseller,” there are some fundamental issues that demand attention whenever a supply relationship is involuntarily terminated. We work with suppliers in planning and implementing decisions to terminate. We also successfully defend these decisions through negotiation, litigation or alternative dispute resolution. We have litigated termination disputes under various state and federal laws and have appeared in state and federal courts and before arbitration panels throughout the country to successfully defend termination decisions.

Based on our extensive, actual “battle experience,” we offer the following ten areas of concern to bear in mind when contemplating an involuntary termination:

1. Keep termination planning communications confidential. Generally, all documents and communications, including e-mails, within a company regarding the performance of a distributor and the decision and plan to end the relationship are subject to discovery. The only effective way to maintain confidentiality is to work with attorneys who can give advice within the protective shield of the attorney-client privilege....

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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