Confectionery manufacturers frequently distribute their products via so called distributors, primarily in the distribution abroad. These are independent distribution companies, which purchase the goods in their own names and on their own account from the manufacturer and resell them to their own customers.
In the course of the cooperation the distributor builds a customer base. Frequently, a dispute occurs at the contract termination as to whether the manufacturer has to pay compensation to the distributor for the manufacturer being able to continue to supply this customer base in the future, either in direct business or through other distribution companies. Frequently, an amount totaling an annual margin is claimed. It can therefore involve quite significant amounts.
If German law is to be applied to the distributorship agreement, such a claim can result from a corresponding application of commercial agency law. Section 89b Commercial Code provides for a compensation claim for commercial agents.
The case law applies the standard accordingly to distributors. This is the case, however, only if two conditions are satisfied:
(1) On the one hand, the distributor must be intensively integrated into the sales organization of the manufacturer. Whether this feature is satisfied, is determined by means of a number of individual criteria. For example, instruction and control rights of the manufacturer or storage and training obligations of the distributor thereby play a role. The overall view is decisive.
(2) In addition, the distributor must be required to transfer the customer base to the manufacturer. That means that an obligation must arise from the contract, on the basis of which the distributor has to provide the manufacturer with the essential customer data. The claim frequently fails because of this feature. In the legal literature it has long been disputed whether it is correct to require such a contractual obligation. It is asserted that a merely de facto knowledge of the customers would have to suffice. For also due to this de facto knowledge the manufacturer could ultimately substitute himself for the previous distributor. The Federal Court of Justice also decided again in 2015, however, that this feature must in any case exist as a rule.1 Manufacturers, who want to prevent the occurrence of a compensation claim and attach no importance to learning customer identities, should therefore design their contract such that no duty of the distributor arises from it to disclose customer identities. What if the manufacturer would like to use the customer data in any case during the term of the distributorship agreement, for example, by direct mailing, however? Here the Federal Court of Justice has shown a way out.2 Accordingly, no compensation claim is triggered, if the contract indeed provides for an obligation to name the customers, however, the manufacturer is obligated to delete and to discontinue using the customer data after the contract termination.
Frequently manufacturers simply exclude the compensation claim for the commercial agent or distributor. This is always invalid in respect to commercial agents operating in Europe, however, which is often unrecognized. In the case of distributors it must be differentiated where the latter is working. Depending on site of operation such a regulation can be valid or invalid. Regulations concerning the amount of the compensation claim are also problematic. These can be “partially invalid”. This means that the commercial agent or distributor can invoke the regulation – if it is advantageous particularly to him – , while the manufacturer cannot invoke it – if it were advantageous to him.
1 Two decisions dated 02/05/2015, Cases VII ZR 109/13 and VII ZR 315/13.
2 Decision dated 02/05/2015, Case VII ZR 315/13.