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Delivery contract termination – right to compensation

If a supplier ends a long-term supply contract by giving notice, the shock is often deep. What worked well for the company no longer seems to be enough for the supplier. In particular, the company then asks itself what about the right to compensation if the delivery contract is terminated. Suppliers then often argue that restructuring is necessary. In practice, this often means thinning out the dealer network and thus terminating a large number of supply contracts and dealer relationships. If you and your company are affected by such a termination, the following questions arise: Is the company entitled to a delivery claim, is the termination invalid, for example for anti-trust reasons? If the supply contract and the ongoing business relationship with my supplier are terminated, can the company claim compensation such as a commercial agent and compensation?

Delivery contract termination – judgment of the OLG Hamm dated May 14, 2020

To answer these questions, I will use commercial law as a specialized lawyer below and also refer to a new decision by the Hamm Higher Regional Court (OLG Hamm) dated May 14, 2020, Az: 18 U 93/19. This judgment of the OLG Hamm particularly addresses the important question of how a dealer relationship (authorized dealer) is to be distinguished from a pure buyer-seller relationship (proprietary dealer). As a rule, only an authorized dealer is entitled to a claim for compensation and damages, whereas an own dealer is not.

The guiding principles of the decision of the Higher Regional Court Hamm are as follows:

1. The qualification as an authorized dealer – im Difference to the proprietary dealer – the integration or inclusion of the dealer in the sales network of the manufacturer or supplier, a sales obligation of the Company and a right of the supplier to issue instructions.

2. A continuing obligation in the form of an ongoing one The business relationship that has now been terminated can be classified as a “statutory Obligation without a primary obligation to perform “, namely as a” business Contact ”, which establishes special protection obligations. A breach of duty such a continuing obligation cannot, because of a premature, not termination of the Delivery and the delivery contract come into consideration. So it is not required that a specific delivery contract has been concluded. It is enough a mere business contact that lasted for a long time.

Compensation claim in the event of termination of the delivery contract

In relation to the compensation claim of an authorized dealer, the judgment of the OLG Hamm essentially repeats the prerequisites from previous jurisprudence. A company that is not a commercial agent can only demand a compensation claim (§89b HGB) if the legal relationship between an authorized dealer and the manufacturer or supplier is not reduced to a mere buyer-seller relationship.

Rather, what is required is that the authorized dealer was integrated into the sales organization of the manufacturer or supplier in such a way that he has to perform tasks that are economically significant to a considerable extent as the commercial agent. This is the case if he had to act like a commercial agent for the distribution of the supplier’s products and was subject to duties that are typical for a commercial agent. It is therefore crucial that the company has given up a significant part of its entrepreneurial freedom by assuming the contractual obligations.

The big controversial question in practice is regularly whether there is an authorized dealer in this sense or just a supply contract with an own dealer. An authorized dealer contract requires a framework agreement concluded for a certain period, through which the authorized dealer undertakes to sell the manufacturer’s or supplier’s goods in his own name and for his own account – in this respect it is comparable to a proprietary dealer. In contrast to the proprietary dealer, this authorized dealer agreement also integrates the authorized dealer into the sales organization of the manufacturer or supplier and subjects the manufacturer to a distribution obligation and the right to issue instructions.

Inclusion in the sales organization

If a company wants to claim compensation, it has to prove that it is an authorized dealer. It is an authorized dealer if it is integrated into the sales organization of the supplier, is obliged to sell the contractual products and the supplier is allowed to issue product- or activity-related instructions to the company for the manner of sales. The proprietary trader, on the other hand, is free to decide whether he sells and sells the purchased goods at all and, if so, how. In addition, integration into the sales organization of the manufacturer or supplier is required. First of all, this presupposes that such a system exists at all.

Sales promotion measures such as advertising, trade fair visits or the payment of listing fees do not automatically mean such integration. These are behaviors that a proprietary dealer or an authorized dealer basically already undertakes in their own interest in order to increase their sales. Even an exclusive purchase obligation is generally not sufficient for the assumption that the authorized dealer has to perform the duties of a commercial agent. Proof is required that the company was obliged to actively pursue the sale.

Indications for the position of a company as an authorized dealer are the allocation of a certain sales area, the granting of exclusive distribution rights for a certain area or customer groups, a non-competition clause and in particular information and reporting obligations.

Requirements for inclusion

The courts always check whether these requirements are met on a case-by-case basis on the basis of the contractual agreements. Non-compete obligations, reporting obligations, or storage obligations are usually strong indicators of a position as an authorized dealer. The sole use of designations in correspondence with third parties, in particular customers of the company, is not sufficient. An exclusive or exclusive right of distribution for a certain area is in itself not a sufficient indication of a contract dealer relationship, if it is not connected with the assumption of a distribution obligation or a binding instruction. Take happy by mail or contact me by phone for an initial consultation.

The For the compensation claim, the authorized dealer must also be obliged to Manufacturer or supplier to transfer its customer base, so that this at the end of the contract the advantages of the customer base immediately and easily can make usable. The dealer’s obligation to Transfer of the customer base not expressly and directly from the result in a written dealer agreement; it can also come from others, the Duties imposed on authorized dealers follow.

The commission agent is a special case. A company is a commission agent if it is constantly entrusted with the sale of goods in its own name and for the account of the supplier or manufacturer, so that it participates in the economic success solely in the form of an agreed fixed commission, and the goods at specified prices and Has to distribute conditions. In such a case, there is no (separate) contractual obligation to transfer the customer base, because this transfer obligation is already regulated by law.

Delivery contract termination – right to compensation

If there is no authorized dealer relationship, it will be difficult for companies to assert claims for damages due to the termination of the business relationship. In the case of an ongoing business relationship without a written delivery contract, however, there is a continuing obligation. Such a continuing obligation can be described as a “statutory obligation without a primary obligation to perform”, namely as a “business contact” within the meaning of Section 311 Para. 2 No. 3 BGB, the special protection obligations according to § 241 para. 2 BGB justified. The OLG Hamm stated this in its judgment of May 14, 2020.

However, the OLG Hamm does not go so far as to see the termination of the delivery contract and the cessation of deliveries to the company as a violation of such an obligation to protect. A mere business contact does not justify any entitlement to continued uninterrupted delivery. If there is no entitlement to delivery, the failure to deliver cannot constitute a breach of duty that would justify claims for damages.

At most, a breach of duty due to a premature termination of the delivery, which does not sufficiently take into account the interests of the claimant, in the event of the termination of the delivery contract. A breach of duty therefore only exists if the manufacturer or the supplier ceases to deliver without notifying the company of the impending termination of the delivery contract and the termination of the delivery for a specific point in time. According to this decision of the OLG Hamm, the supplier can therefore be obliged to adhere to a deadline for terminating the delivery contract. This period is usually no more than six months, because a commercial agent or authorized dealer contract can also be terminated with a maximum of six months.

However, there are individual decisions that assume a one-year notice period if the business contact has existed for more than 20 years. According to the judgment of the Higher Regional Court of Hamm dated May 14, 2020 quoted above, in practice a period of notice of six months can now be assumed. A termination of the delivery contract and the cessation of deliveries before this period expires can therefore oblige the company concerned to pay damages.

Delivery claim from antitrust law

However, a right to delivery can result from antitrust law. If the supplier is a leading manufacturer or supplier of contract goods, in particular branded products, he may be obliged to supply other companies. However, these companies have to prove that their range is incomplete without these products, because consumers expect a specialty store to carry these branded products. One then speaks of a range-related dependency. The prerequisite is that the non-delivery equates to the exploitation of a dominant market position in the form of unreasonable hindrance.

The dominant market position does not exist here because the supplier or manufacturer has a market share of more than 40%, but because of its position in relation to the dealers. According to the current legal situation, only small and medium-sized companies can invoke this so-called relative dominant position and product range-related dependency. I would be happy to explain to you whether a delivery claim can generally be considered for your company by mail or by phone. An exception to this is when the supplier operates a selective distribution system, because he can then define criteria himself for dealers who he selects for delivery and sales. In this case, the exclusion of certain dealers is not unreasonable.

Delivery contract termination – this is important now

The judgment of the OLG Hamm essentially confirms the previous case law on the prerequisites for a compensation claim by an authorized dealer. It is necessary that the authorized dealer is integrated into the sales organization of the manufacturer or supplier and is therefore obliged to sell and to comply with sales instructions. In addition, the authorized dealer must be obliged to transfer the customer base to the manufacturer or supplier.

In the case of pure buyer-seller relationships, i.e. proprietary dealers, the OLG Hamm has created legal support for terminated companies. Depending on the duration of this buyer-seller relationship, suppliers and manufacturers are now well advised not to terminate their dealerships immediately or to stop deliveries abruptly, but rather to maintain a certain deadline for the termination of the supply contract. Here you will be able to orientate yourself on the notice periods applicable to commercial agents. Report Please do not hesitate to contact us if you have any questions.

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If you want to use my services as a specialist lawyer for corporate and commercial law, feel free to contact me at any time. My law firm andrelang law can be reached by calling 089/2020 1272, email candrelang@andrelang-law.com or using the online contact form. I look forward to welcoming you soon in my office.

Dr. Andrelang, LL. M.

certified lawyer international trade law

certified lawyer commercial and corporate law