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Q&A on Distribution Agreements

Part 1: Legislative framework

Q1. Please specify the legislative framework generally applicable to the conclusion and execution of distribution agreements (a)? Please include a link to the official publication of the applicable rules (e.g. relevant link to the Official Gazette) (b) and, if available, to the English translation of the legislative framework (c).

a.  Legislative framework:

Distribution agreements are unspecified agreements under Polish law. Consequently, they are governed by the general provisions of contract law provided in the Polish Civil Code (“CC”), in particular the provisions on conclusion of agreements (Articles 66-72 CC1) and performance of obligations (Art. 353-396 CC). In addition, provisions regulating certain specified agreements may apply depending on the features of the distribution agreements, in particular provisions with respect to sale (Art. 535-602 CC), supply (Art. 605-612 CC), contract farming (Art. 613-626 CC) and consignment (Art. 765-773 CC).

b. Link(s) to official publication:

The Polish version of the CC is accessible via the Internet System of Legal Acts (ISAP).

c. Link(s) to English translation:

No official English translation available. 

Q2. Other than for agency agreements pursuant to Directive 86/653 (EEC) on the coordination of the laws of the Member States relating to self-employed commercial agents, are there specific rules depending on the distribution format (e.g. franchising, exclusive distribution)?

Yes. 

Which specific rules apply (a)? Where available, please also include a link to the official publication of the applicable rules (b) and, if available, to the English translation of the legislative framework (c).

a. Specific rules 

Many distribution systems will be structured based on the standard contracts of sale, mandate or agency. However, in certain particular circumstances the parties may, depending on the type of the intended relationship, decide to enter into one of the more specific types of contract: (1) supply agreement (pol. umowa dostawy), (2) consignment agreement (pol. umowa komisu) and (3) contract farming agreement (pol. umowa kontraktacji). These three types of agreements are named (specified) in the Polish Civil Code.

There are also two other agreements that are worth mentioning in this context: (4) distribution (dealership) agreement and (5) franchising agreement. These agreements have not been named in the Civil Code which gives the parties more freedom over how to structure their relationship. The elements of distribution and franchising agreements have been set out in case law.

1. Supply agreement

By a supply agreement the supplier undertakes to manufacture goods of a specified kind and deliver them in parts or periodically, and the customer undertakes to accept the delivery of the goods and to pay the price. The supply agreement can only cover future goods – goods which are yet to be produced – an which will be delivered in parts or periodically, as opposed to a one-time delivery.

The supply agreement allows the customer to influence and participate in the production process. The customer can monitor the production, choose the supply of materials and the packaging, give guidance and supervise the enforcement of certain standards or guidelines.  

The supply agreement is regulated by Art. 605 to 612 CC.

2. Consignment agreement 

By a consignment agreement the consignee undertakes to, within the scope of her business activity, buy or sell goods for the benefit of the consignor but on her own behalf. The consignee receives a commission. The agreement is most commonly used for the purpose of selling valuable second-hand goods such as cars and home appliances. However, it can prove useful in distribution of high-value goods as it allows the distributor to pay the price of the goods only after reselling them. It is regulated by Art. 765 to 773 CC. 

3. Contract farming agreement 

By a contract farming agreement, the agricultural producer undertakes to produce and deliver to the contracting party a specified quantity of agricultural products of a specified type, and the contracting party undertakes to take delivery of the products within a specified time, pay the agreed price and perform certain additional obligations specified by the agreement or the law. The contracting party has the right to supervise the performance of the contract by the agricultural producer. If the producer is unable to deliver the contract products due to circumstances for which neither party is responsible, then the producer shall be obliged only to reimburse advances and bank credits bank credits.

The contract farming agreement is regulated by Art. 613 to 626 CC.

4. Distribution (dealership) agreement 

A dealership agreement is not specified in the Polish Civil Code. While provisions relating to sale and agency will often apply, the parties will have considerable freedom in structuring their relationship. As explained by the Supreme Court, “the distribution agreement consists of one party - the supplier - agreeing to supply a designated good on an ongoing basis and the other party - the distributor - agreeing to buy that good from the supplier and then sell it to third parties in his name and for his account.” (Supreme Court judgment of 8 December 2016, I CSK 825/15).

In a 2005 judgment the Supreme Court defined additional elements of the distribution agreement including: (i) the exclusivity for the benefit of the distributor, (ii) the distributor must resell the goods for her own benefit and in her own name; and (iii) the resale is supervised by the supplier (judgment of the Supreme Court of 6 July 2005, III CK 3/05). However, it seems that these additional elements are no longer considered key characteristics of a distribution agreement – what is more important is the obligation of the distributor to resell and promote the goods (judgment of the Supreme Court of 15 June 2018, I CSK 494/17).

A distribution agreement should be distinguished from a supply agreement. As explained by the Supreme Court, “the dealership agreement differs significantly from the supply agreement primarily in that its purpose is not only periodical supply of specific goods by the manufacturer for the agreed price to the buyer, but first of all sale of these goods by the buyer in a specific way, promoting them in a specific area or to specific buyers. A significant difference between these agreements is also the fact that in the case of a supply agreement, it is the customer who has the right to control and supervise the production of goods (Art. 608 CC), while in the case of a dealership agreement, as a rule, it is the manufacturer who controls the sale of goods by the dealer and establishes its principles. Proper performance of the agreement by the dealer requires good cooperation of the manufacturer, which above all means [the supplier] refraining from direct sale of the contract goods to the dealer’s customers.” (judgment of the Supreme Court of 6 July 2005, III CK 3/05)

5. franchising agreement 

Like in the case of a distribution agreement, a franchising agreement has not been specified in the Polish Civil Code. Such an agreement will have elements of other specified agreements (in particular mandate agreement, services agreement and licensing agreement). However, the parties are largely free to determine the shape of the agreement (judgment of the Supreme Court of 7 February 2008, V CSK 397/07, see also the judgment of the Court of Appeal of Katowice of 22 December 2017, I ACa 707/17).

A franchising agreement is based on trust. As such, a franchising agreement with elements of a mandate agreement can be terminated without notice where such trust has been irreparably damaged (see judgment of the Cracow Court of Appeal of 30 March 2017, I ACa 711/16).

b. Link(s) to official publication:

The Polish version of the CC is accessible via the Internet System of Legal Acts (ISAP). 

c. Link(s) to English translation:

No official English translation available. 

Q3. Other than general contract law and competition law, are there other rules which may generally restrict the parties when drafting and concluding distribution agreements (e.g. rules in relation to unfair contract terms in B2B contracts, specific requirements in the context of a prohibition of abuse of economic dependence)?

Yes

Which general rules apply (a)? Where available, please also include a link to the official publication of the applicable rules (b) and to the English translation of the regulatory framework (c).

a. General rules 

In the context of distribution contracts, there are two major pieces of legislation that restrict the parties’ freedom of contract in addition to the provisions of the Civil Code:

  • the Act of 8 March 2013 on preventing excessive delays in business transactions (“PEDA 2013”, pol. Ustawa z dnia 8 marca 2013 r. o przeciwdziałaniu nadmiernym opóźnieniom w transakcjach handlowych);
  • the Act of 15 December 2016 on preventing unfair use of contractual advantage in trade of agricultural products and food (“UCAA 2016“, pol. Ustawa z dnia 15 grudnia 2016 r. o przeciwdziałaniu nieuczciwemu wykorzystywaniu przewagi kontraktowej w obrocie produktami rolnymi i spożywczymi); and
  • the Act of 16 April 1993 on the combatting unfair competition (“CUCA 1993”, pol. Ustawa z dnia 16 kwietnia 1993 r. o zwalczaniu nieuczciwej konkurencji).

A summary of the key provisions of these acts is provided below.

1. Key provisions of the PEDA 2013 

The provisions of the PEDA 2013 apply only in B2B transactions. Slightly different provisions apply to public authorities. The key provisions are as follows:

  • Art. 5: where the parties have agreed to a payment term longer than 30 days, then the creditor who is not a large business can demand statutory interest (currently at 3.6%) 30 days after she performed her obligation and delivered the invoice/ receipt. The interest will accrue from the day of the creditor’s performance until payment, but no later than until the payment is due (under the contract);
  • Art. 6: where the parties have not agreed to a payment term, then the creditor has a right, without requesting it, to statutory interest (currently at 5.6%) for delay accruing from the day when she performed her obligation until payment;
  • Art. 7(1): if the creditor (i) performed her obligation and (ii) was not paid within the deadline set in the agreement, then she will have a right to statutory interest for delay in business transactions (currently at 10.1%) accruing from the day of performance until the date of payment;
  • Art. 7(2)-7(3a): a payment deadline can exceed 60 days from the date of delivery of invoice/ receipt only if (i) the parties explicitly agree to a longer deadline in the agreement; (ii) the debtor is not a large business while the creditor is a micro, small or medium business; and (iii) agreeing such a longer deadline would not be blatantly unfair. If a longer deadline is agreed in breach of conditions (i), (ii) or (iii), then the creditor has a right to statutory interest for delay in business transactions, accruing from the date of delivery of the receipt/ invoice until payment. If a deadline longer than 120 days has been agreed in breach of conditions (i), (ii) or (iii) then the creditor can terminate the agreement.
  • Art. 13: contract provisions which limit rights of the creditor and duties of the debtor with regard in particular to interest are void.  
  • Art. 13b prohibits excessive payment delays. An excessive payment delay is defined as a situation where over a period of 3 months, the sum of outstanding or late payments amounts to at least PLN 2,000,000 (approx. EUR 430,000).

The President of the Office of Competition and Consumer Protection can launch proceedings against a business which excessively delays its payments (Art. 13c PEDA 2013). PEDA 2013 gives the President as well as the Commercial Inspection the right to carry out inspections (Art. 13j PEDA 2013). Hindering an inspection as well as failure to provide information can result in a fine of up to 5% of income obtained in the previous financial year but no more than EUR 50,000,000.

If the President concludes that the undertaking excessively delayed payment, it can impose a fine calculated based on the amount of payment that was outstanding or late, the number of days when the payment was outstanding and the statutory interest rate for delay in business transactions. As of September 2021, the highest fine in proceedings concerning excessive payment delays was PLN 426,587.62 (approx. EUR 92,407) imposed on 15 February 2021 on Havi Logistics in decision DZP-3/2021.

2. Key provisions of the UCAA 2016

The ACAA 2016 prohibits unfair use of contractual advantage in relations between suppliers and purchasers of foodstuff, where such an abuse has or could have effects on the territory of Poland (Art. 1 and Art. 2 UCAA 2016).

The ACAA 2016 adopts the definition of foodstuff set out in Regulation 178/2002 of the Council and the Parliament (Art. 5(3) UCAA 2016). Under that definition, foodstuff means any substance or product, whether processed, partially processed or unprocessed, intended to be, or reasonably expected to be ingested by humans, to the exclusion in particular of plants prior to harvesting and feed.    

Contractual advantage is understood as “considerable disproportion in the economic potential” between the parties (Art. 7(1) UCAA 2016).

The use of contractual advantage will be unfair where it is contrary to good practices (customs) and it threatens or prejudices an important interest of the other party (Art. 7(2) UCAA 2016). Examples of unfair use of contractual advantage include (Art. 7(3) UCAA 2016):

  • unjustified termination of the agreement or threatened termination of the agreement;
  • the conferral on only one party of the right to terminate or renounce the contract;
  • making the conclusion or continuation of the agreement dependent on the acceptance or performance by one party of an obligation which is not connected to the subject matter of the agreement either materially or customarily;
  • unjustified extension of deadlines for payment for delivered agricultural or food products, in particular in breach of the provisions of the PEDA 2013.

The President of the Office of Competition and Consumer Protection can launch proceedings against a business which uses its contractual advantage in an unfair manner (Art. 8 and 9 UCAA 2016). UCAA 2016 gives the President the right to demand information and documents (Art. 14 UCAA 2016) and carry out inspections (Art; 16-19 UCAA 2016). Failure to provide the requested information or obstructing the inspection can result in a fine of up to EUR 50,000,000.

The President can also impose a fine for unfair use of contractual advantage in the amount of up to 3% of turnover realised in the preceding financial year (Art. 33 UCAA 2016). As of September 2021, the largest fine for unfair use contractual advantage amounted to PLN 723,381,476.56 (approx. EUR 157m) imposed on Jeronimo Martins Polska (the owner of Poland’s largest supermarket chain).

3. The CUCA 1993 

The CUCA 1993 is a private law Act, allowing a harmed entrepreneur to seek compensation or other measures in court. An act of unfair competition is defined as an act contrary to the law or morality which threatens or prejudices the interests of another entrepreneur or the customer (Art. 3(1) CUCA 1993). The Act provides a non-exhaustive list of examples of unfair competition which includes in particular: misleading indication of the geographical origin of the goods or services, false or fraudulent indication of the geographical origin of the goods or services, infringement of business secrets, inducement to dissolve or breach of contract, imitation of products, slander or unfair praise, obstructing access to the market, bribery of a person exercising a public function, as well as unfair or prohibited advertising, organising a system of pyramid selling, operating or arranging activities in a consortium system and unreasonably extending the payment period for goods or services supplied.

In the context of distribution agreements one provision is particularly relevant. Art. 15(1)(4) CUCA 1993 prohibits charging fees other than the margin for accepting a product for the purpose of reselling it. This provision has been extensively litigated in circumstances where retailers and cash & carry markets charged their suppliers a fee for placing the product in a manner more visible to the customer (e.g. on the eye-level shelf, by the till or at the end of any aisle). 

b. Link(s) to official publication:

The Polish version of the PEDA 2013, the ACAA 2016 and the CUCA 1993 is accessible via the Internet System of Legal Acts (ISAP).

c. Link(s) to English translation:

No official English translation available. 

 

Part 2: Pre-contractual phase

Q4. Are there mandatory provisions in relation to the disclosure of pre-contractual information prior to concluding and/or executing distribution agreements?

No. 

Q5. Is there a standstill obligation linked to the requirements imposed for the pre-contractual phase?

No.

Q6. Does the relevant regulatory framework impose sanctions if the pre-contractual obligations are not (fully) respected?

Yes. 

Which sanctions are applicable (e.g. nullity of contract, penalty payment)?

If the parties have not by contract excluded Art. 546 CC, then failing to provide the required information may lead to:

  1. a claim for compensation for loss incurred by the non-infringing party (under Art. 471 CC);
  2. rescission of the contract by the non-infringing party (under Art. 84 or 86 CC);
  3. a claim for compensation for the buyer, even if the loss was caused by circumstances for which the seller is not responsible, in particular: reimbursement of the costs of entering into the agreement, the costs of collection, carriage, safekeeping and insurance of the goods, reimbursement of the expenses incurred in so far as he did not benefit from them and was not reimbursed by a third party, and reimbursement of the costs of the court proceedings (Art. 574 CC).

Q7. Can a party be held liable if it terminates the precontractual negotiations?

Yes.

On what grounds (a); under what conditions (b); and what consequences are generally linked to such liability (c)?

a. Grounds of pre-contractual liability 

Art. 72, paragraph 2 CC.

b. Conditions for pre-conctractual liability

A party to the negotiations will be liable if she commenced or conducted negotiations in breach of good morals, in particular without the intention to conclude an agreement.

Thus, the first requirement of liability is commencing or conducting negotiations. As a minimum, negotiations are understood as interactions (communications) between the parties.

The second condition of precontractual liability is breach of good morals. This will in principle include any acts of disloyalty towards the other party. This could include the following: (i) in a specific case, withdrawal from advanced negotiations without giving any reason or for an insignificant reason; (ii) intentional delay of negotiations; (iii) hindering negotiations by misleading the counterparty; (iv) deliberate submission of proposals that are unacceptable to the other party; (v) unreasonable refusal to disclose information essential for the negotiations. This condition will be fulfilled also where the liable party entered into the negotiations in compliance with good morals, but these circumstances changed while the negotiations were ongoing. By contrast, this condition will not be met where a party makes clear at the outset of the negotiations that she does not intend to conclude an agreement but rather seeks to explore the possibility of reaching such an agreement or its terms.

There is some controversy as to whether fault is a condition for precontractual liability. It seems that the subjective element will be relevant at least in some cases of disloyalty, e.g. intentional delay or deliberate submission of unacceptable proposals.

c. Consequences of pre-contractual liability 

The infringing party shall be obliged to compensate the damage incurred by the other party due to the fact that the latter expected to conclude an agreement. In other words, the non-infringing party should be compensated for the damage resulting from failed negotiations. Importantly, the damages are not intended to compensate for the fact that the agreement was not concluded.

Q8. Are there other relevant rules and/or restrictions that apply during pre-contractual negotiations between supplier and distributor? 

No.

 

Part 3: Contractual phase

A. Form of distribution agreements

Q9. Must a distribution agreement be executed in writing to be valid and enforceable?

Only in certain instances

Please explain when a written agreement is required.

Sale of goods does not require any special form, but the parties are free to agree on a particular form.

A contract farming agreement should be executed and signed in writing (Art. 616 CC). Failure to execute the agreement in writing will not render the agreement void but rather prevent the parties from producing witness testimony as evidence of the agreement at court (Art. 74, paragraph 2 CC). However, under Art. 74, paragraph 4 CC this effect will not extend to agreements where both parties are entrepreneurs. Thus, for practical purposes, there is no requirement of signed writing where a contract farming agreement is made between two entrepreneurs.

Similarly, a supply agreement also needs to be confirmed in writing (Art. 606 CC). There is no consensus but most legal scholars agree that this requirement corresponds to the requirement of signed writing and consequently it will effectively not apply where both parties are entrepreneurs.

Q10. Are there any (other) requirements as to the form of the distribution agreement for it to be valid and enforceable?

No.

B. Content of distribution agreements

Q.11 Other than restrictions imposed by EU competition law (including Regulation (EU) 330/2010), do specific rules and/or restrictions apply in distribution agreements with respect to

  • the territory in which or the customers to whom the goods/services will be sold;
  • an exclusivity granted to the distributor;
  • (exclusive) sourcing/purchasing obligations;
  • resale prices;
  • non-compete clauses

None of the above are applicable.

Q12. Do specific rules and/or restrictions apply in distribution agreements with respect to

  • obligations of the supplier vis-à-vis the distributor, including in relation to the remuneration of the distributor;
  • obligations of the distributor vis-à-vis the supplier or vice versa;
  • a non-solicitation clause during and/or after the term of the distribution agreement;
  • minimum sales quota imposed on the distributor;
  • specific sector rules?

Yes, there are specific rules regarding (i) obligations of the supplier vis-à-vis the distributor, including in relation to the remuneration of the distributor, (ii) obligations of the distributor vis-à-vis the supplier or vice versa and (iii) specific sector rules. 

What do these specific rules and/or restrictions entail? 

See, Q5 for rules applicable in the food sector and payment deadlines.

The Parties are in general free to determine their obligations as they see fit, as long as the content or purpose of the relationship does not contradict the nature of the relationship, the law or the principles of social coexistence (Art. 3531 CC). For example, where the parties grant the supplier extensive rights to supervise and instruct the distributor, this could be contrary to the very nature of a distribution agreement which presupposes that the distributor will resell the contract goods in his own name and for his own benefit. As a result, the agreement could be construed as e.g. an agency agreement, with the relevant provisions of the Civil Code applying. Equally, it would be contrary to the nature of the relationship to impose a non-disclosure obligation with respect to information that is publicly available.

Per Art. 56 CC, a legal action has not only the effects expressed in it, but also those arising from the law, rules of social coexistence and established customs. Moreover, under Art. 355, paragraph 1 CC, the debtor is obliged to act with the care customarily due in relations of the particular kind. These two provisions give rise to a general obligation of the contract parties to act loyally. The detailed scope of this obligation will depend on the circumstances of each case. For example, it may translate into an obligation to keep the other party informed or to protect the reputation of the product distributed.

In addition, where distribution is carried out based on a sale agreement, the following mandatory provisions are relevant:

  • under Art. 551 CC if a distributor is delaying the collection of the item sold, the supplier can put that item into storage at distributor’s cost and risk and, after setting an additional deadline for the distributor, sell the item at her cost;
  • under Art. 5761 CC a distributor who compensated a consumer for a product which was not fit for purpose or did not comply with qualities publicly announced, then that distributor can seek compensation from the supplier (or another undertaking in the supply chain) that was responsible for the product being unfit.

Furthermore, unless agreed otherwise, the parties are obliged to keep confidential the information obtained during negotiations and refrain from using it for their own purposes (Art. 721, paragraph 1 CC).  Failure to comply with this obligation will give the non-infringing party the right to seek compensation or to demand the benefits thus obtained by the infringing party (Art. 721, paragraph 2 CC). In addition, failure to protect confidential information of the other party can constitute an act of unfair competition under Art. 11 of the Act for the combatting of unfair competition. The infringing party would be liable for compensation for the loss resulting from the publication of the information.

For statutory rights and obligations of the parties to a consignment agreement, see Art. 766-772 CC.

Otherwise, rights and obligations commonly included in distribution agreements (e.g. the distributor’s obligation to follow supplier’s reasonable instructions or the supplier’s right to inspect and supervise the distribution) will have to be explicitly provided for in the agreement.

C. Term and termination

Q13. Are there particular rules and/or restrictions in relation to the term (incl. renewal) of distribution agreements?

No

Q14. Are there any specific rules and/or restrictions with respect to the termination of distribution agreements (e.g. minimum notice period, statutory right to compensation (goodwill or other))?

No.

What do these specific rules and/or restrictions entail (a)? Please include whether these specific rules and/or restrictions differ depending on whether the distribution agreement is of definite or indefinite duration (b) or whether the distribution agreement is terminated by one party for convenience or for breach by the other party (c).

a. What do these specific rules and/or restrictions entail? 

There are no rules or restrictions on term or termination applicable specifically in the context of distribution agreements. Hence, the parties’ freedom of contract is restricted only by general principles of contract law as well as provisions on specific (named in CC) agreements, provided that the distribution agreement at hand can be classified as such a specific agreement.

General principles of contract law with respect to termination

The parties can terminate an agreement by mutual consent. Equally, the parties can provide directly in the agreement the right to terminate (Art. 395 CC).

Art. 3651 CC provides that „a continuous obligation of an indefinite duration shall terminate upon notice by the debtor or creditor in accordance with contractual, statutory or customary notice period or, in the absence of such a period, immediately upon termination.”

When determining whether the agreement has been rightfully terminated, the court will have regard to the circumstances of the case, the principles of social coexistence and customs (Art. 56 and 65 CC).

Under Art. 77, paragraph 2 CC, if an agreement was concluded in signed written form, documentary or electronic form, its termination with the consent of both parties, as well as withdrawal from it or its termination requires a documentary form, unless an Act of Parliament or the agreement stipulates another form. Documentary form requires that the declaration of will be made in a document in a manner that makes it possible to determine the person making the declaration (see, Art. 772 CC). A document is an information carrier enabling one to get acquainted with its contents, e.g. email or a text message (see, Art. 773 CC). Moreover, pursuant to Art. 77, paragraph 3 CC, where the agreement was concluded in a different special form, termination should be made in signed written form.

Rules applicable depending on characterisation of the agreement

A distribution agreement could in principle be classified as a reciprocal agreement (see judgment of the Supreme Court of 15 June 2018, I CSK 494/17). As a result, the following grounds for termination would apply:

  • termination for delay (Art. 491-492 CC),
  • termination due to renunciation by the other party (Art. 4921 CC),
  • termination due to impossibility of performance for which the other party is responsible (Art. 493 CC).

Where and to the extent that a distribution agreement is found to constitute a sale agreement, the following provisions will apply in addition to the provisions applicable to reciprocal agreements:

  • termination for delay in payment (Art. 552 CC);
  • termination due to the object of the sale having a non-insignificant defect (Art. 560 CC).

Where and to the extent that a distribution agreement is found to constitute a supply agreement, the following provisions will apply in addition to the provisions applicable to reciprocal agreements:

  • right for the recipient to terminate for delay in starting production so serious that it indicates that the supplier will not meet the delivery deadline (Art. 610 CC);
  • right for the recipient to terminate if the production process is defective or contrary to the agreement (Art. 611 CC).

Where and to the extent that a distribution agreement is found to constitute a contract farming agreement, the contracting party has a right to terminate due to the object of the agreement having a significant defect (Art. 621 CC).

It is controversial whether and to what extent distribution agreements can be considered mandate agreements given that the distributor will be purchasing and reselling the goods in his own name and for his own benefit. However, provisions on mandate agreements can sometimes apply, in particular with regard to franchising agreements or agreements for promotional services, which often accompany distribution agreements.

In case of mandate agreements, Art. 746 CC in principle provides that both the mandator and the mandatee are free to terminate the mandate whenever they please. However, the mandator should reimburse the mandatee for the costs incurred with respect to the mandate and pay the fee due, if a fee was agreed. Moreover, where the mandate is terminated without an important reason, the mandator is liable for compensation for the damage caused to the other party. The same principle applies to the terminating mandatee provided that the mandate was for a fee. Neither of the parties can renounce in advance her right to terminate the agreement for an important reason.

b. Differences dependent on whether the distribution agreement is of definite or indefinite duration

Legal literature states that a distribution agreement for a definite period can be terminated only before the end of the term if the parties have explicitly provided for it in the contract. It is controversial whether an agreement for a definite duration can be terminated without important reasons.

c. Differences dependent on whether the distribution agreement is terminated by one party for convenience or for breach by the other party

See, Q14 a. here-above.

Q15. Is it possible to terminate the distribution agreement based on certain grounds for termination (breach or other) included in the distribution agreement?

Yes.

If yes, is prior judicial intervention required in order for the termination of the agreement to take effect?

No.

 

Part 4: Post-contractual phase

Q16. Is the supplier required to repurchase the stock that is still at the distributor’s disposal when the distribution agreement ends?

No.

Q17. Are there other post-contractual obligations that generally apply to either of the parties in the context of the termination of the distribution agreement?

No.

 

Part 5: Dispute resolution

Q18. Do specific rules and/or restrictions apply as regards the choice of forum and/or jurisdiction?

No.

Q35. Can the parties opt for arbitration?

Yes.

Q19. If yes, are there any rules and/or restrictions as regards the enforceability of arbitration clauses in distribution agreements?

No.

Q20. What is the statute of limitations applicable to claims regarding the performance of a distribution agreement?

The applicable limitation period will depend on how the distribution agreement is qualified depending on its features and obligations of both parties (Supreme Court judgment of 19 January 2012, IV CSK 201/11). Where the agreement is dominated by features typical to a sale agreement, Article 554 CC will apply (Supreme Court judgment of 14 January 2010, IV CSK 319/09). Accordingly, the limitation period will be 2 years. The same limitation period will apply to supply agreements by virtue of Art. 612 CC.

Claims based on a contract farming agreement will become time-barred 2 years after the agricultural producer performed her obligation or, if the obligation has not been performed, 2 years after she should have performed it.

The general limitation periods provided in Art. 118 CC shall apply to a consignment agreement. Under that provision, claims arising out of business commercial activity become time-barred after 3 years.

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