If a distribution agreement is concluded for a definite period, it cannot usually be terminated prematurely. A contract for an indefinite period of time, even if no contractual termination clause has been agreed, can in principle be terminated, according to established case law. However, the requirements of reasonableness and fairness may require that a reasonable notice period be observed. In practice, it often happens that parties have been doing business with each other for years but have not concluded an agreement. This is the case, for example, when successive orders are sent but nothing has been arranged in this regard. Depending on the circumstances of the case, there may be a continuing performance contract. This involves performances that continue for a certain period of time, succeed each other or are repeated. If there is indeed a continuing performance contract, this has consequences for the notice period that must be observed by the party giving notice.
Annelies ten Hove has years of experience in drafting of and litigating about distribution agreements.
