Q&As

If an exclusive distributor for a product is appointed in one country, would the principal manufacturer breach that exclusivity agreement by appointing another reseller in that country if the product is relabelled in some manner so that it appears not to be the same?

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Published on LexisPSL on 09/08/2016

The following Commercial Q&A provides comprehensive and up to date legal information covering:

  • If an exclusive distributor for a product is appointed in one country, would the principal manufacturer breach that exclusivity agreement by appointing another reseller in that country if the product is relabelled in some manner so that it appears not to be the same?
  • Exclusivity
  • Good faith

Whether or not the proposed activity constitutes a breach of contract will depend upon:

  1. the respective definition of 'exclusive' and 'product' within the distribution agreement, and

  2. any restrictions specifically imposed on the manufacturer

That will determine if the proposed action is a breach of the exclusive distribution agreement. For information about the importance of definitions in contracts and general rules of interpretation, see Practice Note: Defining terms.

Exclusivity

The terms 'exclusive', 'non-exclusive' and 'sole' are used frequently to describe the rights granted under both agency and distribution agreements,

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