Overview
Our client supplied hardware and software products to consumers directly and through a network of distributors and retail agents around the world. We were engaged to terminate the contracts of certain of its retail agents in the UK.
Context and Challenge
The main challenge was that the contractual position with the relevant retailers was unclear and none of the arrangements contained rights to terminate for convenience.
We had to come up with a solution which was as elegant as possible and which would avoid litigation or even debate with the retailers.
Process and Insights
We looked at the contractual arrangements in place and spent time understanding the client’s position, what they wanted to achieve and their risk appetite.
We also looked at the financial position – we assessed the levels of business that each retailer was generating from the sale of our client’s products and matched this against the retailers’ overall business performance. This involved gathering data from our client and also by reviewing latest accounts that the retailers had filed at Companies House.
Solution
Although there was no express right in the retailer contracts to terminate for convenience we were able, in this situation, to rely on common law rights to terminate on reasonable notice. Having assessed the financial position with the retailers we were able to advise on what “reasonable” notice would be and our client was happy to adopt a conservative approach because they were keen to be seen to be behaving fairly.
We then drafted termination letters to be sent out to the retailers by our client and prepped our client on next stage responses if they were needed.
Results
The retailer contracts were terminated without difficulty with the retailers.
