Slapstick now knows that a distribution agreement must clearly state the responsibilities and obligations of both parties during the term of the agreement, in the event of termination and after the formal termination of the agreement. The distribution contract must specify the responsibilities of both parties during and after the term of the contract. Before entering into a distribution agreement, manufacturers of alcoholic beverages should do their homework. Here is a list of questions. Few Spirits (fun fact, the F.E.W. represents Francis Elizabeth Willard, president and founder of the Woman`s Christian Temperance Union) filed a complaint (complaint) to terminate its spirits distribution agreement with UB Distributors on the grounds that the agreement did not have a duration defined by years/months/length, that it could be terminable after the pardon. The action against the spirits distributor (above linked) required that the absence of a fixed term make the contract cancellable on demand (many States have codified this in their case law – that a contract can be terminated without a fixed term on request). The liquor distributor objected, arguing that many deals leave time out of the duration of the agreement that conditioned them to acts or events, rather than for a set period of months/days/years. For example, you may have a contract that says it`s in effect until someone does something, or even does something.
It is interesting to note that the distributor used the existence of a beer franchise status which stipulates that beer distribution contracts can only be terminated by law as a result of certain events and cannot be terminated or renewed in any other way, as a counterpoint to its argument that the legislator`s silence on the spirit drinks case resulted in State legislation not being did not object to a time or event delay. The distributor told Slapstick that it had a chance to get an unproven brand in new markets and that it would invest a lot of time and money to create a slapstick beer market across the United States. In exchange for this investment, the distributor was not willing to accept a contract that allowed the distributor to be easily replaced. In addition, the agreement did not contain any provision regarding termination for fickle reasons or termination for convenience. The distributor only authorized the termination for a limited number of specific causes. In its first year with the new distributor, Slapstick learned that manufacturers and distributors often disagree, which is the presence and responsibility of the cause of termination. This information must be clearly defined in the contract in order to protect all parties. Lesson: Even if you`re dealing with a franchise status that says you can`t terminate, but for good reason, you might like to have an agreement with a defined term that you constantly “renew” to ensure that if the laws ever change – you have a definite term and won`t end up at the wrong end of eternity. Relationships between manufacturers and distributors of artisanal beverages begin and grow over time. They grow.
They ripen. Sometimes they disintem. They eventually fall into ruin. External factors regularly create pressure on the distributor and the manufacturer of artisanal beverages, which request a modification of the distribution agreement with a period of 30 days. If the agreement allows for changes later in the year, there are few problems. However, if the agreement only allows for changes once a year, one or both partners face undue pressure until the agreement can take into account such an annual change. The best distribution agreements make it possible to make changes throughout the year. After participating in some Craft Brew symposia, Slapstick learned that distribution contracts must be renewed annually and must allow for termination for original reasons and termination for convenience.. . .