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GERMANY: Distributorship contracts according to German law.

No claim for compensation of the distributor if the supplier does not make use of the customer base after the termination of the contract.

Burghard PILTZ - 15.02.16
Country expert - IDARB Arbitrator

According to established law practice, the distributor is entitled to a claim for compensation upon the termination of the distributorship contract if the legal relationship between the distributor and the company exceeds a simple seller-buyer-concept and the distributor is integrated tightly into the distribution network of the supplier and if, furthermore, the distributor is obliged to provide the supplier with information regarding its customer base so that the supplier is in a position to continue to use the distributor’s customer data for its own purposes. German court rulings focus on this last condition in particular, as does the decision of the German Federal Court of Justice described hereinafter (BGH 15.02.2015 – AZ. VII ZR 315/13):

 

The distributor and the supplier had entered into a distributorship contract regarding the distribution of vehicles as well as a separate agreement for the provision of customer data (“customer data agreement”). The customer data agreement stipulated in particular the following: The distributor shall hand over customer data to the supplier for customer service and market research purposes. The customer service shall end upon termination of the distributorship contract. After the distributor has terminated its participation in customer service, the producer shall block the according data, stop its use and delete such data upon the distributor’s request. Additionally, the customer data agreement contained an offer by the supplier to purchase the customer data after the termination of the distributorship contract. After the supplier had terminated the distributorship contract, the supplier and the former distributor failed to reach an agreement on the sale of customer data.

 

The distributor’s liquidator brought legal actions against the supplier for compensation payments. In its decision, the German Federal Court of Justice set out that the fact that the distributor bought new vehicles subject to retention of title and assigned his claim for the payment of the purchase price existing against his customers to the supplier for security purposes in advance, is not sufficient to create an obligation for the distributor to provide the customer base to the supplier. The distributor’s obligation to furnish the supplier with the information necessary in order to enforce a claim against the customers in case of default is not to be treated as equal to the obligation to provide the supplier with information regarding its customer base. The supplier does not gain extensive knowledge of the customer base acquired by the distributor. Furthermore, the distributor is only obliged to furnish detailed information regarding the customers if he negligently breaches his obligations arising out of the security agreement leading to circumstances under which the supplier may safeguard the security granted to him.

 

Furthermore, the German Federal Court of Justice stated that a claim for compensation could neither be based on the customer data agreement obliging the distributor to provide customer data during the term of the distributorship contract. According to the terms of the customer data agreement, the supplier was not in a position to use the customer data supplied to him any more since he was contractually bound to block the according data and stop its use after the termination of the contract and even delete such data.

 

In its decision, the German Federal Court of Justice is obviously focussing on the question whether the supplier could use the customer base to his advantage after the termination of the contract. Accordingly, the provision of the customer base and the possibilities of the supplier to use these data for its own purposes after the termination of the contract are of mayor importance when drafting distributorship contracts.

 

Burghard Piltz, IDI distribution country expert for Germany

 

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