BELGIUM: Decision of the Belgian Supreme Court on of “pre-contractual information obligations” in a franchise agreement

On June 2, 2023, the Belgian Supreme Court has ruled in a matter concerning the breach of “pre-contractual information obligations” in a franchise agreement. Pursuant to Article 3 of the Law of December 19, 2005 concerning “pre-contractual information in commercial cooperation agreements”, (as revised by article 4, 2° of the law of April 2, 2014), […]

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TURKEY: Decision of the 11th Chamber of the Turkish Supreme Court Assessing the Penalty Clause and Termination Fee within the Franchise Agreement.

The lawsuit is related to the claim of the franchisor for the collection of the franchise fees for the remaining term of the franchise agreement together along with the penalty clause based on the claim that the franchise agreement between the parties has been terminated by the franchisee without any justifiable ground. The Court of […]

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BELGIUM: Decision of the Belgian Supreme Court on an explicit termination clause.

On May 11, 2023, the Belgian Supreme Court has ruled in a matter concerning the immediate termination of a distribution agreement, based on an explicit termination clause. The case concerned the termination of a distribution agreement by Rolex. A contract clause allowed Rolex not only to terminate the agreement in case of contractual breach, but […]

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INDIA: Supreme Court overrules earlier decision regarding unenforceability of unstamped arbitration agreements.

The Supreme Court of India overruled a decision from 2023 regarding the enforceability of arbitration agreements, on which stamp duty was not paid as mandatorily required under the Indian Stamp Act. The Indian Stamp Act provides that ‘stamp duty’ (an indirect tax paid to the Government) must be paid on all instruments on which such […]

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EU: A contract to enter into a future contract of franchising does not fall under the notion of ‘provision of services’ provided by Regulation Brussels I bis

With judgement of September 14, 2023 (in the proceeding C-393/22, EXTERIA s.r.o. v. Spravime s.r.o.), the European Court of Justice decided on the interpretation of Article 7(1) Reg. No. 1215/2012, in the context of a contract to enter into a future contract of franchising. Facts On 28 June 2018, EXTÉRIA s.r.o., a company established in […]

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CANADA: Conscious Compliance: The Role of Foreign Corporations in Canada’s Fight Against Modern Slavery

Franchisors and parent companies supplying goods for sale in Canada should begin to evaluate and address the ethical standards of their supply chains. Bill S-211, An Act to enact the Fighting Against Forced Labour and Child Labour in Supply Chains Act and to amend the Customs Tariff (the “Act”) will impose annual reporting obligations on Canadian businesses […]

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DENMARK: Effective Termination of an Exclusive Distribution Agreement?

The Danish Maritime and Commercial Court recently rendered judgment on the effectiveness of a termination notice that did not comply with the contractual requirements for termination of an exclusive distribution agreement.   In 1988, a Danish supplier of vacuum cleaners entered into an exclusive distribution agreement with a Moroccan distributor for the distribution of certain […]

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CANADA: Saskatchewan introduces comprehensive franchise legislation.

Saskatchewan could soon become the seventh Canadian province to enact franchise legislation, joining Alberta, Ontario, Prince Edward Island, New Brunswick, Manitoba and British Columbia. The Legislative Assembly of Saskatchewan introduced Bill 149, The Franchise Disclosure Act (the Saskatchewan bill), for first reading on November 9, 2023. If enacted, the Saskatchewan bill would serve as the province’s first […]

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AUSTRIA: Is the agent´s obligation to repay a “fixed fee” in the event of premature termination invalid? (OLG Graz, 14 April 2023).

A commercial agent received a monthly fixed fee/bonus linked to at least 5 years of work and the achievement of certain targets. After 3½ years, he wanted to terminate the contract and was then confronted with a reclaim. The contractual provisions A commercial agent for rental contracts for printers received a turnover-based commission. Furthermore, he […]

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EU: A recent decision of the EU Court of Justice on price fixing in distributorship contracts.

With decision of June 29, 2023 (in the proceeding C-211/22, Super Bock Bebidas SA, AN, BQ v. Autoridade de Concorrência), the European Court of Justice decided on the interpretation of the rules of Reg. No. 2790/1999 and No. 330/2010 on price fixing, in the context of an exclusive distributorship contract. The judgement is very interesting, […]

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SAUDI ARABIA: Draft new Saudi Commercial Transactions Law (“Commercial Code”).

Saudi Arabia continues to overhaul and modernise its legal system in (commercial) contract matters: Following the entry into force of the Commercial Franchise Regulations (Franchise Law) in 2019 (see IDI Newsletter November 2019), the Civil Transaction Regulations (Saudi Arabia’s first “Civil Code”) was enacted recently by Royal Decree M/191 of 29/11/1444H. (18 June 2023) and […]

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ITALY: Encroachment in franchising: the application of the good faith principle by Italian Courts.

Legal framework Pursuant to Article 3.4, c), of Law 129/2004 (the Italian law on franchising): “(..) The agreement must furthermore expressly indicate: (c)   the scope of the territorial exclusivity, if any, with respect to other franchisees or to channels and sales units directly managed by the franchisor;” The above provision (and particularly the indication “if […]

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URUGUAY: Goodwill indemnity in Uruguay and the impact of the new distribution platforms.

(i) General Remarks Distribution, as a business collaboration contract, has been defined, at least following the interpretation that has prevailed in Uruguay, as a contract between independent parties, each of which fulfills its respective activity without, in principle, a preeminence of one over the other party. A distributor, when he agrees to market the products […]

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NEW ZEALAND: The impact of data privacy in licensing.

When the Covid-19 pandemic hit the world in early 2020 the licence industry was impacted just like anyone else.  However, licensing has contributed immensely to economic recovery by providing considerable growth in relation to new systems development and appointing new licensees in various industries. All parties collect a variety of information and in New Zealand […]

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UNITED ARAB EMIRATES: Significant features of the New Agency Law in the UAE.

On 15 December 2022, the Government of the United Arab Emirates issued the Federal Law No. 3 of 2022 regulating commercial agencies (“New Agency Law”), which replaced the current commercial agency law at the time of this publication, the Federal Law 18 of 1981 (“Old Law”), after 41 years of application. The New Commercial Agencies […]

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FRANCE: Should suppliers fear the new class actions to come under French law? Possible new class actions not only from clients but also from distributors and business partners.

Class actions have existed in French law since the Hamon Law of 2014 (Law No. 2014-344 of 17 March 2014). They were originally limited to consumer law and competition law.  As such, a nationally representative and approved consumer protection association may bring an action before a civil court in order to obtain compensation for individual […]

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