The law on precontractual information applies to all contracts whereby a manufacturer/franchisor grants the distributor/franchisee the use of the logo, Corporate identity, commercial name or whereby know how, commercial and or technical information is transferred to be used against payment.
The law provides for the obligation to submit- at least one month prior to the signing of the agreement- the draft agreement as well as all relevant information regarding the commercial and legal conditions of the future collaboration.
This relevant information is explicitly referred to in the law and relates to the market situation, I.P. rights, previous experiences, annual accounts as well as to the contractual context such as the duration of the contract, obligations, compensation,non compete clauses, etc.
The Court was faced with the request by the franchisee to pronounce the nullity of the contract (in accordance with the provisions in the law) since some relevant information was not communicated by the frachisor.
The Judge stated that the non respect of one of the obligations (some information was indeed given) is sufficient to conclude that the provisions of the law were not respected. The nullity of the contract was pronounced and consequently the restoration of the initial situation, insofar possible. This means a.o. the reimbursement of the entrance payment, the resolution of the individual purchase agreements.
Geert Bogaert, IDI Member.
