SPAIN: Distribution vs. purchase agreements; clientele compensation in case of breaching by the distributor.

Ignacio ALONSO | SPAIN | 2016-01-19

Ignacio ALONSO

View CV

The parties entered into a relationship in 2004 for almost four years with no written agreement. The relationship ended because an administrative procedure against the reseller (distributor) by the Health and Consume Department due to the presence of some irregularities in the storage of the products (cheese).

The first question to solve was to decide about the nature of the agreement. The parties discussed if the agreement was a distribution agreement or a succession of purchase agreements.

First Instance Court concluded that the agreement was a succession of commercial purchases and therefore no compensations were due.

The Court of Appeal, nevertheless, considering the elements of the relationship, has decided that the agreement was a distribution agreement and not a mere succession of commercial purchases. The Court based its decision on the following circumstances:

  1. The geographical area in which the products were sold;
  2. The exclusivity of the agreement in a particular area;
  3. The duration of the agreement;
  4. The continuity in the provision of products;
  5. The fact that once ended the relationship a new company was appointed for the distribution of products;
  6. The existence of a bank warranty;
  7. The fact that the Manufacturer also provided labels for the products.

All this said, the Court of Appeal decided nevertheless that although the nature of the agreement, no clientele compensation was due because the agreement ended due to storage deficiencies of the products provoked by the distributor (he was not able to prove that these were due to the activity of the manufacturer and the lack of restitution of the said products when received was an added evidence), with no abuse of right or dominant position by the manufacturer.

 

Please, download here the full text of the judgement

 

Ignacio Alonso, IDI agency and distribution country expert for Spain

 

Print this article