In general, attempting to remedy the infringement through negotiation is the most economically sound option. Court proceedings are costly for both you and your distributor. Your distributor will also likely want to maintain relationships with potential suppliers for many reasons. Clearly, the interests differ considerably depending on which side of the table the parties are on. The producer may at least want some kind of competition agreement. On the other hand, a non-compete agreement will never be in the distributor`s interest. Non-competitive agreements are one of the most sensitive subjective provisions of the treaty. Counsel for both parties can say with great certainty whether a particular clause is “reasonable” and therefore applicable. An often controversial question is whether a distribution agreement – with a termination clause – is a comprehensive and integrated agreement, or whether it should be allowed to explain what it means. Usually, the distribution contract contains a rather enigmatic termination clause – perhaps something like: “The manufacturer reserves the right to terminate distribution at any time with a notice period.” The manufacturer did well. The distributor then responds to a dispute by stating that, during the negotiations and through the relationship, the parties understood that the producer could terminate it at any time for any reason, but that the parties had actually considered a long-term relationship that the producer would not terminate, except for a good reason. The legal question that often needs to be resolved is whether this evidence is admissible. If, according to the decision, the court considers the distribution agreement to be a complete and integrated handwriting and that the termination clause is clear, it should apply the Parol rule of evidence to exclude oral evidence.
On the other hand, experience has shown us that the courts often find that the parties never intended to make the agreement the full integrated document and that they will accept parol evidence in such a situation. There is no clear way to deal with it, but if you represent the manufacturer, you need to go a little overboard to write your distribution agreements on this point. You can expressly state that the parties agree that the distribution agreement is a complete written and integrated agreement and that nothing else is legally binding on the parties.