Disputes involving a distributorship may raise a host of legal issues. Among them are:
- conflict-of-interest disclosure;
- adequacy of the distributorship agreement (and whether it holds the dealer to reasonable standards of performance); and,
- Termination or suspension of a distributorship, possible resulting liabilities to the dealer (including for payment of commissions, advertising charges, shipping expenses, and other amounts due), rights of the dealer upon the termination of the dealer agreement, and competing claims, rights, liabilities and courses of action against a manufacturer, distributor, or supplier.
A company sells its product or service to a distributor who may then sell it to dealers, who sell to end customers. There can be multiple levels of distributors for a product or service before reaching the end-purchaser.
The laws affecting companies and their customers cross over into several practice areas, such as contracts, shipping, taxation, consumer protection, intellectual property, and licensing.
