Doing Business in the Netherlands 2012 - American Chamber of ...

Doing Business in the Netherlands 2012
Dutch law does not provide for specific legislation on distribution
agreements. Consequently, distribution agreements are governed by
the (default) rules of Dutch contract law. As noted above, Dutch
contract law is rather liberal and allows for substantial freedom for the
contracting parties. The parties are thus in principle bound by their
agreement, including the termination provisions thereof. A Dutch
court may, however, set aside a contractual provision (such as a
termination provision) if invoking such a provision, considering all
circumstances of the case, is deemed unacceptable in view of the
principles of reasonableness and fairness, as referred to above.
When a distribution agreement is silent on termination, such
agreement may in general be terminated by giving reasonable notice.
All relevant factual circumstances need to be taken into account in
order to determine the reasonableness of a notice period (e.g., the
duration of the relationship, the dependence of the distributor,
investments recently made, etc.). Depending on the circumstances,
notice periods may vary from one month to more than one year.
As a general rule, a distributor is not entitled to compensation if a
reasonable notice period has been granted. However, the principles of
reasonableness and fairness may bring about that, under specific
circumstances and despite the fact that a reasonable notice period has
been granted, the distributor is entitled to some form of compensation.
This may be the case, for example, if the supplier has given the
impression that the contract would be continued and the distributor
has made investments that cannot be recouped.
Finally, it should be noted that EU and Dutch competition rules have a
significant effect on distribution agreements. This subject is further
discussed in chapter 10.
8.7 Franchise Agreements
Contrary to some other European jurisdictions, the Netherlands has
not adopted any specific legislation on franchise agreements. In the
absence of any specific rules, franchise agreements, like distribution
Baker & McKenzie 67