Trade & distribution

Case study – trade/distribution

1) The case

Initial situation

The contact was made at a trade fair in Lyon. The French partner was strong, determined and well connected. He wanted to build up our entire range nationwide – preferably immediately and exclusively, with his own team and a six-figure start-up budget. The pipeline looked excellent.

In order to acquire two large retail customers at short notice, the managing directors also signed a short additional agreement: the partner was allowed to “negotiate conditions on our behalf” for these two customers; commission instead of purchase was possible for campaign weeks. “Only on a transitional basis”, it said. The main contract remained a classic dealer contract (purchase and resale).

The escalation

Nine months later, sales were faltering. Our client wanted to readjust the cooperation: smaller territories, clear target values, tighter control. The partner objected – and had a lawyer inform us that he had become a commercial agent as a result of the practice and was demanding compensation in accordance with Section 89b HGB.

The documents were open to attack: the contract says dealer; the addition sounds like representation. The correspondence contains both: orders on own account and emails in which offers were announced “on behalf of” the client. It is precisely this mixture that is dangerous.

2) How I proceed in this situation

Nailing down the facts

• Differentiation: Which sales were in the form of purchase/resale? Which few weeks were genuine commission campaigns?
• Competence to conclude contracts: Who concluded the legally binding contracts with the two major clients – the client or the partner?
• Reconstruction of the chain: order → invoice → payment → returns (receipts, e-mail chains, filing locations).
• Secure brand & channels: Domains, brand stores, access/accounts, content maintenance, coordinated guidelines.

Clearly classify supplementary agreement

• “Negotiating” is not “concluding” – representation requires the power to conclude.
• Economic risk (stock, returns, marketing spend) remained with the partner → Indication against agent model.
• Price/brand guidelines should be read as quality specifications, not as an instruction-bound representative control.
• Key message: Rule was dealer business; commission was a narrowly defined exception.

Negotiation objective

With a solid evidentiary record, I take an active approach to negotiations: disentanglement without litigation. I make it clear that a compensation claim under § 89b HGB does not stand, while at the same time offering a path that saves time, money and face: orderly termination, brand and channel control back to the client, a short sell-off, stability in the market. For the two promotional weeks, a narrow, well-reasoned lump sum may be sensible – not as an acknowledgment, but as a pragmatic conclusion.

3) Result

• Settlement without recognition of a legal obligation.
• No claim for compensation according to § 89b HGB.
• Exclusivity ends; short sell-off phase at fixed conditions.
• Domains, brand stores, accesses and sales-related data back to the client.
• Confidentiality about figures; no press, no theater.
• The client remains capable of acting in the market – without being held hostage in external channels.