Commercial Agency, Franchise and Distribution Contracts

Book excerpt: The rules presented in this volume of "Principles of European Law" deal with commercial agency, franchise and distribution contracts, and with other contracts where one party uses the other party's skill and efforts to bring its products to the market. Although these Principles are not directly applicable to other long-term (commercial) contracts, some of the Articles may be applied to such contracts by way of analogy where appropriate. The economic function of all three contracts is that they are instrumental in bringing products to the market. They are so-called vertical agreements, as they are agreements between economic actors on different levels in the production and distribution chain. Obviously, the economic importance of these contracts is enormous since they form the connection between producers and retailers who sell the products to consumers and other final users. There are only very few economic sectors where producers regularly sell their products directly to final consumer users. Goodwill compensation after the ending of a distribution contract, the moment at which the agent's commission is due, the franchisor's obligation to maintain the good reputation of the network are but a few examples of issues where specific rules are needed in order to give legal practice some guidance and to provide practitioners with a reasonable degree of legal certainty.