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Distribution Cancellation Letter

Distribution Cancellation Letter Template for Germany

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Key Requirements PROMPT example:

Distribution Cancellation Letter

"I need a Distribution Cancellation Letter under German law to terminate our agreement with ABC GmbH immediately due to repeated breach of minimum purchase requirements, with the letter clearly stating our compensation claims and demanding the return of all marketing materials."

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Document background
The Distribution Cancellation Letter is a crucial document used when a company needs to formally terminate a distribution relationship in Germany. It must be drafted in compliance with German legal requirements, particularly the German Civil Code (BGB) and Commercial Code (HGB). This document is typically used when a manufacturer or supplier decides to end a distribution arrangement due to various reasons such as business restructuring, performance issues, or strategic changes. The letter must include specific elements required under German law, such as clear termination declarations, notice periods, and references to relevant agreement provisions. Special attention must be paid to potential compensation claims under HGB § 89b and post-termination obligations. The Distribution Cancellation Letter serves as official documentation of the termination and helps manage legal risks associated with ending commercial relationships in Germany.
Suggested Sections

1. Sender Details: Full legal name and address of the sending company

2. Recipient Details: Full legal name and address of the distributor

3. Date: Date of the cancellation letter

4. Reference Line: Reference to the specific distribution agreement being terminated, including its date and any reference numbers

5. Subject Line: Clear indication that this is a termination notice

6. Agreement Identification: Specific details of the distribution agreement being terminated, including date of execution and parties

7. Termination Declaration: Clear and unambiguous statement of termination

8. Legal Basis: Reference to the specific clause in the agreement or legal provision allowing for termination

9. Effective Date: Clear statement of when the termination takes effect, considering notice periods

10. Closing: Formal closing, signature block, and company details

Optional Sections

1. Reason for Termination: Include when termination is for cause or when documentation of reasons is legally required or strategically advisable

2. Outstanding Obligations: Include when there are pending payments, orders, or other obligations that need to be addressed

3. Return of Materials: Include when there are company materials, documentation, or property to be returned

4. Post-termination Obligations: Include when there are confidentiality, non-compete, or other continuing obligations

5. Compensation Claims: Include when addressing potential claims for compensation under HGB § 89b

6. Transition Arrangements: Include when specific arrangements are needed for smooth transition of business

7. Inventory Handling: Include when there are specific provisions for handling remaining inventory

Suggested Schedules

1. Power of Attorney: If the letter is signed by a representative, documentation of authority to act

2. Agreement Copy: Copy of the original distribution agreement being terminated

3. Outstanding Items List: Detailed list of pending obligations, payments, or transactions

4. Inventory List: Current inventory status and handling instructions if applicable

5. Transition Plan: Detailed plan for handling the transition period if applicable

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Relevant Industries

Manufacturing

Automotive

Consumer Goods

Industrial Equipment

Electronics

Pharmaceuticals

Chemical Products

Food and Beverage

Machinery

Technology

Retail

Medical Devices

Construction Materials

Agricultural Products

Fashion and Apparel

Relevant Teams

Legal

Sales

Commercial

Business Development

Operations

Distribution

Supply Chain

Compliance

Contract Management

Corporate Affairs

Relevant Roles

Chief Executive Officer

Managing Director

Commercial Director

Sales Director

Legal Counsel

Head of Distribution

Business Development Manager

Contract Manager

Sales Manager

Distribution Network Manager

Chief Commercial Officer

General Counsel

Compliance Officer

Operations Director

Supply Chain Manager

Industries
German Civil Code (Bürgerliches Gesetzbuch - BGB) §§ 314, 349: Provisions regarding termination of continuing obligations and contractual relationships for good cause, including notice requirements and formal procedures
German Commercial Code (Handelsgesetzbuch - HGB) §§ 84-92c: Regulations concerning commercial agents and distributors, including compensation claims (particularly relevant for analogous application to distributorship termination)
EU Vertical Block Exemption Regulation (Regulation (EU) No 330/2010): European competition law regulations affecting vertical agreements, including distribution agreements and their termination
German Act Against Restraints of Competition (Gesetz gegen Wettbewerbsbeschränkungen - GWB): National competition law provisions that may affect the termination of distribution agreements
BGB § 133 and § 157: Rules on contract interpretation and good faith principles that apply to the termination process
HGB § 89b: Provisions regarding compensation claims upon termination (indemnity), which may apply by analogy to distributorship agreements
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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