Termination Of Agreement By Distributor

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Under the normal procedure, agencies do not hold shares. For stocks held by traders, whether they continue to be used by the trader or whether they are bought back by the client. In case of redemption, it is important to explicitly indicate in the cancellation contract the conditions of the goods subject to redemption; That is, whether they are new or not, in original packaging, etc. Another element that should be agreed by the parties is the repurchase price, subject to the nature of the goods, unless the principles for determining the repurchase price are defined in the distribution contract. When it comes to customer transfer, agents and merchants are subject to different regulations. In the event of termination of the agency contract for any reason, the agent is obliged to transfer its clients to the contracting entity within the subject area and to cooperate and support the payer with a view to the implementation of a smooth and efficient transition. Under Turkish law, Article 123 of the Turkish Commercial Code (“TCC”) [3], which governs the agency relationship, provides that the parties may agree on a non-competition clause after the cessation of competition, provided that the agent is adequately compensated. The competition agreement must be in writing and a written document containing the provisions of the contract and signed by the contracting entity must be given to the representative. Such an agreement can only be concluded for a maximum period of two years from the date of termination and should be limited to the geographical area or group of customers entrusted to the agent and the type of goods covered by the commercial agent contract. Council Directive 86/653/EEC[4] (“Directive”) also contains similar provisions, with the exception of the payment of appropriate compensation to the intermediary, but allows national law to impose other restrictions. The parties are free, as far as possible, to determine the principles of termination, the date of entry into force of the termination and the content of the cancellation contract. The content should be determined taking into account the details of the main contract and the intention of the parties. Depending on the intention of the parties, the date of termination may be set as the date of signature of the cancellation contract or as a date or reason determined after the date of signature as well as retroactive.

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