Module 4 · Chapter 10

Ending a Distribution Agreement: Stock, Customers and Goodwill

A distribution agreement must say what happens when it ends. This chapter shows how it can end and who keeps the stock and the customers. It also shows why the distributor gets nothing for goodwill.

≈ 8 min read 8-question test

In this chapter

  • How the Agreement ends, on its last day or earlier
  • What happens to unsold machines and to machines out on rent
  • Why the distributor gets nothing for goodwill, and how the customers move

10.1The end of the Agreement in one paragraph

Every distribution agreement ends, and the end decides who keeps what. The Agreement runs for three years and does not renew by itself. Cressby must buy back unsold new machines at the end, and it may also buy rented machines whose customers agree to move. Tullavane gets nothing for the business it built, because no law gives a distributor such a payment and the Agreement gives none.

Key point

At the end, Tullavane gets only what the Agreement gives it. Cressby buys back unsold stock and may buy rented machines, but it pays nothing for goodwill.

Also in this chapter

  1. How the Agreement can end
  2. The buy-back and the option
  3. Cressby takes back its Irish business
  4. No payment for goodwill
  5. Your job

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