I do not know whether this thread should be inside this section or not. In the event that I posted in the wrong section, please forgive me.
Recently one of my friend, being terminated by his Principal. He would like to find carry another Principal's products. However, he signed an Reseller agreement at the time he began carrying his previous Principal's products.
The related clause inside the agreement is something as follows:
"If the Principal terminates this agreement as a result of a breach by the Reseller of its obligations under the agreement, the Reseller agrees that he will not, for a period of 9 months after the end of term take any action which is intended to encourage a client to replace the Principal as his or her provider. "
What does that mean? Does it means that my friend need to wait for 9 months before carrying another company's products? The industry has few clients therefore it is important.
Based on my understanding of the term of this clause, I derived 2 interpretations:
1) The Reseller need to wait for 9 months
2) The Reseller need not wait for 9 months as he didn't breach the agreement.
I don't really understand as what is the real meaning of "As a result of a breach by the reseller of its obligations under the Agreement." If he didn't breach, does it means that he don't need to wait for 9 months.
Hope experts here can provide an answer. Thank you very much.