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  1. #1
    Join Date
    Jul 2008
    Posts
    18

    Default Competition After Termination as Reseller

    Dear all,

    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.

  2. #2
    Join Date
    Jul 2008
    Posts
    18

    Default Re: Competition After Termination as Reseller

    I have done a research over the web about post termination competition but I failed to find similar senario. Mostly, it is about employer and employee terms. The thing that I don't understand is the statement "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. "
    Really hope experts here can give an answer as it is a bit urgent. My friend may need to signed for another agreement soon but he do not wish to take any risks for being sued.

  3. #3
    Join Date
    Jul 2008
    Posts
    18

    Default Re: Competition After Termination as Reseller

    Dear Experts here,

    Hope to get some replies. Thanks.

  4. #4
    Join Date
    Jan 2008
    Location
    Toledo, OH
    Posts
    16,307

    Default Re: Competition After Termination as Reseller

    Had you followed the instructions to NOT reply to yourself to try to bump the thread up, you might have had this looked at sooner. Many responders do not bother to look at threads that have replies to them, assuming that the question has been answered.

    You've also failed to follow the instructions to identify your state.

    Why was the reseller agreement terminated?

  5. #5
    Join Date
    Jul 2008
    Posts
    18

    Default Re: Competition After Termination as Reseller

    Quote Quoting LawResearcherMissy
    View Post
    Had you followed the instructions to NOT reply to yourself to try to bump the thread up, you might have had this looked at sooner. Many responders do not bother to look at threads that have replies to them, assuming that the question has been answered.

    You've also failed to follow the instructions to identify your state.

    Why was the reseller agreement terminated?
    Thank you so much for your reply and information. So sorry that I didn't know that I shouldn't reply on own thread.
    The reseller agreement was terminated due to some changes on the industry regulations.

  6. #6
    Join Date
    Sep 2005
    Location
    Behind a Desk
    Posts
    98,846

    Default Re: Competition After Termination as Reseller

    We don't know why the reseller was terminated, or if the principal will claim it resulted from a breach. You still haven't identified the state.

    Tell your friend to consult a lawyer in his state with the details of his situation.

  7. #7
    Join Date
    Jul 2008
    Posts
    18

    Default Re: Competition After Termination as Reseller

    Quote Quoting Mr. Knowitall
    View Post
    We don't know why the reseller was terminated, or if the principal will claim it resulted from a breach. You still haven't identified the state.

    Tell your friend to consult a lawyer in his state with the details of his situation.
    Thank you for your reply. He is not from US, therefore I have no idea where is the state. I hope that given the general law, it is applicable outside of US.
    Based on my understanding about my friend's situation, the reseller was terminated due to the changes of industry regulation. He told me that it is not due to any breach of contract but I do not know whether the Principle can claim it resulted from a breach.
    If it is not resulted from a breach, is this particular clause void?

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