The Termination of Distribution Agreement is a crucial document used when parties wish to formally end their distribution relationship in Switzerland. It becomes necessary when either party decides to terminate the arrangement due to various reasons such as strategic changes, performance issues, or mutual agreement to end the relationship. The document must comply with Swiss law, particularly the Swiss Code of Obligations and relevant commercial regulations. It covers essential aspects including termination dates, financial settlements, inventory handling, customer transition procedures, and ongoing obligations. This type of agreement is particularly important in Switzerland due to specific legal requirements regarding commercial relationships and potential compensation claims similar to those in agency relationships. The document ensures a clear framework for ending the business relationship while minimizing legal risks and providing certainty for both parties during the transition period.
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1. Parties: Identification of the principal/supplier and distributor, including full legal names and addresses
2. Background: Reference to the original Distribution Agreement, its date, and brief context for the termination
3. Definitions: Key terms used in the agreement, including reference to defined terms from the original Distribution Agreement
4. Termination Date: Clear specification of when the Distribution Agreement will terminate
5. Mutual Release: Release of parties from future obligations under the Distribution Agreement, subject to specified exceptions
6. Outstanding Payments: Settlement of any outstanding invoices, commissions, or other payments between the parties
7. Treatment of Inventory: Handling of remaining inventory, including buy-back provisions or authorization to sell-off
8. Customer Transition: Process for transitioning customer relationships and handling ongoing customer obligations
9. Intellectual Property: Cessation of IP rights and return or destruction of branded materials
10. Confidentiality: Ongoing obligations regarding confidential information
11. Post-Termination Obligations: Specific duties that survive termination, including non-compete and non-solicitation provisions if applicable
12. Governing Law and Jurisdiction: Confirmation of Swiss law application and jurisdiction for disputes
13. Entire Agreement: Standard boilerplate confirming this document represents the entire agreement regarding the termination
14. Counterparts and Execution: Provisions for signing the agreement
1. Compensation Claims: Section addressing any termination compensation claims under Swiss law principles, used when the distributor may be entitled to compensation
2. Transition Assistance: Detailed provisions for transitioning the business to a new distributor or back to the principal, used when complex handover is required
3. Tax Provisions: Specific tax-related provisions and allocations, used when there are significant tax implications
4. Employee Matters: Handling of employee-related issues, used when employees are affected by the termination
5. Dispute Resolution: Alternative dispute resolution procedures, used when parties prefer arbitration or mediation
6. Warranties and Representations: Specific warranties regarding the termination process, used in complex terminations
7. Assignment of Contracts: Provisions for handling assignment of customer or supplier contracts, used when contracts need to be transferred
1. Schedule 1 - Inventory List: Detailed list of remaining inventory and agreed handling method
2. Schedule 2 - Outstanding Payments: List of all outstanding payments, credits, and debits between parties
3. Schedule 3 - Customer List: List of customers and agreed treatment of each customer relationship
4. Schedule 4 - Intellectual Property Items: List of IP items to be returned or destroyed
5. Schedule 5 - Transition Timeline: Detailed timeline for implementing the termination steps
6. Schedule 6 - Required Notices: Ƶ for customer communications and public announcements
7. Appendix A - Original Distribution Agreement: Copy of the original Distribution Agreement being terminated
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