Introduction
In a recent case the defendant opened two shops in quick succession immediately adjacent to an existing shop in competition with its dealer. The plaintiff considered this action to be a serious breach of good faith and cited a Federal Court of Justice judgment in which direct sales by a company in parallel to an authorised dealer were considered to be in breach of good faith, even without the agreement of a clause protecting the authorised distributor’s territory.(1)The Dusseldorf District Court dismissed the claim – not on the grounds that the principal’s action did not breach unwritten contractual good faith, but rather on the grounds that it was based on a sales policy decision that was free of arbitrariness and was not intended to cause damage.(2) Continue reading this article.