0
Commercial Law


Part A – Commercial: Typical Agreements
Part B – Warranty and Liability etc.
Part C – International Busin...
Content

A.   Commercial: Typical Agreements – an overview
      •  Supply and Sale Agreements (including: purchase contra...
Glossary

BGB = German Civil Code
HGB = German Commercial Code
GWB = Law against restraint in competition
…




          ...
A.   Typical Agreements




           -3-
A.   Question: Starting Business – what agreements do we need?




                              -4-
A.           Typical Agreements – an overview

               Sale and Purchase Agreements                §§ 433 etc. BGB
...
B.   Warranty and Liability, etc.




               -6-
B. I. Basic differentiation




            -7-
B. I.       Please differentiate                                        Please Note: Difference between
                  ...
B. II. Warranty




      -9-
B. II. 1.    Warranty
Statutory Law                             Practical Tipps
   Defect in quality (§ 434 BGB)




     ...
B. II. 2. Statute Limitation for warranty

                                     Statute Limitation



            Start


...
B. II. 3. Specialty: Consumer warranty rights


                              Sale of consumer goods (§§ 474 ff. BGB)




...
B. II. 3. Specialty: Consumer warranty rights


                                             Right of recourse (§§ 478, 47...
B. II. 4. Subsequent performance by replacement or rectification


                                             Subsequent...
B. III. Guarantee




       -15-
B. III.   Guarantee


                                          Basics


                  BGB                            ...
B. IV. Compensation for damages




              -17-
B. IV.      Compensation rights


                                      Outline (1)


                                    ...
B. IV.     Compensation rights


                                     Outline (2)


                                    Ot...
B. IV. 1. Liability for contractual obligations


                             Liability for defects and other obligations...
B. IV. 2. Strict liability


                                                      Liability without default

            ...
B. IV. 3. Liability as producer


                                             Liability as producer

                    ...
B. IV. 4. Compensation


                                           Liability

                 Breach of obligation
     ...
C.   International Business and German / European / International Law




                                 -24-
C.   International Business
     (1) Example – taken from an international distribution agreement




                    ...
C.   International Business
     (2) Example – taken from an international distribution agreement




                    ...
C.     International Business – A continuous example will explain the
       basics (distribution agreement)

            ...
C.I. Which Law




      -28-
C. I. 1    Differentiation between intra European cases and involvement
           of third countries

                   ...
C. I. 2    EU: for contractual obligations the principle of relevant contact
           (center of gravity) prevails
     ...
C. I. 2   EU: Characteristic Performance
                                                                               De...
C. I. 3     Third Countries: Principles are similar
                                                                      ...
C. II. Choice of Law




        -33-
C. II.   Choice of law clauses


                               Basic Questions




                         1. Subject of...
C. II. 1 Subject of Choice of Law




               -35-
C. II. 1 EU: Freedom of choice is predominant for contractual
         obligations

                                   Pri...
C. II. 1     Conclusion


                                                  Summary




             Germany              ...
C. II. 2 Law to be chosen?




           -38-
C. II. 2   The choice of „neutral“ law is not free of doubts – at least
           outside the EU

                       ...
C. II. 2    The choice of Soft Law is doubtful


                                       Details (2) – Freedom of choice


...
C. II. 2. „Soft Law“ – mostly will only be applicable if agreed or ratified


                             Details (3) – S...
C. II. 2. „Soft Law“ contains basics of contractual law


                               Details (4) – Soft Law - What doe...
C.II.   Again: What that law is applicable
          (1) Example – taken from an international distribution agreement




...
C. II. 3 How to choose?




          -44-
C. II. 3   Choice of law should be expressed and certain


                                       Details (1) – Form of ch...
C. II. 3      Problems: Choice of law in General Terms and Conditions


                                                  ...
C. III. Competent Court, Choice of Venue, Enforcement




                         -47-
C. III.     Being smart: Stipulations for Conflicts


                                       Questions




            Ger...
C. III. 1. Enforcement




         -49-
C. III. 1. Difference between intra EU relationships and relationships
           with third countries

                  ...
C. III. 2. Competence




         -51-
C. III. 2. Difference between intra EU relationships and relationships
           with third countries

                  ...
C. IV. Choice of Venue




         -53-
C. IV.      Difference between intra EU relationships and relationships
            with third countries

                ...
C. V. Arbitration Clauses




           -55-
C. V.   Arbitration


                                          Criteria




         Due to New York Convention of 1958 (...
C. V.                  Arbitration                                                                                       D...
C. V.                  Arbitration                                                                                        ...
D.   Distribution




       -59-
D. I.          Effective entry and penetration of markets require activity and
               knowledge

                 ...
D. II.        Analysis of potential structures and systems


                                               Outline


    ...
D. II.1.   Distributorships – legal character

                                                                           ...
D. II.2.   Agencies – legal character

                                                                                   ...
D. II.           Calculation of Compensation Claims (Sec 89b German
                   Commercial Code, HGB)
             ...
D. II.      Calculation of Compensation Claims (Sec 89b German
            Commercial Code, HGB) – mutatis mutandis for di...
D. II.      It cuts both ways …


            Structures and systems – advantages and disadvantages for principal


      ...
D. II.       Chances and risks must be balanced


                                             Outline of chances and risk...
D. II.   Advise necessary

                                                   Commission as ”best of
                     ...
F.   Antitrust Law – on Vertical Agreements




                    -69-
Article 81 – Treaty of Rome (similar in German law – GWB)

1. The following shall be prohibited as incompatible with the c...
F. I.          Antritrust law – in Germany, Europe and third countries


                                             Outl...
F. II.         Systematic review is required


                                          System (for vertical agreements)
...
F. III.   Typical Restraints


                                             Outline




          Price Fixation => hardco...
Thanks for your attention!
Berlin                       Dubai                                  Hamburg                    ...
Upcoming SlideShare
Loading in...5
×

Mbs Commercial Law June And July 2009

553

Published on

0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total Views
553
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
15
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide

Transcript of "Mbs Commercial Law June And July 2009"

  1. 1. Commercial Law Part A – Commercial: Typical Agreements Part B – Warranty and Liability etc. Part C – International Business and German/European Law Part D – Distribution Part E – Antitrust Law Munich, June and July 2009 Dr. Martin Rothermel, Taylor Wessing
  2. 2. Content A. Commercial: Typical Agreements – an overview • Supply and Sale Agreements (including: purchase contracts, contracts for work, service contracts, terms and conditions, etc.) • Distribution Agreements (including: agency agreement, reseller agreements, etc.) • Loan Agreements • Other Agreements B. Warranty and Liability under German Law and the Convention for the International Sale of Goods • Warranty • Guarantee • Liability • Product Liability C. International Business and German / European Law • Applicable Law and Choice of Law • Competent Jurisdiction and Choice of Venue Clauses • International Arbitration and Arbitration Clauses D. Distribution • Agency versus Distributor Agreements • Antitrust (Cartel) law in Vertical Agreements E. Antitrust Rules on Vertical Agreements -1-
  3. 3. Glossary BGB = German Civil Code HGB = German Commercial Code GWB = Law against restraint in competition … -2-
  4. 4. A. Typical Agreements -3-
  5. 5. A. Question: Starting Business – what agreements do we need? -4-
  6. 6. A. Typical Agreements – an overview Sale and Purchase Agreements §§ 433 etc. BGB Rental Agreements §§ 535 etc. BGB Specialty: Lease Agreements §§ 433, 535, etc. BGB Service Agreements §§ 611 etc. BGB Specialty: Employment §§ 611 etc. and other BGB Agreements for work results §§ 631 etc. BGB Specialty: Supply of goods to be manufactured §§ 651 etc. BGB Loan Agreement §§ 488 etc. BGB Real Estate, Mortgage, etc. §§ 873,1113 etc. BGB General Terms & Conditions (all of above and below) §§ 305 etc. BGB Agency Agreements §§ 84 etc. HGB Commission Agent §§ 383 etc. HGB Distribution & Franchise Agreements §§ various – see above -5-
  7. 7. B. Warranty and Liability, etc. -6-
  8. 8. B. I. Basic differentiation -7-
  9. 9. B. I. Please differentiate Please Note: Difference between liability for default and guarantee Outline 1 2 3 Warranty Guarantee Liability Defect in quality Guarantee for (§ 443 Breach of obligation BGB as example): e.g.: (§ 434 BGB) Cause - Defect, delay Defect in title - Quality - Other obligation ( § 435 BGB) - Durability - Strict liability - etc. Transfer of risk Relevant moment: Breach of obligation (defect in quality) - Transfer of risk Default required (not Moment Transfer of title - Guarantee period strict liability) (defect in title) No default required Subsequent performance As agreed Compensation - Replacement Consequence - Rectification Avoidance (withdrawal) Price reduction Compensation -8-
  10. 10. B. II. Warranty -9-
  11. 11. B. II. 1. Warranty Statutory Law Practical Tipps Defect in quality (§ 434 BGB) „Agreed Quality“ - Prototypes (with acceptance) - Specification - etc. Explain „use“ Explain Durability (Service Level) Explain Destination Passing of risk is important; INCOTERMS? Please note the inspection obligation in § 377 HGB Defect in title (§ 435 BGB) etc. -10-
  12. 12. B. II. 2. Statute Limitation for warranty Statute Limitation Start § 438 Abs. 2: In case of land the limitation begins upon its being handed over, in other cases upon delivery Period Please note: 2 years regular - Suspension in the event of negotiations (§ 203 BGB) - Suspension by pursuit of rights (§ 204 BGB) 5 years Buildings - Beginning a new if acknowledged (§ 212 BGB) 30 years Property rights -11-
  13. 13. B. II. 3. Specialty: Consumer warranty rights Sale of consumer goods (§§ 474 ff. BGB) Mandatory Provisions: warranty rights of consumers may not be limited in advance - Neither with respect to claims - Nor with respect to statute limitation: at least one year (for used goods) or longer Presumption: defect in quality existent at passing of the risk if defective within first 6 months thereafter -12-
  14. 14. B. II. 3. Specialty: Consumer warranty rights Right of recourse (§§ 478, 479 BGB) Recourse within chain of delivery Buyer/Supplier Buyer/Supplier Buyer/Supplier Retailer Manufacturer Consumer or Supplier • No period of grace • Reimbursement of expenditures Manufacturer • Reversal of burden of proof • Warranty rights of bears costs of • Statute limitation at least 2 months after fulfillment of rights by claiming tier consumer defects • Applicable for whole chain • No exclusion in advance – unless not compensated -13-
  15. 15. B. II. 4. Subsequent performance by replacement or rectification Subsequent Performance Replacment? Replacement? Reasonable for Rectification? Measure Choice of purchaser seller Rectification? neither nor Other rights • Avoidance • Price reduction Typical place of Place Place of performance goods ? What if delivered elsewhere? § 439 Abs. 2 BGB Details: Details: The seller must bear all expenditure required for the purpose of Costs of seller Costs Costs of seller supplementary performance Costs of purchaser Costs of purchaser -14-
  16. 16. B. III. Guarantee -15-
  17. 17. B. III. Guarantee Basics BGB Consequences Manufacturer‘s or Seller‘s guarantee Terms are decisive Detailed provisions necessary Please note: In English language no clear distinction between warranty and guarantee e.g. „warrants“, „guarantees“, „represents“, „…“ – clarify that! -16-
  18. 18. B. IV. Compensation for damages -17-
  19. 19. B. IV. Compensation rights Outline (1) Other „Producer Defects Strict liability obligations liability“ Compensation Compensation Compensation Compensation Content Delivery of Default in other Compensation Default in defective obligations without default obligations Basis products Seller Seller Producer Producer Labeler Who Importer -18-
  20. 20. B. IV. Compensation rights Outline (2) Other „Producer Defects Strict liability obligations liability“ Description Exculpation ??? Exculpation Prevention Quality Quality Exculpation assurance No limits No limits Limitation No limits - Personal injury: Nicht: What Vermögens- 85 Mio. EUR - Other: ? schaden Buyer Buyer Buyer Buyer Enduser Enduser Claimant -19-
  21. 21. B. IV. 1. Liability for contractual obligations Liability for defects and other obligations Defects: as above Other obligations resulting from contract -20-
  22. 22. B. IV. 2. Strict liability Liability without default Product is not safe Product not safe = less safety than reasonably expected Reasonableness State of the art DIN, ISO, GPSG etc. Expectation Current knowledge + Liability without default Construction Fabrication Instruction Liability for - Personal injuries - Damages in privately used goods No liability, if - Not marketed - Based on mandatory rules - Not to defect/avoid Theoretically Important Manufacturer, Labeller, Importer: Mutual liability -21-
  23. 23. B. IV. 3. Liability as producer Liability as producer Defective product, product is not safe Reasonability State of the art Certification rules Expectation Current knowledge + Default in general obligations Construction Fabrication Quality Organisation Instruction Surveillance Reaction … … … … … … … Case law -22-
  24. 24. B. IV. 4. Compensation Liability Breach of obligation Default Examples: Precondition - Defects (not in all cases default of seller – no obligation for inspection) Compensation of damages Amount Causality! Consequence - Everything predictable - Within scope of provision No differentiation as to subsequent damages Limitation in T&C difficult Practical Tips -23-
  25. 25. C. International Business and German / European / International Law -24-
  26. 26. C. International Business (1) Example – taken from an international distribution agreement -25-
  27. 27. C. International Business (2) Example – taken from an international distribution agreement -26-
  28. 28. C. International Business – A continuous example will explain the basics (distribution agreement) Example Germany Contractual relationship Foreign Country Manufacturer, Distributor, Seller Distribution Agreement Purchaser Supply Agreements Distributor, Manufacturer, Purchaser Seller • Which law? I • Which choice of law? II • Which court? III • Which choice of venue? IV • Arbitration? V -27-
  29. 29. C.I. Which Law -28-
  30. 30. C. I. 1 Differentiation between intra European cases and involvement of third countries Outline: Which law to apply? EU Third Countries Rome Convention of 1980 for contractual National law (similar principles): obligations („EVÜ“) - freedom of choice of law „Transformed“ into EGBGB in Germany - grouping of contacts or place of - contractual obligations (Art. 27-37 contract = center of gravity EGBGB) - protection of weaker party and Renvoi - ordre public - non contractual obligations (Art. 38-42 EGBGB) Ordre public - internationally mandatory rules of Choice of law national law Rome-I-Regulation for contractual obligations – coming 12/2009 Rome-II-Regulation for non contractual obligations – effective since 01/2009 „Unified“ in EU (for contractual It differs obligations) Predictable Not predictable -29-
  31. 31. C. I. 2 EU: for contractual obligations the principle of relevant contact (center of gravity) prevails Backup EU: Principles (1) – Relevant Contact Not: - non-contractual obligations (Art. 1 EVÜ, Characteristic performance (Art. 4 EVÜ, 28 38 ff. EGBGB, Art. 1 Rome I) EGBGB, Art. 4 Rome I) - title on real estate (Art. 4 III EVÜ, 28 III EGBGB Even for definable parts of the agreement and lex sedes materiae) - property law (Art. 43 EGBGB und lex rei sitae) Beneficial comparision: - Consumer (Art. 5 EVÜ, 29 EGBGB, Art. 6 Rome I) - Employee (Art. 6 EVÜ, 30 EGBGB, Art. 8 Rome I) Relevant Contact of agreement to national law Assumption (Art. 4 II EVÜ, Material law applicable – no 28 II EGBGB) „renvoi“ (Art. 15 EVÜ, 35 - characteristic performance EGBGB, Art. 20 Rome I) Unless: more closely connected to other country Ordre Public (Art. 4 V EVÜ, 28 V EGBGB) (Art. 6 EGBGB, Art. 21 Rome I) International mandatory law (Art. 34 EGBGB, 7 II EVÜ f. „law of forum“– 7 I EVÜ f. „law of third country“, Art. 9 Rome I) -30-
  32. 32. C. I. 2 EU: Characteristic Performance Details EU: Principles (2) – Characteristic Performance Sales Law of Seller May differ in distribution Work Supply Law of Contractor Law of Service Provider Services as: Distributor Agent (attend: Ingmar-Decision) Franchisee Others -31-
  33. 33. C. I. 3 Third Countries: Principles are similar Difficult to predict Detailed review to Non-EU-Countries: Outline recommend Basics Details Ordre public Freedom of Choice Mandatory rules International contract Grouping of contacts, most significant relationship Specific Performance Place of contract -32-
  34. 34. C. II. Choice of Law -33-
  35. 35. C. II. Choice of law clauses Basic Questions 1. Subject of choice of law? 2. Law to be chosen? 3. How to choose? -34-
  36. 36. C. II. 1 Subject of Choice of Law -35-
  37. 37. C. II. 1 EU: Freedom of choice is predominant for contractual obligations Principles (1) – Freedom of choice Choice of material law (Art. 3 EVÜ, Art. 4 II Completely or partly (Art. 27 I3 EGBGB, 3 I3 EGBGB, Art. 3 Rome I) EVÜ, Art. 3 Rome I); Dépeçage - no renvoi (Art. 15 EVÜ, Art. 35 EGBGB, Escape from inconvenient law !? Art. 20 Rome I) Even for „neutral law“ (Art. 2 EVÜ, Art. 2 Rome I) = law of third country Freedom of choice Art. 3 EVÜ, 27 EGBGB, Art. 3 Rome I But: But: International mandatory law Consumer protection (Art. 5 (Art. 34 EGBGB, 7 II EVÜ – EVÜ, 29 EGBGB, Art. 6 7 I EVÜ, 22 EVÜ, Art. 9 Rome I) Rome I) E.g.: Belgian Distributor Employees (Art. 6 EVÜ, 30 Ordre Public (Art. 6 EGBGB, Art. 21 Rome I) EGBGB, Art. 8 Rome I) Beneficial comparision -36-
  38. 38. C. II. 1 Conclusion Summary Germany Contractual relationship Foreign Country Manufacturer, Distributor, Seller Distribution Agreement Purchaser Supply Agreements Distributor, Manufacturer, Purchaser Seller Choice of law possible? Contractual obligation Not: Non-contractual obligation Not: Property law Not: Competition law -37-
  39. 39. C. II. 2 Law to be chosen? -38-
  40. 40. C. II. 2 The choice of „neutral“ law is not free of doubts – at least outside the EU Details (1) – Freedom of choice „Neutral“ Law (law of third country) EVÜ/EGBGB: possible within the borders of 3 III EVÜ, 27 III EGBGB (pure national contracts and except of mandatory rules) Rome I: as above, even for pure national contracts (Art. 2 Rome I) Non-EU: - depends on national law -39-
  41. 41. C. II. 2 The choice of Soft Law is doubtful Details (2) – Freedom of choice Soft Law (no national law) UNIDROIT Principles, Lando Principles (PECL), lex mercatoria, Sharia etc. EU - no exhaustive application of Soft Law – national law still applicable Non-EU -? It is to differentiate: It is to differentiate: Selection of the law for the whole contract Selection of the law for the whole contract („kollisionsrechtliche Verweisung“) („kollisionsrechtliche Verweisung“) Incorporation of some of the provisions of the choosen law Incorporation of some of the provisions of the choosen law („materiellrechtliche Verweisung“) („materiellrechtliche Verweisung“) -40-
  42. 42. C. II. 2. „Soft Law“ – mostly will only be applicable if agreed or ratified Details (3) – Soft Law - What is it? „Organisations“ Content Application UNCITRAL CISG, New York Convention Partly ratified „Material Law“ UNIDROIT UNIDROIT Principles If agreed (?) ICC Incoterms, If agreed (!) ICC Rules of Arbitration Principles of European Lando - PECL If agreed (?) Contract Law CENTRAL - Lex mercatoria Common or Customary Law If agreed (?) -41-
  43. 43. C. II. 2. „Soft Law“ contains basics of contractual law Details (4) – Soft Law - What does it contain? UNIDROIT Principles Lando (PECL) lex mercatoria ? Application of Principles Application of Principles, General Principles Conclusion of contracts General Principles - Good faith and fair dealing, venire contra factum proprium, Binding character Conclusion of contract pacta sunt servanda, etc. Interpretation Validity, interpretation - Freedom of contract Third party rights Content - Cooperation Performance - Set-off, retention Performance Warranty, Liability Non-performance and Non-performance remedies - Culpa in contrahendo compensation Assignment - Foreseeable loss - Lost profits Set-off Set-off Limitation Assignment, Transfer Limitation Burden of proof Limitation periods Conditions Private International law Interest - Center of gravity test -42-
  44. 44. C.II. Again: What that law is applicable (1) Example – taken from an international distribution agreement -43-
  45. 45. C. II. 3 How to choose? -44-
  46. 46. C. II. 3 Choice of law should be expressed and certain Details (1) – Form of choice Form EU (Art. 3 I EVÜ, 27 I EGBGB, Art. 3 Rome I) - The choice must be expressed or demonstrated with reasonable certainty by the terms of the contract or the circumstances of the case EU (Art. 3 IV EVÜ, 27 III EGBGB, Art. 3 Rome I) - Choice shall be determined by the law which shall be chosen Third countries - Depends on national law difficult to predict -45-
  47. 47. C. II. 3 Problems: Choice of law in General Terms and Conditions Details (2) – Form of choice Choice of law in T&C see ee ciing ng e ; s conv n ttnerr; e conviin c arr n arre pa Inclusion tuall p s a a ac tu ument s nttrra c rgumen t - depends on national law co n off c o ut a rg a age oSG,, bu t ua ge b ang u – CIISG ng - Ideally: written form and enclosure of T&C he lla 2)) – C e nt h C iin t 02,, 44 2 4 T& C 20 02 4 & off T M 20 o WM Conflicting choice of law in T&C surre ue (W ncllo s r 2001 ( c o 2001 d e n be r e - Last shot doctrine an d o be an en orm 1 Oct o n ffo rm 31 O ct - Knock-out-rule wrriitttte ourrtt 3 alllly:: w iigh C o y C u - Center of gravity IIde a rall H gh de H e ra Fed e Fed Language - Allocation of risk: party who wants to include the T&C - Ideally: „Global Language“ or language of contractual partner - Special issue: reference on German letterhead -46-
  48. 48. C. III. Competent Court, Choice of Venue, Enforcement -47-
  49. 49. C. III. Being smart: Stipulations for Conflicts Questions Germany Contractual relationship Foreign Country Manufacturer, Distributor, Seller Distribution Agreement Purchaser Supply Agreements Distributor, Manufacturer, Purchaser Seller What to enforce and where? Who is deciding without a choice of venue? What to be chosen? What is reasonable? A combination of arbitration and ordinary courts? How to choose? -48-
  50. 50. C. III. 1. Enforcement -49-
  51. 51. C. III. 1. Difference between intra EU relationships and relationships with third countries Outline – Recognition and Enforcement EU + EEA Non EU + EEA (third countries) Brussels Regulations ZPO (§§ 328, 722 ff.) in Germany Lugano Convention in EU/EEA - Recogniton (Iceland, Norway, Switzerland) - Procedures National law in third countries - Prevail all national laws - Judgement may not be enforced everywhere - Enforcement in EU + EEA harmonized & possible (at - Better: Arbitration? (Due to New York Convention least in theory) of 1958) -50-
  52. 52. C. III. 2. Competence -51-
  53. 53. C. III. 2. Difference between intra EU relationships and relationships with third countries Outline – Competence of courts EU + EEA Non EU + EEA (third countries) ZPO (§§ 12 ff.) Brussels Regulations - Prevail all national law Lugano Convention in EU - Competent court of seat of defendant Germany (Iceland, Norway, Switzerland) and eventually at place of performance - only in special cases at place of claimant National rules on competence third countries ??? - Prevail all national laws - Competent court at seat of defendant and eventually at place of performance - Only in special cases at place of claimant - Double competence conceivable - Only in special cases at place of claimant -52-
  54. 54. C. IV. Choice of Venue -53-
  55. 55. C. IV. Difference between intra EU relationships and relationships with third countries Outline – Choice of venue National (Germany) EU + EEA Third Countries § 38 II ZPO § 38 II ZPO § 38 I ZPO - No general domestic court in - No general domestic court in - Only merchants Germany Germany - No form, explicit or implicit - Written or in writing and - Written or in writing and confirmed confirmed Respective national law But: Art. 23 Brussels Regulation - Not: consumer, employees - Written or in writing and confirmed - In trade usances -54-
  56. 56. C. V. Arbitration Clauses -55-
  57. 57. C. V. Arbitration Criteria Due to New York Convention of 1958 (140 Member States) better to enforce Selection of Arbitrators International: Not focusing national law/circumstances Free to find applicable law Free to find appropriate procedures – but might be dangerous No publicity Speed? Costs? -56-
  58. 58. C. V. Arbitration Details Comparision in costs* - ordinary courts/arbitration Verfahrenskosten 500.000,00 450.000,00 400.000,00 350.000,00 300.000,00 250.000,00 200.000,00 150.000,00 100.000,00 50.000,00 0,00 Streitwert 50.000 100.000 500.000 1 Mio 5 Mio DIS Kostenrisiko 3 SR (mit RVG Anwälte) 17.615,00 22.955,00 61.565,00 97.165,00 254.165,00 ICC Kostenrisiko Mittel 3 SR (mit RVG Anwälte) 23.027,72 33.668,82 83.973,64 125.414,50 289.402,40 Gericht Kostenrisiko 1. Instanz 6.598,00 9.338,00 23.848,00 35.848,00 131.848,00 Gericht Kostenrisiko 1. und 2. Instanz 14.279,60 20.344,40 52.449,60 78.849,60 290.049,60 Gericht Kostenrisiko 1., 2. und 3. Instanz 24.509,20 34.914,80 89.999,20 135.299,20 497.699,20 * net without in expenses in Germany -57-
  59. 59. C. V. Arbitration Details Comparision in costs* - ordinary courts/arbitration Verfahrenskosten 3.000.000,00 2.500.000,00 2.000.000,00 1.500.000,00 1.000.000,00 500.000,00 0,00 Streitwert 50.000 100.000 500.000 1 Mio 5 Mio 10 Mio 20 Mio 50 Mio 100 Mio DIS Kostenrisiko 3 SR (mit RVG Anwälte) 17.615,00 22.955,00 61.565,00 97.165,00 254.165,00 378.665,00 561.665,00 810.665,00 909.665,00 ICC Kostenrisiko Mittel 3 SR (mit RVG Anwälte) 23.027,72 33.668,82 83.973,64 125.414,50 289.402,40 412.209,65 605.673,50 874.171,95 970.914,70 Gericht Kostenrisiko 1. Instanz 6.598,00 9.338,00 23.848,00 35.848,00 131.848,00 251.848,00 491.848,00 731.848,00 731.848,00 Gericht Kostenrisiko 1. und 2. Instanz 14.279,60 20.344,40 52.449,60 78.849,60 290.049,60 554.049,60 1.082.049,60 1.610.049,60 1.610.049,60 Gericht Kostenrisiko 1., 2. und 3. Instanz 24.509,20 34.914,80 89.999,20 135.299,20 497.699,20 950.699,20 1.856.699,20 2.762.699,20 2.762.699,20 30 Mio. Cap in RVG and GKG * net without in expenses in Germany -58-
  60. 60. D. Distribution -59-
  61. 61. D. I. Effective entry and penetration of markets require activity and knowledge Situation of Principal (Manufacturer) Status quo Objective No presence on market 1 Market entry Presence on market No customer relations 2 Estabilishment of customer relations Customer relations No knowledge about markets 3 Analysis of the market Growing knowledge No huge investments 4 Reasonable activity Efficient structure No fix structures 5 Flexible structure Flexibility No tax implications 6 Tax considerations No tax implications -60-
  62. 62. D. II. Analysis of potential structures and systems Outline Distributor (D) Agent (A) Employee (E) Mostly companies Persons and companies Persons Purchase and sale Constant promotion Protection of employee In own name on own account Solicitation with authority Risk of sales with D Risk of sales with principal Double margins Success related remuneration Clear Clear Branch distinction distinction Tax implications Franchisee Commissioner Freelancer Mixtures Mixtures Concept, CI, CD, Royalties Own name on account of Only on occasion principal -61-
  63. 63. D. II.1. Distributorships – legal character Backup Outline • not clearly stipulated in statutory law • antitrust law applicable => typical limitation (such as exclusivity, non-competition, etc. require legal review) • no compensation – if properly drafted -62-
  64. 64. D. II.2. Agencies – legal character Backup Outline • clearly stipulated in statutory law – all over Europe and maybe beyond • strong protection of distributor: number of advantageous internationally mandatory provisions for agent • no antitrust law applicable – if properly drafted -63-
  65. 65. D. II. Calculation of Compensation Claims (Sec 89b German Commercial Code, HGB) Backup Compensation Claim § 89 b HGB (Germany) – Abstract Compensation claims require Termination of Agreement by expiry of contractual term or mutual understanding without waiver or termination by principal without good cause given by agent or termination by agent with good cause given by principal Base Year Forecasting Horizon Equitableness Cap • normally last year • approx.: 5 years (example) • term Average before effective • churn rate: 20 % (example) • etc. annual termination provision • only new customers within last who became regular 5 years customers New Sum Equitable Compen- Base Year regulars Year 1 Year 2 Year 3 Year 4 Year 5 1 to 5 Amount sation Burden of proof: Agent Burden of proof: Principal -64-
  66. 66. D. II. Calculation of Compensation Claims (Sec 89b German Commercial Code, HGB) – mutatis mutandis for distributors! Backup German Jurisdiction Compensation claims in mutatis mudandis application on distributors According to German jurisdiction the precondition for such mutatis mutandis application under German law is (cumulative): the integration of the distributor into the sales organisation of the company and any obligation (in the agreement or factual) of the distributor to forward customer data (names, addresses, etc.) during the term of the agreement or in the course of its termination to the company. In such cases German jurisdiction applies the rules for goodwill compensation of agencies (Sec. 89 b German Commercial Code) and some other agency provisions (e.g. pertaining to the waiver on compensation in settlements and termination notice etc.) to distributors mutatis mutandis. -65-
  67. 67. D. II. It cuts both ways … Structures and systems – advantages and disadvantages for principal Distributor (D) Agent (A) Employee (E) Risk of sale with D No antitrust law (if properly Strong directives possible No goodwill compensation (if drafted) properly drafted) Success related remuneration Investments by D Knowledge about market Availability of goods Features Features Antitrust law, limited directives Risk of sale with principal Costs Double margins Goodwill compensation Employee protection Limited forwarding of market mandatory knowledge Costs -66-
  68. 68. D. II. Chances and risks must be balanced Outline of chances and risks Distributor (D) Agent (A) Allocations of risks Risks Strong directives and Risks No goodwill compensation exhaustive reports on market Antitrust rules on Success related Employment law (?) restrictions remuneration Interests protection Potential goodwill Goodwill compensation compensation mandatory Chances Chances -67-
  69. 69. D. II. Advise necessary Commission as ”best of both worlds“ – concept? Distributor or Agent Chances Risks -68-
  70. 70. F. Antitrust Law – on Vertical Agreements -69-
  71. 71. Article 81 – Treaty of Rome (similar in German law – GWB) 1. The following shall be prohibited as incompatible with the common market: all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the common market, and in particular those which: (a) directly or indirectly fix purchase or selling prices or any other trading conditions; (b) limit or control production, markets, technical development, or investment; (c) share markets or sources of supply; (d) apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage; (e) make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts. 2. Any agreements or decisions prohibited pursuant to this article be automatically void. 3. The provisions of paragraph 1 may, however, be declared inapplicable in the case of: - any agreement or category of agreements between undertakings, - any decision or category of decisions by associations of undertakings, - any concerted practice or category of concerted practices, which contributes to improving the production or distribution of goods or to promoting technical or economic progress, while allowing consumers a fair share of the resulting benefit, and which does not: (a) impose on the undertakings concerned restrictions which are not indispensable to the attainment of these objectives; (b) afford such undertakings the possibility of eliminating competition in respect of a substantial part of the products in question. -70-
  72. 72. F. I. Antritrust law – in Germany, Europe and third countries Outline National (GWB) EU + EWR Third countries GWB Art. 81 ff. EGV Respective national law - § 1 GWB „Prohibition“ Block exemptions - § 2 GWB „Exemptions“ leads - Vertical Agreements - Technology Transfer to EU Block exemptions - R&D - Specialisation - Vehicle Distribution - etc. + Guidelines De-minimis Notices => market share (5% / 10% / 15% / 30%) – applied in Germany as well -71-
  73. 73. F. II. Systematic review is required System (for vertical agreements) 1 3 4 Restraint? Beyond de minimis? Exemption? if no free to decide about De-minimis-Note, Marketshare hardcorerestrictions, already activity for de minimis test of - < 10 % for Competitors importance 2 - < 15 % for Non Competitors Vertical or horizontal? - < 5 % in cumulative Systems > 30 % Marketshare of Supplier between (at least potential) Competitors Other preconditions on Block horizontal Exemption for vertical agreements different level of production or distribution (Not-Competitors) vertical Definition of relevant market very important -72-
  74. 74. F. III. Typical Restraints Outline Price Fixation => hardcore restriction! Restriction in Territory => depends on active/passive trade and market share Exclusivity => depends on restriction for buyer or seller and marketshare etc. Non compete obligations => depends on marketshare and term etc. -73-
  75. 75. Thanks for your attention! Berlin Dubai Hamburg Alicante Ebertstraße 15 28th Floor, Al Moosa Tower II HTC – Am Sandtorkai 41 Paseo Explanada de Espana No. 1 D-10117 Berlin Sheikh Zayed Road D-20457 Hamburg E – 03002 Alicante, Spanien Tel. +49 (0)30 885636-0 P.O. Box 33675 Dubai Tel. +49 (0)40 36803-0 Tel. +34 (0)96 5142805 Fax +49 (0)30 885636-100 Tel. +971 (4) 3 32 33 24 Fax +49 (0)40 36803-280 Fax +34 (0)96 5200248 berlin@taylorwessing.com Fax +971 (4) 3 32 33 25 hamburg@taylorwessing.com alicante@taylorwessing.com dubai@taylorwessing.com Brussels London Beijing Trône House Düsseldorf No. 5 New Square Street Unit 1503, Tower 2, Prosper Center 4 Rue de Trône Benrather Straße 15 London EC4A 3 TW No. 5, Guanghua Road, B-1000 Brussels D-40213 Düsseldorf United Kingdom Chaoyang District Tel. +32 (0)2 2896060 Tel. +49 (0)2118387-0 Tel. +44 (0)20 7300 7000 Beijing 100020 Fax +32 (0)2 2896070 Fax +49 (0)2118387-100 Fax +44 (0)20 7300 7100 People‘s Republic of China brussels@taylorwessing.com duesseldorf@taylorwessing.com london@taylorwessing.com Tel. +86 (10) 85 87 58 86 Fax +86 (10) 85 87 58 85 Neuss Munich beijing@taylowessing.com Am Krausenbaum 42 Isartorplatz 8 Shanghai D-41464 Neuss D-80331 München 15th Floor United Plaza, Unit 1509 Tel. +49 (0)2131 74030-0 Tel. +49 (0)89 21038-0 No. 1468, Nanjing West Road Fax +49 (0)2131 74030-50 Fax +49 (0)89 21038-300 200040 Shanghai neuss@taylorwessing.com muenchen@taylorwessing.com Tel. +86 (0)21 62477247 Fax +86 (0)21 62477248 Frankfurt a. M. Paris shanghai@taylorwessing.com Senckenberganlage 20-22 42, Avenue Montaigne D-60325 Frankfurt a.M. F-75008 Paris Warszawa Tel. +49 (0)69 97130-0 Tel. +33 (0)172 740333 BSJP – Focus Office Building Fax +49 (0)69 97130-100 Fax +33 (0)172 740334 Al. Armii Ludowej 26 frankfurt@taylorwessing.com paris@taylorwessing.com PL-00-609 Warszawa, Poland Tel. +48 (22) 579 89 00 Fax +48 (22) 579 89 01 taylorwessing@bsjp.pl -74-
  1. A particular slide catching your eye?

    Clipping is a handy way to collect important slides you want to go back to later.

×