Ruling: commercial relationship between distributor and supplier without a written contract

Alejandro Alonso, a partner in the commercial law department, analyses a recent ruling on the commercial relationship between a distributor and a supplier without a written contract in his article for VPC Magazine. Faced with the manufacturer's decision to terminate the relationship with less than one month's notice, the distributor decided to sue for lack of cause.

Our commercial lawyer details the Supreme Court's ruling: ‘in contracts of indefinite duration, the parties have the ability to terminate the contract without being required to allege cause, that is, both parties can decide to end the commercial relationship of their own volition, without the need for a breach, conflict or specific economic reason, as no one is obliged to remain bound in perpetuity’. However, he adds: ‘It is necessary to act in good faith, i.e. to behave honestly and loyally.’ 

In a commercial relationship without a written contract, as in this case, our expert explains that ‘the distribution contract does not have specific legal regulations, as is the case with agency contracts, and therefore it is important to be aware of how our courts interpret it in order to avoid liability.’