Relationship Expectations Review Resolves a Distributor Termination Dispute
A European consumer goods company terminated its exclusive distribution agreement with a Southeast Asian distributor after a single quarter of missed sales targets, and the distributor sued for wrongful termination, arguing the sudden move without an escalating dialogue violated the good-faith dealing norms both parties had followed for years, in a dispute over terminated contract value. The distributor retained a cross-cultural business expert with experience in Southeast Asian commercial relationship norms to review the parties' correspondence history, prior instances of underperformance, and how those had been handled earlier in the relationship. The expert found that in each of three prior underperformance episodes, the manufacturer had followed a documented pattern of in-person relationship-repair meetings before any termination discussion, a pattern abruptly abandoned this time. That finding supported the distributor's argument that termination departed from the parties' own course of dealing and was central to a settlement including a wind-down period and partial compensation.