In a conventional retailer cooperation in a selective distribution system, the standard contract forms part of the clauses, which the parties must comply. The standard contract is already drawn up, and the parties hereby fill the last clauses out, according to their wishes. Case law in this area shows that the manufacturer and the distributor in some cases have a very long-term cooperation of several years and decades. This means that the distributor has conducted many years of relationshipspecific investments in the collaboration, based on the goodwill associated with the manufacturer's products. Case law also indicates that the distributors investment in goodwill will not be satisfied due to the parties' form of cooperation does not allow it. This causes a dilemma in which the distributor does not have a desire to invest too much into the cooperation for the fear of being terminated. The threats of being terminated are caused by vertical integration or a performance by the distributor under level. These threats are the core of the distributors termination dilemma, and are the main reason why the full sales potential of the distributors market in many cases are not being utilized optimally. It will prove to be a favourable situation for the parties on the distributors market, when the standard contract is instead replaced by a contract based on proactive clauses and a closer collaboration, in which both parties make relationship-specific investments. Proactivity and open dialogue will contribute to an economic advantage in the downstream market, for example in the form of competitive advantage through knowledge sharing. In addition, the parties' joint commitment to cooperation can be used as a safeguard of termination, and thus contribute to the utilizing of the distributors market full sales potential. The development of the relational contract based on proactive clauses is made in common, and hereby helps both parties have equal bargaining power from the start. A longer period of negotiation and a longer start-up period will be the consequents of replacing the standard contract with a contract that will be drawn up jointly, and this will result in an increase of the costs ex ante. It turns out, however, that the parties on the other hand will save on the running costs of cooperation, by having a complete contract available from the start. In addition, costs associated with the termination of the contract, will be minimized due to the long association that the parties has created.
|Educations||MSc in Commercial Law, (Graduate Programme) Final Thesis|
|Number of pages||136|