Newsletter-21

9 COMMERCIAL LAW Conclusion It is common that agency and distribution contracts provide a minimum order undertaking, and entitle the principal or supplier to terminate the contract without a notice period, to cancel the agent’s or the distributor’s exclusivity, to reduce the territory allocated to the agent or the distributor, and to claim damages for non-attainment. In accordance with the relevant provisions, the principal or the supplier is entitled to damages in the amount of its loss of profit due to the missing order in the relevant year. In the event the principal or the supplier continues to be bound by the contract although being aware of the non-attainment, i.e. the breach of contract, whether or not the loss of profit for the past years may be claimed may differ depending on applicable laws. In such cases, the facts of each specific case should be evaluated. The Turkish Court of Cassation has rendered differing decisions on the subject. Claiming for the previous years’ damages, although the contract has continued, is usually deemed as a violation of the good faith principle, and it is accepted that the principal or the supplier has tacitly waived its claims pertaining to the previous years’ damages, and that it can request the compensation of its damages only for the period in which it terminated the contract.