Attorney mag. Sebastjan Kerčmar, LL.M., as an expert in franchise law of the International Distribution Institute (IDI), attended an international conference in Bologna from June 8th to 10th, 2023. The law firm’s trainee, Marjanca Ambrožič, also participated in the conference. The Institute organizes an annual conference every year, which is attended by legal experts from around the world, focusing on current issues in the field of distribution, franchising, agency relationships, and related matters. The main theme of this year’s conference was the restrictions on the freedom of contract, specifically to what extent one can trust that their distribution, franchise, or agency agreement will not be differently interpreted or modified by the courts.
Distribution and franchise agreements are almost always concluded between parties having a different negotiating power. Thus, the relationship between supplier and distributor, and especially that between franchisor and franchisee, is generally characterised by an imbalance between the parties. Lawmakers and courts tend to deal with this issue by protecting in various ways the “weaker” parties against possible abuses of their counterparts. This “rebalancing” of the respective positions can be made by imposing protective rules regarding specific situations (such as rules providing minimum terms for termination), or through the recourse to more general rules (like good faith or abuse of economic dependence) applied by the courts (or other authorities) to specific situations of imbalance.
The material impact of this protective trend varies substantially from country to country, due to the difference of legal rules and principles in force. Thus, common law courts tend to privilege the strict observance of the provisions agreed between the parties, while civil law courts are more inclined to “correct” or annul imbalanced clauses.
The purpose of our Yearly Conference 2023 was to analyse these less foreseeable situations in the light of the case law of various countries and to discuss a number of critical clauses and situations, in view of identifying possible alternative solutions which may achieve a reasonable balance between the interests of franchisors/suppliers and their “weaker” counterparts.
