Legal Question in Business Law in California
The beauty product company, Dermalogica wants to cancel my account as a customer supplying to my clients. Their issues are that I don't meet their required stocked amount on the shelves, amount sold per 6 months, display in shop etc. I do not owe them any money. It cost me around $6500 to be able to stock dermalogica & receive their products at wholesale prices. I have been told that legdally dermalogica cannot do this that once they accept you as an account they just can't cancel it? Do you know if this is true?
4 Answers from Attorneys
Did you sign a contract with them? What does it say? Do you still have a copy?
There are cases holding that someone who invests money to become someone's distributor should be allowed sufficient time and opportunity to recover their initial investment. Whether the facts of your situation will fit the pattern or rule of those cases would have to be determined by a business lawyer upon review of your contract and the totality of the circumstances.
Read your contract with them. It determines all your rights.
As a Franchise Attorney I can say this. When the Derm accepted you, it was most likely on their terms and conditions - including required inventory amounts, etc. Read your contract with them, carefully. Then consult with a good business or franchise attorney in your area for specific advice.
Mr. Franchise - Kevin B. Murphy, B.S., M.B.A., J.D.
Franchise Foundations, a Professional Corporation
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