Legal Question in Business Law in California
Geographical limits of a market
In a contract where the owner (first party) of a product grants exclusive rights for the sale of that product to a wholesaler (second party), without competition from other companies in the market for a certain amount of time, what constitutes the geographical boundries of such a market? There is no further detail in the contract as to what the boundries/limitations of this ''market'' are. The franchises owned by the second party reside only in the US. Has there been a breach of contract if the first party sells the same product to a company in Canada within the time frame the second party was granted exclusive selling rights?
Can you please refer me to any law that deals with such a topic? Any additional resources on looking further into this topic would be greatly appreciated.
2 Answers from Attorneys
Re: Geographical limits of a market
This is a very open-ended question, and there isn't any quick or conclusive answer based on the facts given. It will probably come down to what the parties intended by signing the contract, which will be a fact-intensive issue revolving around negotiations, statements made by the parties, etc.
Feel free to call me if you want to discuss this further.
Re: Geographical limits of a market
Your franchise rights are governed by the contract. If it wasn't well drafted, oh well, you are left with attempting to reach agreement on the terms after the fact. There essentially no 'law' defining such terms, since the parties were supposed to define them. If the parties can't agree now, there is always a lawsuit for 'breach of agreement' if you have adequate grounds. You should consult with an attorney to see what can be done now, after the fact. Contact me if interested in doing it right.
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