Legal Question in Business Law in Illinois

Re: distributors rights

In most cases, the answer is that you cannot get compensated for termination of a distributor agreement. Illinois, unlike a number of other states, has no broad protection against termination of a distributorship agreement without cause.

There are avenues of potential recourse:

1. Your contract may contain a provision that gives you rights.

2. In some cases, a distributorship has been held to constitute a "franchise" under Illinois law and the distributor has been able to recover damages under the Franchise Act.

3. Illinois law incorporates a "duty of fair dealing" into contracts and the termination may breach that duty.

So, there may be avenues for you to pursue if you are so inclined, but unless you have a great set of facts, you need to understand that you are facing an uphill battle.

David K. Staub, business attorney