Legal Question in Business Law in Texas

Restrict sale of products.

We are a distributor/wholesaler for various smoking products and tobaccos. Our products are used in restaurants and bars around the world. We had a verbal agreement with customer 1 (Cafe/Bar) that he would be our exclusive distributor in a given area of town. We have however some employees that did not know our agreement so we sold few times to 2 other customers (Customer 2 and Customer 3 - Both are Bar/Cafes) in Customer 1's area by accident and when notified we immediately stopped accepting any new orders. We have been treated with law suits by customer 2 citing antitrust/monolpy violations. My questions is that does our business have the right to not sell to another busines a product that we make or distribute. Selling to Customer 2 and Customer 3 has become a liability to our business and it is not in our interest even if we never had an agreement with customer 1. Customer 2 has purchased $345.00 worth of a product specific to our company and now says that if we do not supply it, if they go out of business it will be our fault. However, it is known that Customer 2 is already financially unstable and might go out of business anyways.


Asked on 1/24/07, 9:14 pm

1 Answer from Attorneys

Peter Bradie Bradie, Bradie & Bradie

Re: Restrict sale of products.

Get a written agreement that #1 is exclusive distributor for a designated area.

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Answered on 1/25/07, 3:51 pm


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