Many situations arise that may necessitate a company terminating one, some, or all of the companies that distribute its products to end-users. For example, you may be looking to sell a division or product line to a purchaser with its own distribution network, or the company’s business strategy may involve moving away from brick-and-mortar sellers to online sales, or moving to a captive distribution system. In the United States, the termination of a dealer potentially raises a whole host of legal issues and may expose the terminating supplier to liability under many different legal theories.

This article sets forth a checklist in-house counsel can consult when faced with a dealer-termination scenario. This brief article necessarily is not comprehensive (depending on what jurisdiction(s) you are in, there may be other potential sources of risk), but it provides a framework for spotting issues.

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