Demand letter strategies for distribution and reseller disputes: territory violations, exclusivity breaches, MAP pricing violations, minimum purchase requirements, and grey-market conflicts

📤 Manufacturer Demand Against Distributors/Resellers

Distribution agreements create valuable but often-violated rights. When distributors breach territory restrictions, violate MAP pricing, miss minimum purchase requirements, or engage in grey-market sales, manufacturers have contractual and sometimes statutory remedies. Here's how to structure effective demands.

⚖️ Common Distribution Breach Scenarios
  • Territory violations: Distributor granted exclusive rights to California actively sells or solicits in Oregon distributor's territory.
  • MAP (Minimum Advertised Price) violations: Distributor advertises products below manufacturer's MAP policy, undermining brand positioning and other channel partners.
  • Minimum purchase failures: Distributor committed to $500k annual purchases but only orders $200k, losing exclusivity rights or facing termination.
  • Grey-market / unauthorized channels: Distributor sells through Amazon, eBay, or discount channels prohibited by agreement, or supplies unauthorized sub-distributors.
  • Trademark misuse: Distributor uses manufacturer's trademarks in unapproved marketing, creates misleading product listings, or implies unauthorized endorsements.
  • Diverted goods: Distributor purchases at wholesale prices for one market, then diverts to higher-profit markets in violation of territory restrictions.
When to Send Manufacturer's Breach Demand
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Clear Written Distribution Agreement Your contract explicitly defines territories, exclusivity conditions, pricing policies, minimum purchase requirements, and approved sales channels.
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Documented Breach Evidence You have proof of territory sales (shipping records, customer orders), MAP violations (screenshots of ads, retailer websites), or channel violations (marketplace seller accounts).
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Harm to Brand or Other Channels The breach damages your brand positioning, causes other distributors to complain, or undermines your pricing strategy and market segmentation.
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Prior Notice (If Required) Your agreement may require cure notice before termination. If so, you've given notice and distributor failed to cure within specified timeframe.
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No Ambiguous Waiver You haven't consistently waived similar violations in the past, which could estop you from enforcing now. If you previously allowed some flexibility, address this in your demand.
Structuring Manufacturer's Demand Letter
📝 Essential Components for Manufacturers
  1. Agreement and Territory/Channel Definitions: Quote relevant sections defining exclusive territories, approved channels, pricing policies, or minimum purchases. Attach agreement as exhibit.
  2. Specific Breach Documentation: Detail the violations with dates, locations, evidence (screenshots, customer complaints, shipping records). For MAP violations, include screenshots showing advertised prices below MAP.
  3. Harm to Manufacturer: Explain how breach harms your brand, other channel partners, or market strategy. Include complaints from other distributors if applicable.
  4. Prior Notice and Cure Opportunities: If you gave prior warnings, reference them with dates. If contract requires cure notice, show that cure period expired without compliance.
  5. Consequences and Remedies: State what you're demanding: (1) immediate cessation of violations; (2) contract termination; (3) damages (lost profits from territory interference, MAP violation penalties if in contract); or (4) return of inventory and materials.
  6. Trademark and Marketing Restrictions: If distributor is terminated, demand cessation of trademark use, removal of product listings, and return or destruction of marketing materials bearing your marks.
  7. Liquidated Damages: If your agreement includes liquidated damages for MAP violations or territory breaches, calculate and demand these amounts.
  8. Future Relationship Conditions: If you're willing to continue relationship conditional on compliance, state specific corrective actions required and monitoring terms.
  9. Deadline: Typically 10-15 business days for cease-and-desist, immediate for termination effective date.
  10. Arbitration/Governing Law: Note dispute resolution provisions if applicable.
⚠️ MAP Policies vs. Price Fixing

Legal distinction: Minimum Advertised Price (MAP) policies restrict how distributors advertise prices but don't control actual sale prices. This is generally legal. Minimum Resale Price agreements that fix actual selling prices are per se illegal under federal antitrust law.

Enforcement strategy: MAP policies must be unilateral (manufacturer's policy, not negotiated agreement) and consistently enforced. In your demand letter, frame MAP as your unilateral policy, reference prior communications establishing the policy, and note that enforcement (termination) is your independent business decision, not a negotiated price-fixing agreement.

Territory and Exclusivity Issues

Territory restrictions are generally enforceable in distribution agreements but require clear drafting:

  • Exclusive territory: No other distributor appointed in territory, and manufacturer won't sell directly. Strongest protection for distributor, but limits manufacturer flexibility.
  • Exclusive rights with exceptions: Common structure—distributor has exclusive rights but manufacturer reserves right to sell direct to major accounts or through online channels.
  • Non-exclusive territory: Distributor has no exclusivity; manufacturer can appoint competing distributors. Weakest protection but easier to enforce violations.
  • Customer-based vs. geographic territories: Some agreements grant exclusivity by customer type (e.g., retail vs. industrial) rather than geography. Define clearly in demand letter.
💡 Grey-Market and Online Marketplace Violations

Common problem: Distributor creates unauthorized Amazon, eBay, or Walmart Marketplace seller accounts in violation of approved-channel restrictions. Manufacturers often discover this through brand monitoring services or customer complaints about unauthorized sellers.

Evidence strategy: Screenshot seller account pages showing product listings, capture "Ships from" or "Sold by" information proving distributor identity, document pricing below MAP or authorized retail. Many distributors use shell companies or third-party fulfillment, so you may need investigative purchases to confirm identity.

Minimum Purchase Requirements and Exclusivity Conditions

Many distribution agreements condition exclusivity on minimum purchase volumes:

  • "All or nothing" structure: Distributor loses all exclusivity if they miss minimum by any amount. Harsh but clear.
  • Tiered exclusivity: Different purchase levels trigger different territory sizes or exclusivity scopes. More flexible but complex to administer.
  • Cure rights: Distributor has X days to cure shortfall by placing make-up order. Reduces disputes but delays enforcement.

In your demand letter, calculate the shortfall precisely, reference the contract provision linking purchases to exclusivity, and state whether exclusivity is terminated or subject to cure.

📨 Distributor Demand Against Manufacturers

Distributors also have enforceable rights under distribution agreements. When manufacturers breach exclusivity, fail to supply, engage in line-dumping, or terminate wrongfully, distributors can demand damages or specific performance.

⚖️ Common Manufacturer Breaches
  • Exclusivity violations: Manufacturer granted you exclusive California territory but directly sells to California customers or appoints competing distributor.
  • Failure to supply: Manufacturer fails to fill orders, creates artificial shortages to pressure price increases, or prioritizes other distributors.
  • Line-dumping: Manufacturer sells slow-moving or discontinued products to your territory at deep discounts through other channels, undermining your inventory investment.
  • Direct sales encroachment: Manufacturer establishes competing direct-to-consumer channel (online store, company-owned retail) in your exclusive territory without compensation or adjustment.
  • Wrongful termination: Manufacturer terminates agreement without cause, without required notice, or in retaliation for your complaints about their breaches.
  • Failure to provide support: Manufacturer agreed to provide marketing support, training, or warranties but fails to deliver, harming your sales.
When to Send Distributor's Demand
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Clear Exclusivity Rights Your contract explicitly grants exclusive distribution rights in defined territory, and manufacturer's breach is documented (direct sales records, competing distributor evidence).
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You Performed Your Obligations You met minimum purchase requirements, maintained approved sales channels, followed MAP policies, and complied with other material terms.
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Quantifiable Damages You can calculate lost sales from manufacturer's territory incursions, value of stranded inventory from line-dumping, or lost profits from wrongful termination.
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Notice Rights Exercised You raised concerns with manufacturer and requested compliance, giving them opportunity to cure before escalating to formal demand.
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Termination Was Wrongful If manufacturer terminated you, the termination violated contract terms (insufficient notice, no cause, or retaliation for protected complaints).
Structuring Distributor's Demand Letter
📝 Essential Components for Distributors
  1. Agreement and Exclusivity Rights: Quote sections granting exclusive territory or other protected rights. Highlight manufacturer's obligations (supply, exclusivity, support).
  2. Your Performance: Show that you fulfilled all material obligations—met purchase minimums, maintained approved channels, invested in territory development.
  3. Manufacturer's Breach: Document specific violations with dates and evidence—direct sale records, competing distributor listings, supply denials, or wrongful termination notice.
  4. Damages Calculation: Calculate lost profits from manufacturer's territory incursions, stranded inventory costs from line-dumping, or lost future profits from wrongful termination.
  5. Reliance and Investment: Describe your reliance on exclusivity—inventory purchased, marketing investments, sales staff hired, customer relationships developed—to show why breach is particularly harmful.
  6. Demand for Relief: State what you're seeking: (1) specific performance (stop direct sales, honor exclusivity); (2) monetary damages; (3) inventory buy-back; or (4) contract reinstatement if wrongfully terminated.
  7. Mitigation: Note your duty to mitigate damages but explain how manufacturer's breach makes mitigation difficult (can't sell products you can't get, can't develop territory you don't have exclusive rights to).
  8. Franchise Law Considerations: Some states have franchise relationship laws protecting distributors from wrongful termination or requiring good cause. Cite these if applicable.
  9. Deadline: 15-20 business days for manufacturer response and cure.
  10. Arbitration Notice: Reference dispute resolution provisions and note intent to arbitrate if not resolved.
⚠️ Franchise Relationship Laws

Some states (including California, Wisconsin, New Jersey) have "franchise relationship laws" or "dealer protection statutes" that protect distributors from wrongful termination even if contract is "at will." These laws typically require:

  • Good cause for termination: Manufacturer must prove material breach, failure to meet standards, or legitimate business reason.
  • Notice and cure rights: Manufacturer must give advance notice (often 90 days) and opportunity to cure before terminating.
  • Compensation for investment: Some statutes require compensation for distributor's investment in territory development.

Strategy: If your distribution relationship may qualify as a "franchise" under state law, cite these protections prominently in your demand letter and argue termination violates statutory requirements.

Exclusivity Breach Damages

Calculating damages for manufacturer's exclusivity violations:

  • Lost profits from diverted sales: If manufacturer directly sold $100k in your territory and you typically earn 30% margin, your lost profit is $30k.
  • Diminished territory value: If manufacturer's encroachment reduces your total territory sales by 20%, calculate 20% of your historical profits for the period.
  • Inventory losses: If you purchased inventory in reliance on exclusivity and can't sell it due to manufacturer's competing sales, demand buy-back at your cost.
  • Investment recovery: Marketing spend, sales staff costs, or infrastructure investments made in reliance on exclusive rights that are now wasted.
💡 Line-Dumping as Breach of Good Faith

Even if your contract doesn't explicitly prohibit it, manufacturer's sale of discontinued or slow-moving inventory into your territory through unauthorized channels (closeout websites, discount retailers) may breach implied covenant of good faith and fair dealing.

Argument: You invested in inventory and territory development based on understanding that manufacturer wouldn't undermine your market with competing discount sales. Line-dumping destroys your ability to sell existing inventory and damages customer relationships. Courts may find this violates good-faith obligation even without explicit contract prohibition.

Wrongful Termination Claims

If manufacturer terminated your distribution rights, evaluate:

  • Termination provisions: Does contract require cause, notice period, or cure opportunity? If so, did manufacturer comply?
  • At-will vs. for-cause: Even "at-will" agreements may be limited by franchise laws, good-faith obligations, or implied duration based on your investments.
  • Retaliation: Did manufacturer terminate after you complained about their breaches, refused illegal demands, or exercised legal rights? Retaliatory termination may be wrongful even under at-will contract.
  • Notice period: Many agreements require 30, 60, or 90 days' notice. Immediate termination may be wrongful unless you committed material breach.

In your demand letter, argue termination was wrongful under contract terms or applicable law, calculate damages based on expected future profits (often 1-3 years depending on investment recovery periods), and demand reinstatement or buyout.

📋 Evidence Checklist for Distribution Disputes
For Manufacturers (Enforcing Against Distributors)
📄
Distribution Agreement Written contract defining territories, exclusivity, minimum purchases, approved channels, MAP policies, and termination provisions. Include all amendments and side letters.
🗺️
Territory Breach Evidence Customer orders showing distributor sold outside territory, shipping records to out-of-territory addresses, customer complaints from other distributors, or distributor's own records if accessible.
💰
MAP Violation Documentation Screenshots of distributor's website, retailer ads, marketplace listings showing advertised prices below MAP. Include dates and URLs. Compare to your published MAP policy.
📦
Purchase History and Minimums Distributor's order history showing actual purchases vs. contracted minimums. Show annual or quarterly shortfalls clearly.
🌐
Unauthorized Channel Evidence Amazon, eBay, or other marketplace seller accounts linked to distributor, unauthorized sub-distributor relationships, or sales through prohibited channels. Include investigative purchase receipts if you made test buys.
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Prior Warnings Emails or letters where you notified distributor of violations, requested cure, or warned of termination. Shows good faith and preserves your enforcement rights.
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Harm to Brand or Other Channels Complaints from other distributors, evidence of price erosion in market, customer confusion from unauthorized listings, or brand reputation damage from grey-market sales.
For Distributors (Claims Against Manufacturers)
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Distribution Agreement Contract granting exclusive rights, defining manufacturer's supply obligations, and protecting your territory. Highlight provisions manufacturer breached.
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Your Performance Records Purchase orders showing you met minimums, sales data proving territory development, marketing investments, and compliance with all material contract terms.
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Manufacturer's Territory Violations Evidence of manufacturer's direct sales in your territory—customer orders from manufacturer website, competing distributors appointed in your territory, or manufacturer's sales team directly soliciting your customers.
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Lost Sales Documentation Your sales records before and after manufacturer's breach, showing decline in territory performance. Identify specific lost customers or orders caused by manufacturer's competing sales.
📧
Supply Failure Evidence Your purchase orders that manufacturer failed to fill, emails requesting product with manufacturer's refusals or delays, and evidence other distributors received priority over you.
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Investment and Reliance Receipts and records of your investment in territory development—marketing spend, sales staff hired, inventory purchased, warehouse leased—showing reliance on exclusive rights.
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Termination Documentation If wrongfully terminated, preserve termination notice, compare to contract notice requirements, and show you received insufficient notice or no good-cause justification.
💡 Investigative Purchases and Brand Monitoring

For grey-market and unauthorized channel disputes, manufacturers should:

  • Make test purchases: Buy products from suspected unauthorized sellers to obtain shipping records, invoices, and product authentication proving diversion.
  • Use brand monitoring services: Services like TrackStreet, BrandVerity track MAP violations and unauthorized sellers across Amazon, eBay, Google Shopping.
  • Preserve web evidence carefully: Screenshots alone may not be admissible. Use web archiving services or hire forensic investigators for litigation-grade evidence.
  • Product serial number tracking: If products have serial numbers, track which units were sold to which distributors, then match against unauthorized listings.
💰 Settlement Dynamics in Distribution Disputes

Distribution disputes create complex settlement pressures because both parties typically want to preserve business relationships while protecting contractual rights. Understanding typical outcomes helps frame realistic demands.

📊 Typical Settlement Outcomes
  • MAP violations (first offense): Warning with cease-and-desist, rarely monetary damages. Repeat violations: termination or liquidated damages (if in contract).
  • Territory violations by distributor: Termination of exclusivity rights, contract termination, or 30-60% reduction in future territory size as compromise.
  • Territory violations by manufacturer: 40-70% of lost profits compensation, or increased margins/reduced minimums to compensate for lost exclusivity value.
  • Minimum purchase failures: Loss of exclusivity but continued non-exclusive distribution, or grace period to cure shortfall with reduced future minimums.
  • Wrongful termination by manufacturer: 50-200% of annual distributor profits as buyout (1-2 years of expected profits), or contract reinstatement with modified terms.
  • Grey-market violations: Immediate termination for egregious cases, or consent agreement with monitoring and liquidated damages for future violations.
Factors Increasing Manufacturer Recovery/Enforcement
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Clear Written Restrictions Detailed contract provisions defining prohibited conduct, with specific liquidated damages or termination provisions for violations.
⚖️
Consistent Enforcement History You've enforced similar violations against other distributors, showing this isn't selective or discriminatory enforcement.
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Documented Brand Harm Evidence that violations damaged your brand positioning, caused other distributors to complain or threaten to leave, or eroded pricing across all channels.
📧
Prior Warnings Ignored You gave distributor notice and opportunity to cure, and distributor continued violations or failed to respond—shows bad faith.
Factors Increasing Distributor Recovery
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Strong Performance History You consistently exceeded minimums, developed territory, invested in marketing, and demonstrated high-quality distribution—making manufacturer's breach particularly damaging.
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Quantified Reliance Investment You can prove substantial investments (inventory, marketing, staff, infrastructure) made in reliance on exclusive rights, and these investments are now stranded.
🏛️
Franchise Law Protection Your relationship qualifies as a franchise under state law, giving you statutory protection against wrongful termination and requiring good cause.
📉
Clear Lost Sales Causation You can show specific customers or sales lost directly to manufacturer's competing sales, not general market decline or your own performance issues.
💡 The Modified Territory Compromise

Many territory disputes settle with restructured rights rather than all-or-nothing outcomes:

  • Example: Distributor had exclusive California rights but sold into Oregon. Settlement: Distributor keeps non-exclusive California rights (loses exclusivity), prohibited from Oregon permanently, and pays $X from Oregon sales as compensation.
  • Why it works: Manufacturer preserves Oregon distributor relationship, breaching distributor keeps reduced California rights, both avoid litigation costs and termination complexities.
  • When to use: First-time violations, established distributor relationships worth preserving, and ambiguous contract language that makes litigation outcome uncertain.
Arbitration in Distribution Disputes

Many distribution agreements require arbitration. Key considerations:

  • Industry arbitrators: Arbitrators with distribution/channel experience may understand commercial realities better than judges or juries.
  • Confidentiality: Arbitration keeps sensitive pricing, territory, and financial information confidential, protecting both parties' competitive positions.
  • Speed: Arbitration typically resolves in 8-15 months vs. 18-36 months for trial, critical when business relationships are collapsing.
  • Limited injunctive relief: Some arbitration clauses limit preliminary injunctions, making it harder to get emergency stop-orders for ongoing violations.
⏱️ Realistic Timelines
  • Demand letter to response: 10-20 days
  • Negotiation phase: 30-90 days
  • Mediation (if used): 60-120 days from demand
  • Arbitration to award: 8-15 months from filing
  • Litigation to trial: 18-36 months from filing
✍️ Distribution Dispute Demand Letter Snippets
Manufacturer Opening – Territory Violation
This letter constitutes formal notice of breach of our Distribution Agreement dated [DATE] and demand for immediate cessation of territory violations. Under Section [X] of our agreement, you were granted exclusive distribution rights in [TERRITORY A], with strict prohibition on sales or solicitation in [TERRITORY B], which is assigned exclusively to [OTHER DISTRIBUTOR]. You have materially breached this provision by [DESCRIBE VIOLATION: e.g., "directly selling to customers in Territory B, as evidenced by shipping records showing deliveries to Territory B addresses" / "actively soliciting Territory B customers through online advertising targeting Territory B zip codes"]. This breach undermines our entire distribution strategy, harms [OTHER DISTRIBUTOR]'s territory investment, and violates the fundamental exclusivity structure of our network.
MAP Violation Notice
You are in violation of our Minimum Advertised Price (MAP) policy, which was communicated to you on [DATE] and acknowledged in your agreement under Section [X]. Our MAP policy requires that you advertise [PRODUCT] at no less than $[MAP PRICE]. On [DATES], you advertised the product at $[LOWER PRICE] on [PLATFORM/WEBSITE], as shown in the attached screenshots (Exhibit A). MAP violations harm our brand positioning, undermine pricing discipline across all channels, and have caused [NUMBER] of our other distributors to complain or threaten termination. Under Section [X] of our agreement, MAP violations are grounds for immediate termination. We demand that you: 1. Immediately remove all advertisements pricing [PRODUCT] below MAP 2. Confirm in writing within 3 business days that you will comply with MAP policy going forward 3. Pay liquidated damages of $[AMOUNT] as specified in Section [X] of our agreement Failure to comply within 5 business days will result in termination of your distribution rights.
Minimum Purchase Failure / Loss of Exclusivity
Under Section [X] of our Distribution Agreement, your exclusive distribution rights in [TERRITORY] are conditioned on annual purchases of at least $[MINIMUM AMOUNT]. For the period [DATE] through [DATE], your total purchases were $[ACTUAL AMOUNT], which is [PERCENTAGE]% below the contractual minimum. As a result, under Section [X], you have forfeited your exclusive distribution rights in [TERRITORY]. Effective [DATE], your distribution rights will convert to non-exclusive, and we reserve the right to appoint additional distributors in the territory or sell directly. If you wish to regain exclusivity for the next contract year, you must: 1. Place a make-up order of $[SHORTFALL AMOUNT] by [DATE] 2. Demonstrate a credible plan for meeting minimums going forward 3. Execute an amendment to the agreement clarifying the cure terms If you cannot or will not cure the shortfall, your non-exclusive rights will continue on the terms specified in Section [X].
Grey-Market / Unauthorized Channel Violation
You are in material breach of Section [X] of our Distribution Agreement, which restricts sales to [APPROVED CHANNELS] and prohibits sales through online marketplaces including Amazon, eBay, and similar platforms. On [DATE], we discovered an Amazon seller account [SELLER NAME] offering our products [PRODUCT NAMES] in violation of this restriction. Through investigative purchases and shipping records, we have confirmed that this seller account is operated by you or your agents (evidence attached as Exhibit B). These unauthorized marketplace sales: • Violate our selective distribution strategy • Undermine authorized retailers who invest in showrooms and customer service • Damage our brand through association with discount marketplace sellers • Create unauthorized product listings with incorrect specifications and images We demand that you: 1. Immediately cease all sales through Amazon, eBay, and other unauthorized channels 2. Close seller account [ACCOUNT NAME] and provide written confirmation within 5 business days 3. Provide a complete accounting of all unauthorized channel sales for the past [TIMEFRAME] 4. Pay liquidated damages of $[AMOUNT] as specified in our agreement Failure to comply will result in immediate termination and pursuit of all legal remedies including trademark infringement claims.
Distributor Demand Snippets
Distributor Opening – Exclusivity Breach by Manufacturer
This letter constitutes formal demand for damages arising from your breach of the exclusive distribution rights granted to me under our Distribution Agreement dated [DATE]. Under Section [X] of our agreement, you granted me exclusive distribution rights in [TERRITORY], with the express understanding that you would not directly sell or appoint competing distributors in this territory. You have materially breached this provision by [DESCRIBE BREACH: e.g., "directly selling to customers in my territory through your website and sales team" / "appointing [COMPETING DISTRIBUTOR] to sell in my exclusive territory"]. I have invested $[AMOUNT] in territory development—including [SPECIFY: inventory, marketing, sales staff, warehouse]—in reliance on exclusivity. Your breach has destroyed the value of this investment and caused me substantial damages.
Lost Profits Calculation from Exclusivity Breach
Your direct sales in my exclusive territory have caused me the following damages: DIRECT LOST SALES: • You directly sold $[AMOUNT] worth of products to customers in my territory during [TIMEFRAME] • My typical gross margin is [PERCENTAGE]% • Direct lost profit: $[AMOUNT] TERRITORY DILUTION: • My total territory sales declined by [PERCENTAGE]% after you began competing sales • Historical annual sales: $[AMOUNT] • Decline attributable to your breach: $[AMOUNT] • Lost profit at [MARGIN]% margin: $[AMOUNT] STRANDED INVENTORY: • I purchased $[AMOUNT] in inventory in anticipation of exclusive sales • Due to your competing sales, I cannot sell this inventory • I demand you buy back this inventory at my cost TOTAL DAMAGES: $[AMOUNT] I demand payment of these damages within 30 days, or I will pursue arbitration under Section [X] of our agreement.
Wrongful Termination Demand
On [DATE], you purported to terminate our Distribution Agreement effective [TERMINATION DATE]. This termination is wrongful and violates both our contract and applicable law. CONTRACTUAL VIOLATIONS: 1. Section [X] requires [90 days'] written notice. You provided only [30 days']. 2. Section [X] requires termination for cause with opportunity to cure. You provided no specific cause and no cure opportunity. 3. I have not breached any material term of the agreement. [DETAIL YOUR PERFORMANCE]. STATUTORY VIOLATIONS: Under [STATE] franchise relationship law [CITE STATUTE], termination requires good cause and [NOTICE PERIOD]. Your termination fails to meet these statutory requirements. DAMAGES: I am entitled to damages for wrongful termination including: • Lost future profits: $[AMOUNT] (2 years of expected profits based on historical performance) • Recovery of territory development investment: $[AMOUNT] • Stranded inventory: $[AMOUNT] • TOTAL: $[AMOUNT] I demand that you either: OPTION 1: Rescind the termination and reinstate our agreement on its original terms, OR OPTION 2: Pay $[AMOUNT] as buyout compensation for wrongful termination You must respond within 15 business days. If you refuse both options, I will pursue arbitration and all available remedies.
⚖️ How I Handle Distribution and Reseller Disputes

I represent both manufacturers enforcing distribution agreements and distributors protecting their territory and exclusivity rights. My approach focuses on practical channel strategy and enforceable contract provisions.

For Manufacturers (Enforcement)

Agreement Review and Enforcement Strategy: I analyze your distribution agreements to identify enforceable restrictions, drafting gaps, and optimal enforcement approaches for territory, MAP, and channel violations.

Evidence Development: I work with you to gather compelling evidence of violations—investigative purchases, brand monitoring data, territory sales analysis—sufficient to support termination or damages claims.

Demand Letter Drafting: I draft demands that cite specific contract provisions, document violations clearly, distinguish between curable and terminal breaches, and preserve all legal and equitable remedies.

Network-Wide Enforcement: I advise on consistent enforcement across distributor network to avoid selective enforcement claims and maintain distribution strategy integrity.

For Distributors (Protection and Recovery)

Exclusivity Rights Analysis: I evaluate your distribution agreement to determine strength of your exclusivity rights, limitations, and manufacturer's obligations to support your territory.

Damages Quantification: I help you calculate and prove lost profits from manufacturer's territory incursions, stranded inventory costs, and wasted territory development investments.

Wrongful Termination Defense: I analyze whether termination violates contract notice requirements, good-cause provisions, or state franchise relationship laws, and I demand reinstatement or buyout compensation.

Negotiation and Arbitration: I negotiate modified distribution terms, territory adjustments, or exit compensation, and I represent distributors in arbitration when manufacturer refuses reasonable resolution.

Fee Structures
📄
Demand letter: Flat fee $450
💼
Negotiation and Contract Modification Hourly billing for extended negotiation, territory restructuring, and amended distribution agreement drafting.
⚖️
Arbitration Representation Hourly billing for arbitration proceedings. For distributors with strong wrongful termination or exclusivity breach claims, I may consider hybrid fee arrangements.
Schedule a Distribution Dispute Strategy Call

If you're dealing with a distribution or reseller breach—whether you're a manufacturer enforcing agreement terms or a distributor protecting your territory rights—I can help you understand your position and develop an effective resolution strategy.

Use the Calendly link below to schedule a strategy call, or email me directly at owner@terms.law.

Schedule Strategy Call
Frequently Asked Questions

Minimum Advertised Price (MAP) policies are generally legal if structured properly. They must be unilateral policies (manufacturer's independent decision, not negotiated agreements) that restrict advertised prices only, not actual selling prices. Minimum Resale Price agreements that fix actual selling prices are per se illegal. To maintain legality, enforce MAP consistently across all distributors and don't negotiate MAP terms individually.

Depends on your contract and state law. If your agreement is truly "at will" with no notice requirements, manufacturer generally can terminate without cause in most states. However, many states have franchise relationship laws that require good cause for termination even if contract says "at will." Additionally, even at-will contracts may be limited by implied duration based on your investments, good-faith obligations, or retaliation prohibitions. Review your contract and consult counsel about state-specific protections.

You have several remedies: (1) terminate the exclusive distributor for breach of territory restrictions; (2) reduce their territory to non-exclusive status; (3) seek damages (if other distributor or direct sales were harmed); or (4) seek injunction to stop ongoing violations. Start with cease-and-desist demand letter giving opportunity to cure. If violations continue, territory restrictions are generally enforceable in commercial distribution agreements, giving you strong litigation position if needed.

If your distribution agreement grants you exclusive rights in a territory and doesn't carve out exception for manufacturer's direct online sales, you likely have breach claim for exclusivity violation. Calculate your damages as lost sales from manufacturer's direct competition. However, many modern distribution agreements explicitly reserve manufacturer's right to sell direct online. Review your contract's exclusivity language and online sales carve-outs carefully. Even if contract is ambiguous, you may have claim based on course of dealing if manufacturer previously abstained from direct sales.

Gather circumstantial evidence linking shell companies to distributor: (1) make test purchases and trace shipping origins and product serial numbers; (2) compare marketplace seller inventory to distributor's known purchase history; (3) analyze seller account registration details, payment information, and business addresses; (4) use product authentication or lot codes to trace supply chain; (5) hire investigators for more complex schemes. Accumulate enough circumstantial evidence to show shell company is distributor's alter ego. Courts allow termination based on reasonable belief of violations even without absolute proof.