Devoted to Corporate Attorneys, Corporate Lawyers, and Corporate Counsel

The following is not meant to be legal advice.

Sometimes a company may want flexibility in getting out of a relationship with a termination at will clause.  However, this may be overbearing to a distributor or partner who has invested amounts of resources to begin a market.  When an agreement terminates, a company usually likes to take over the contracts from the partner and support the customers directly.  The company wants the customers to pay it directly in case the partner does not pay.  The customers may be transitioned to other distributors or partners.  In order to ensure that a company gets the customers directly, an agreement may have a security interest clause in the distributor’s customers.

To prevent other distributors from soliciting customers if they demonstrate command of an account, a company reviews reports and summaries and decides whether there will be a channel conflict.  These reports may be known as customer information worksheets.  The worksheets detail the customer, who gets billed for the product, the type of arrangement.