VBER DEEP DIVE - Non-compete obligations

🚀 How to prevent your buyers from doing business similar to yours? 🚀

The regime on non-compete obligations under the current VBER is as follows:

✨ As before, the definition of non-compete obligations covers two types of obligations: single branding and an obligation or incentive scheme which causes the buyer to purchase more than 80 % of its requirements on a particular market from only one supplier.

✨ Are not covered by the VBER, non-compete obligations that are of indefinite duration or exceed 5 years, unless the contract products are resold by the buyer from premises and land owned by the supplier or leased by the supplier from third parties not connected with the buyer.
 
✨ Are covered by the VBER, non-compete obligations that have a duration of less than 5 years or are tacitly renewable beyond a period of 5 years, provided that the buyer can effectively switch to a competing supplier after the expiry of a 5-year period (meaning that the buyer must have the opportunity to terminate the agreement within a reasonable time and at a reasonable cost).

✨ If the competition concern is that the buyer must be able to effectively switch after a 5-year period, then the distinction made by the VBER is quite formalistic. Effective switching can be foreseen in respect of any non-compete obligation, including those of more than 5 years or indefinite duration.

✨ Post-term non-compete obligations are covered by the VBER under the same strict and cumulative conditions as under the previous VBER, meaning a.o. that they must be limited to the premises where the buyer operated and to a period of 1 year after the termination. In combination with the fact that they must be indispensable to protect know-how transferred from the supplier to the buyer, they apply in the first place to franchising.

Interested in really deep-diving into the new VBER?

✨Join our interactive workshop (29 September – Dutch) https://lnkd.in/e-r_c9BU 

✨Read the Distribution Law Center’s wrap-up countdown https://lnkd.in/eCyihxsg
 
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