A gas company that terminated the agreement with a gas distributor without prior notice due to repeated breaches and inappropriate behavior towards customers, demanded compensation for the damage to company reputation due to the actions of the distributor.
The Court held that the termination of the agreement was duly made and that the distributor's actions damaged the company's reputation. When it comes to damage to reputation, it is not always necessary to prove that the company has a highly positive reputation. Even if the company has a positive reputation to one degree or another or a negative reputation to one degree or another, it is enough that the reputation has been damaged, and even if it was poor to begin with, it has decreased further, to indicate damage to the reputation. In addition, damage to reputation does not necessarily have to be expressed in decreased revenues, and compensation for damage to reputation can be determined through estimation. Here, even if there were irregularities in the activities of the gas company before the breaches by the gas distributor, there is no doubt that the breaches caused by him have the potential to damage, or lower further, the company's reputation, and even if it is not possible to point to damage to revenues, there is no doubt that the public was given a negative impression of the gas company due to the breaches of the distributor, in a manner that justifies the company's compensation.