Legal Updates

An exclusivity agreement requiring a duel station to purchase only from one supplier is a restrictive trade arrangement and the agreement is terminated

October 31, 2016

An owner of a fueling station claimed the termination of an agreement dated 1973 with a fuel supplier under which against financing of the construction of the station the station must purchase fuel products exclusively from the fuel supplier for 49 years in a manner that enables the fuel supplier to arbitrarily set the price by which it sells to the station.

The Court held that a restrictive trade arrangement is an arrangement between two businesses under which one at least restricts itself in a manner that may prevent or limit competition.  The fact that the supplier may set the price of sale of fuel products to the station is not a restrictive trade arrangement because the supplier does not set the price to the customers of the station.  However, the exclusivity provision requiring the station to purchase and sale in the station only fuels and products of the supplier due to the restriction on the freedom of action of the station is a limitation on competition.  Because it is a restrictive trade arrangement and the agreement may not be separated to parts, the whole agreement is terminated.