30-second answer
Many disputes erupt at exit rather than during the relationship. A termination email is easy; resolving inventory, customers, trademarks, domains, warranties, deposits, receivables and in-transit orders is not.
Applied situation (illustrative)
Consider a Australian distribution scenario: One side announces an immediate exit while orders, inventory and customer support remain active. The notice clause, any cure period and the treatment of open orders may matter more than the headline termination date.
Classify the problem before calling everything “breach”
What the brand should focus on
Brands should confirm the legal/contractual basis, notice period and cure requirements before termination, while preparing channel replacement and customer communications to avoid a service vacuum.
What the distributor/agent should focus on
Distributors should lock down inventory, customer attribution, accrued commissions, deposits, marketing costs and warranty responsibilities before access is cut or records disappear.
Clauses and records to check
- Notice method
- Cure period
- Open orders
- Stock and customer transition
- Surviving obligations
Test the notice, cure and handover terms against open orders and support obligations before ending performance. For an Australian transaction, identify the contracting party and location of performance. If the model operates as a franchise, check current applicable requirements before changing fees or exit terms.
Additional point for Australia
Check the Australian contracting entity, the actual course of dealing and the market in which obligations were performed. If the relationship is a franchise, review the current Franchising Code before assessing fees, exit rights or financial commitments.
Financial exposure and response options
Price the exit by open orders, unsold stock, customer support and any proved investment tied to the remaining term.
Settlement terms worth writing down
For this Australian arrangement, write down how notice method, open orders and surviving obligations will be handled. Set dates and responsibilities for payment or handover, and state what happens if an agreed step is missed.