Dealer Termination Letter

Dealer Termination Letter Template for Hong Kong

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Key Requirements PROMPT example:

"I need a Dealer Termination Letter for our Hong Kong electronics distributor, providing 90 days' notice with the termination to take effect on March 31, 2025, including provisions for the return of demo equipment and handling of existing customer warranties."

Document background

The Dealer Termination Letter is a crucial document used when a company wishes to end its commercial relationship with an authorized dealer in Hong Kong. This document is essential in situations where a business needs to restructure its distribution network, address performance issues, or implement strategic changes in its market approach. The letter must comply with Hong Kong's legal framework, including common law principles and relevant ordinances governing commercial relationships. It typically includes specific details about the termination timeline, final settlements, handling of remaining inventory, and post-termination obligations. The document serves both legal and practical purposes, providing clear documentation of the termination decision while managing potential risks and ensuring a structured approach to ending the business relationship.

Suggested Sections

1. Recipient Details and Date: Full name, title, and address of the dealer, plus current date

2. Reference Line: Reference to the relevant dealer agreement and any other pertinent identifiers

3. Opening Statement: Clear statement referencing the dealer agreement and intention to terminate

4. Termination Details: Specific details about the termination including effective date and reference to relevant contract clauses

5. Notice Period: Clear statement of the notice period being given and how this complies with the agreement

6. Immediate Actions Required: List of immediate actions the dealer must take

7. Post-Termination Obligations: Summary of key post-termination obligations and restrictions

8. Return of Property: Requirements for returning company property, materials, and confidential information

9. Final Accounting: Information about final payments, commissions, or financial settlements

10. Closing Statement: Professional closing including contact details for queries and next steps

11. Signature Block: Company representative's name, title, and signature space

Optional Sections

1. Reason for Termination: Include when termination is for cause or when documentation of specific reasons is necessary

2. Transition Plan: Include when there's a need for coordinated handover of customers or territory

3. Legal Reservations: Include when there are potential disputes or need to reserve legal rights

4. Non-Compete Reminder: Include when the dealer agreement contains post-termination competition restrictions

5. Customer Communication: Include when there are specific requirements or restrictions regarding customer communications

6. Inventory Handling: Include when there is remaining inventory to be addressed

7. Outstanding Warranty Obligations: Include when there are ongoing warranty obligations that need to be addressed

Suggested Schedules

1. Schedule A - Outstanding Commissions: Detailed list of any outstanding commissions or payments due

2. Schedule B - Company Property Inventory: Itemized list of company property to be returned

3. Schedule C - Customer Accounts: List of customer accounts requiring transition or handling

4. Schedule D - Post-Termination Checklist: Detailed checklist of all actions required to complete the termination process

5. Appendix 1 - Relevant Agreement Clauses: Copy of relevant termination and post-termination clauses from the dealer agreement

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok��˰� | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

alex.den.21@genieai.co

Relevant legal definitions

Clauses

Relevant Industries

Automotive

Electronics

Consumer Goods

Industrial Equipment

Machinery

Technology

Telecommunications

Medical Devices

Construction Equipment

Agricultural Equipment

Fashion and Luxury Goods

Home Appliances

Sporting Goods

Software and IT

Relevant Teams

Legal

Sales

Commercial

Compliance

Business Development

Distribution

Operations

Channel Management

Contract Administration

Relevant Roles

Sales Director

Commercial Director

Business Development Manager

Channel Manager

Legal Counsel

Compliance Officer

Chief Commercial Officer

Distribution Manager

Regional Sales Manager

General Manager

Managing Director

Contract Manager

Dealer Network Manager

Operations Director

Chief Executive Officer

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Authors

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