Sunday, July 5, 2009
Distribution and Agency Agreements in Latin America: a comparative law analysis
Comparative law can be persuasive authority when necessary to interpret Puerto Rico’s dealer relationship statutes. In fact, Puerto Rico Law 75 was influenced by laws then existing in the Dominican Republic and certain common law jurisdictions. For a comparative law analysis of relationship statutes in certain Latin American countries, namely, Chile, Colombia, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua and Panama, see Hernan Pacheco, “A Comparative Study of Distribution and Agency…in Selected Latin American Jurisdictions”, ALI-ABA, March 18-20, 2009 (available in Westlaw) . Some of these countries have special laws similar to Law 75. In others, civil and commercial laws govern agency and distributor relationships without special legislation. There are many differences and similarities with Puerto Rico’s relationship statutes. Some jurisdictions require and define just cause for termination and have formulas for indemnification. In some of these countries, a distributor’s unauthorized disclosure of confidential information is statutory just cause. In Honduras, an unjustified termination allows recovery of five times the annual gross profit. In Colombia, the dealer’s compensation depends on the “efforts” of the agent to support the brand or service, and, for example, the dealer may receive 1/12th of the average of the commission, royalty, or profit obtained during the last three years for each year that the contract was in effect.