Hsu Ming-yin's claim for damages arising from stoppage of supply of goods due to termination of agreement
Chinese Taipei
Case:
Hsu Ming-yin's claim for damages arising from stoppage of supply of goods due to termination of agreement
Key words:
distributorship agreement, commission, termination of agreement
Reference:
Supreme Court Judgment (87) T'ai Shang No.343
Industry:
Motorcycle Retailing Industry (5462)
Relevant Laws:
Articles 19(vi), 31, and 32(1) of the Fair Trade Law; Article 24 of the Enforcement Rules of the Fair Trade Law Law; Articles 226(2) and 260 of the Civil Code
Summary:
Appellant Hsu Ming-yin (i.e., Ming Yin Motorcycle Shop) claimed:
He and Han Yang Motorcycle Co., Ltd., the appellee, made a distributorship agreement [the Agreement] for the distribution of the San Yang motorcycles. The term of the Agreement was from 1 January 1993 through 31 December 1993. Upon expiration of the term, both parties agreed to renew the Agreement for one year. Before the renewal expired, on 1 November 1994 the appellee rescinded the Agreement due to [appellant's] violation of the Agreement's stipulations and stopped supplying goods to the appellant. However, Article 17 of the Agreement restricting the appellant from displaying other brand motorcycles or signboards, selling other brand motorcycles, or depicting literature that could impact the appellee's reputation, was found to be in violation of Article 19(vi) of the Fair Trade Law (hereinafter referred to as the Law) and was invalid. The appellee restricted the appellant's business activities without justifiable cause and stopped the supply of goods for two months. Such acts violated Article 1 of the Agreement and Article 19(vi) of the Law. The appellant claimed damages on the basis of Articles 31, 32(1) of the Law and Articles 226(2) and 260 of the Civil Code. Based on a monthly commission of NT$207,625, the appellant's claim for NT$1,245,750 and accrued interest was three times the remaining two months' payable commission of NT$415,250.
Whether an enterprise is in violation of the above provisions shall be determined by the requirement that its act is "likely to impede fair competition" as provided in Article 24 of the Enforcement Rules of the Fair Trade Law. The High Court Judgment thus stated that persons entitled to claim damages against a violation of the Law would be competitive enterprises and ordinary consumers. The persons whose rights and interests would be injured by the Agreement between the parties of this case would be San Yang's competitors (such as the producers of Yamaha, Kymco and Suzuki motorcycles) or ordinary consumers, rather than the appellant. The appellant willingly entered into the Agreement with the appellee, and according to appellant's claim, he was able to earn a monthly commission as high as NT$207,625. Therefore, this portion of the judgment against the appellant does not run counter to the law.
Regarding the appellant's claim for a commission loss of NT$415,250 and accrued interest due to appellee stopping the supply of goods:
According to the appellant's complaint, the appellee was to supply goods through 31 December 1994 in accordance with the stipulations of the Agreement. From 1 November 1994 on, the appellee refused to supply. Under Articles 226(2) and 260 of the Civil Code, the appellant's intent to rescind the agreement was conveyed once the copy of its complaint was served. Therefore, the appellant could claim a monthly commission loss of NT$207,625, a total of NT$415,250 for the period from 1 November 1994 through 31 December 1994. Such claim was significant, and the reasoning of the High Court Judgment against the appellant failed to address this claim. The appeal that challenged this portion of the judgment and requested a dismissal was not groundless.
Summarized by Ch'en, Chun-t'ing
Supervised by Leu, Yu-ch'in
Appendix:
Han Yang Motorcycle Co., Ltd. Uniform Invoice No.: 23969136