For example, Maryland`s Beer Franchise Act does not explicitly define “brand,” but the law appears to favor the distributor in terms of brand size. In particular, Section 105 of Maryland`s Beer Franchise Fair Dealing Act prohibits a brewery from entering into a beer franchise agreement with more than one reseller for “its brand or brand of beer” in a given area. It could be argued that the language “or trademarks” means that the first distributor has the right to all the manufacturer`s trademarks in a given field. After about 18 months, it was clear that the relationship had deteriorated and a new distributor had to be chosen. As any business owner knows, the real test of any deal is what happens when the parties separate. The agreement did not specify which products will be returned for credit or what the timing of those returns was. The already tense situation has been aggravated by the divergent expectations of the two sides regarding the issues of the transition period. In October 2018, Loveland entered into an Asset Purchase Agreement (APA) to sell all of its assets to premium distributors in Virginia. Loveland asked Bell to agree to the transfer of its distribution rights to Premium, but refused to ask Bell to provide the APA schedules to Bell`s so that Bell`s could evaluate the transaction. Bell`s refused to authorize the transfer and filed a notice of intent to denounce Loveland for improper breach of an essential provision of the parties` agreement. In most countries, supplier/distribution relationships are subject to franchise laws. In the absence of franchise laws, the relationship is entirely defined by a distribution agreement between the parties. But even in franchised countries, the distribution contract can play a decisive role, particularly in the termination of the distribution relationship.
In particular, the VABC body objected to the application of U.S. Supreme Court precedents and found that the Federal Arbitration Act (FAA) anticipated state law, which provides for an administrative tribunal in cases where the parties have a written agreement to arbitrate their dispute. The body asserted that the Twenty-first Constitutional Amendment gives states sweeping liquor control powers, leading to a “strong presumption of validity” for public alcohol regulatory systems, including Virginia`s exercise of its “power to monitor compliance” with the “system undoubtedly in effect in three stages.” However, the panel rejected the argument that the FAA and its procedures replace Virginia`s liquor laws and procedures, given the “strong presumption of validity” they enjoy under the Twenty-first Amendment to the Constitution.