The Cancellation of Dealership Letter is a critical document used in the United Arab Emirates business environment when a principal/manufacturer wishes to formally terminate their relationship with an authorized dealer. This document must be carefully drafted to ensure compliance with the UAE Commercial Agency Law, which provides significant protections for registered commercial agents. The letter should be used when termination is necessary due to breach of agreement, mutual consent, or other valid grounds recognized under UAE law. It typically includes details about the original dealership agreement, grounds for termination, effective date, transition arrangements, and post-termination obligations. Given the UAE's protective stance towards local commercial agents, this document often requires careful legal review to ensure it meets all regulatory requirements and minimizes potential legal disputes.
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1. Letter Header: Company letterhead, date, reference number, and formal addressing of the dealer
2. Recipient Details: Full legal name and address of the dealership/dealer
3. Reference to Dealership Agreement: Clear identification of the original dealership agreement including date and reference numbers
4. Termination Statement: Clear and unambiguous statement of intention to terminate the dealership agreement
5. Legal Basis: Reference to relevant termination clause in original agreement and/or applicable UAE Commercial Agency Law provisions
6. Effective Date: Specific date when the termination becomes effective, considering notice period requirements
7. Immediate Actions Required: List of immediate actions dealer must take (cease using trademarks, return inventory, etc.)
8. Closing: Professional closing statement, signature block, and company details
1. Outstanding Payments: Include when there are pending financial settlements or payment obligations to be addressed
2. Transition Period Terms: Include when offering or requiring a transition period for smooth business handover
3. Dispute Resolution Reference: Include when there's history of disputes or likelihood of legal challenges
4. Ongoing Obligations: Include when certain obligations survive termination (confidentiality, warranties, etc.)
5. Inventory Handling: Include when specific arrangements are needed for remaining stock or inventory
6. Customer Transfer: Include when arrangements are needed for handling existing customers
7. Non-Compete Reminder: Include when the original agreement contains post-termination non-compete provisions
1. Schedule of Outstanding Matters: List of pending transactions, orders, or obligations requiring resolution
2. Inventory List: Detailed list of current inventory to be returned or purchased
3. Financial Statement: Summary of outstanding financial obligations or settlements
4. Transition Timeline: Detailed timeline for completing all termination-related actions
Relevant legal definitions
Clauses
Relevant Industries
Automotive
Electronics and Consumer Goods
Industrial Equipment
Medical Devices
Construction Equipment
Luxury Goods
Fashion and Apparel
Home Appliances
Technology and Software
Machinery and Tools
Pharmaceuticals
Telecommunications Equipment
Relevant Teams
Legal
Commercial
Sales
Compliance
Business Development
Operations
Corporate Affairs
Distribution
Channel Management
Risk Management
Relevant Roles
Chief Executive Officer
Managing Director
Commercial Director
Sales Director
Legal Counsel
Compliance Officer
Business Development Manager
Channel Manager
Distribution Manager
Regional Manager
Country Manager
Contract Manager
Corporate Secretary
Legal Affairs Manager
Operations Director
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