Tire Industry Experts Discuss Alleged Breach of Exclusive Distribution Agreement

    Commercial Expert WitnessThis case involve a dispute between a domestic tire distributor in Minnesota and its Canadian competitor. The two parties had an exclusive distributorship agreement whereby the domestic company distributed a particular brand of tire for the Canadian company. It was alleged that the Canadian company breached the exclusive distributorship. As a result, both companies have filed a lawsuit and countersuit against one another.

    Question(s) For Expert Witness

    • 1. Please describe your experience in the tire distribution industry.
    • 2. How prevalent are exclusive distributorship agreements in this market?
    • 3. What restrictions do these agreements typically feature?

    Expert Witness Response E-083053

    I have over 40 years of experience in the automotive industry, including 11 years in senior executive roles with a major tire manufacturer. From 2003 until 2012, I was the SVP of Purchasing for that company. I am very familiar with exclusive distributorship agreements and the problems they cause when businesses don’t abide by them. I have dealt with these disputes in my prior roles – I can recall situations where we would enter an agreement with a distributor who then sold the rights to another distributor, for example. I am knowledgeable of the reasons why a firm would enter an exclusive agreement and the possible pitfalls that come from such relationships. I am also absolutely familiar with the economics, including payment terms, discounts, volume rebates, and signing bonuses. There are also accounting rules that have to be followed when tracking these deals.

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