Dealership Cancellation Letter for United Arab Emirates

Dealership Cancellation Letter Template for United Arab Emirates

This document serves as a formal notice of termination for a dealership agreement under UAE law, particularly governed by Federal Law No. 18 of 1981 (Commercial Agency Law) and its amendments. It outlines the termination of the commercial relationship between a principal/manufacturer and their authorized dealer in the UAE, including essential details such as effective date, grounds for termination, and post-termination obligations. The document must comply with UAE's strict commercial agency regulations, which provide significant protection to registered commercial agents and require specific procedures for termination.

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What is a Dealership Cancellation Letter?

The Dealership Cancellation Letter is a crucial document used when a principal/manufacturer wishes to formally terminate their commercial relationship with an authorized dealer in the UAE. This document must be carefully drafted to ensure compliance with UAE Federal Law No. 18 of 1981 (Commercial Agency Law) and its amendments, which provide substantial protection to registered commercial agents. The letter should clearly state the grounds for termination, reference the original agreement, specify the effective date, and outline post-termination obligations. It's particularly important in the UAE context as improper termination can lead to significant legal consequences and potential compensation claims. The document typically includes details about handling remaining inventory, outstanding payments, and intellectual property rights, and may require registration with or notification to the Ministry of Economy if the dealership is registered.

What sections should be included in a Dealership Cancellation Letter?

1. Letter Header: Company letterhead, date, reference number, and formal addressing of the dealer

2. Recipient Details: Full legal name and address of the dealer, including any registration numbers

3. Subject Line: Clear indication that this is a Dealership Agreement Termination Notice

4. Agreement Reference: Details of the original dealership agreement including date, registration numbers if applicable, and scope

5. Termination Notice: Clear statement of termination, citing relevant contractual and legal basis

6. Effective Date: Specific date when the termination becomes effective, ensuring compliance with notice periods

7. Immediate Actions Required: List of immediate actions the dealer must take, such as ceasing use of trademarks

8. Post-Termination Obligations: Overview of obligations that survive termination

9. Closing: Formal closing, signature block, and company details

What sections are optional to include in a Dealership Cancellation Letter?

1. Outstanding Payments: Include when there are pending financial settlements or payment obligations

2. Inventory Handling: Include when there is remaining inventory to be addressed or returned

3. Intellectual Property: Include when there are specific IP rights that need to be addressed

4. Confidentiality Reminder: Include when there are specific confidentiality obligations to reinforce

5. Dispute Resolution: Include when specific dispute resolution procedures need to be highlighted

6. Transition Period: Include when a transition period is being offered or required

What schedules should be included in a Dealership Cancellation Letter?

1. Copy of Original Dealership Agreement: Attached as reference to establish the basis of termination

2. Inventory List: If applicable, detailed list of remaining inventory to be addressed

3. Outstanding Accounts Statement: If applicable, statement of any outstanding financial matters

4. Handover Checklist: List of items, documents, and materials to be returned

5. Proof of Delivery: Courier or registered mail receipt to prove delivery of the notice

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Publisher

Genie AI

Document Type

Termination Letter

Cost

Free to use
Relevant Industries

Automotive

Electronics and Technology

Industrial Equipment

Consumer Goods

Medical Equipment

Construction Equipment

Fashion and Luxury Goods

Home Appliances

Machinery and Tools

Telecommunications

Relevant Teams

Legal

Commercial Operations

Sales

Compliance

Business Development

Distribution

Executive Leadership

Contract Administration

Relevant Roles

Chief Executive Officer

Managing Director

Commercial Director

Legal Counsel

Head of Sales

Business Development Manager

Contract Manager

Compliance Officer

General Manager

Regional Director

Channel Manager

Distribution Manager

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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