The Dutch Supreme Court has slightly amended the liability
regime for franchisors in cases of incorrect forecasts. Until this
judgement, a franchisor could be liable when providing the
franchisee with an incorrect forecast, but only in certain
circumstances. Those circumstances included knowledge of the errors
and subsequent failure to notify the franchisee. This was based on
case law where the forecast had been provided by a third party. The
position was that a franchisor was entitled to have legitimate
confidence in a forecast provided by a third party. To successfully
sue the franchisor for tort, the claimant had to prove that the
franchisor was aware of the errors.
However, in its recent judgment the Supreme Court made a
distinction between forecasts provided by a third party and
forecasts provided by the franchisor himself. If the franchisor has
prepared the forecasts, he may be liable for errors if they are
caused by negligence. No actual knowledge of the errors is required
for the franchisor's liability. Franchisors should therefore be
aware that their liability threshold has been somewhat lowered.
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