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Cisco to pay $6 million to US partner for breaching contract
In a recent landmark judgement, a US court found Cisco guilty of breaching its reseller agreement and deal registration program and asked the company to pay $6 million in damages to the aggrieved partner, Infra-Comm.
The US edition of CRN, which has been closely following the case, reports that Infra-Comm had alleged that Cisco breached its Indirect Channel Partner Agreement (ICPA) and the terms of its deal registration program. Cisco, in return, had accused Infra-Comm of harming Cisco's business and misusing its brand name.
However, the court ruled that parts of Cisco's reseller agreement are unconscionable—a term used for legal contracts to refer to a contract or parts of a contract which are unfair to one party in the contract. For instance, it could refer to one party taking advantage of its bargaining position over another party.
Many believe that the favorable verdict for the solution provider may see more such libels against vendors.
When one of the Indian solution provider was asked to comment on the case, he said, “Most partner agreements are unconscionable as they are one-sided. For instance, most partner agreements have a clause that gives vendors the right to terminate the contract unilaterally without providing a cause.”
So will Indian solution providers take a cue from their US peers to challenge vendor contracts?
Stricter gag from Dell
It seems Dell is upset with the way CRN has exposed the pricing disparity that exists between its products available online and through channels.
As a result, the PC-maker recently sent out a strongly worded e-mail to all its distributors warning them against speaking to the press (read CRN). The e-mail, in fact, threatens partners that any discussion of the vendor’s channel policies without its approval, could result in the termination of their partnership.
According to sources, the email had indirect reference to a couple of stories carried by CRN over the past months. No Dell distributor was willing to speak to us ‘on-record’ regarding the e-mail. |