A Tale of Two Distributors

Ehring Enterprises and RD Management were both distributors of a French manufacturer’s skin-care products. Ehring’s exclusive distribution territory was the eastern U.S., while RD distributed product exclusively in the western U.S. After both distributors’ contracts had expired, RD sued Ehring for breach of contract due to sales it had made in RD’s territory. The trial court accepted RD’s argument that it was a third-party beneficiary of the agreement between Ehring and the French manufacturer. The Court of Appeals affirmed that ruling, noting that the sales RD complained of had begun while Ehring was still contractually obligated to stay out of RD’s sales territory.

Ehring Enters., Inc. v. RD Mgmt. Corp., No. 05-13-00711-CV