Distribution Agreements in Tunisia

Tunisian distribution agreements are mainly governed by the Code de Commerce (Commercial Code), which sets general rules for commercial contracts, and by the Code des Obligations et des Contrats (COC), which provides the basic framework for contractual obligations, performance, and termination. Pursuant to Art. 2 of Law 2009-69, a “distribution business” refers to any professionally conducted activity involving the purchase of products for resale in their original state, whether on a wholesale or retail basis. Any activity carried out habitually and for profit that involves purchasing products for resale in their original state is subject to the provisions of Law 2009-69. A “wholesaler distributor” is defined as any merchant who, in the usual course of trade, purchases products or goods in bulk from local producers or through imports for the purpose of selling them wholesale. A “retailer distributor” is defined as any merchant who, in the usual course of trade, offers and sells to the public products or goods purchased from a wholesaler distributor, a producer, or via imports.

Law No. 36-2015 on Competition also applies to any exclusivity or non-compete clauses that could affect market access, and in regulated sectors (for example, pharmaceuticals), further licensing rules may come into play. If a relationship is actually an agency or franchise, different legal frameworks (including Law 2009-69 on franchising) might apply, so clarity on the relationship type is crucial.

A distributor buys and resells goods in its own name and bears the commercial risks (e.g., unsold inventory). An agent, by contrast, is authorized to represent the principal and usually does not purchase goods for its own account; agency agreements can carry statutory protections for agents, including notice and potential indemnities upon termination. Franchising involves using the franchisor’s brand and know-how under Law 2009-69, which mandates a written agreement and pre-contractual disclosure. Correctly classifying the arrangement matters because distributors do not enjoy the same mandatory termination compensation that agents often do.

There is no legal requirement to notarize or register a standard distribution agreement. It is, however, strongly recommended to have a written contract covering essential terms like pricing, territory, and termination. In certain regulated industries (for example, pharmaceuticals), the distributor must hold the appropriate license from the relevant ministry, but this involves the distributor’s business registration rather than the distribution contract itself. Parties typically verify the distributor’s commercial registration (Registre du Commerce) and confirm it is authorized to handle the specific products.

Pursuant to Art. 4 Law 2009-69, the distributor trader is required to notify the ministry responsible for trade of the start of its activity within a period of one month. It is required to inform it within the same period of any change relating to the activity. The notification must include the name of the promoter, the nature of the activity, the address of the premises, its surface area and the registration number in the trade register. For electronic distribution trading, notification is made by submitting a copy of the hosting contract for the commercial site within one month of the date of conclusion. Any changes made to the website must be notified within the same period.

It is advisable to confirm the distributor’s corporate status and financial stability through the Tunisian Registre du Commerce and by reviewing available financial statements or references. Checking for past legal disputes, ensuring operational capabilities (like warehousing and transport), and confirming compliance with any relevant sector approvals are essential steps. A thorough evaluation of the distributor’s reputation in the market and its existing portfolio of products can help anticipate potential conflicts of interest or synergies.

Because there is no stand-alone distribution law, it is crucial to define the parties’ obligations clearly in writing. Standard clauses cover scope of products, territory (exclusive or non-exclusive), pricing methods (the supplier’s price lists or discount structures), payment terms (currency, deadlines, potential credit limits), and duration. The contract should specify performance benchmarks if sales targets are important, outline termination grounds (breach, failure to meet targets, insolvency, force majeure) and include a notice period. Clauses addressing intellectual property usage, confidentiality, and compliance with Tunisian competition law (especially prohibitions on resale price maintenance and overly broad non-compete clauses) should also be included.

Exclusivity is permitted under Law No. 36-2015 as long as it does not create a de facto monopoly or significantly block market entry for competitors. Article 5 lists the types of agreements or practices prohibited by law—those whose object or effect is to hamper competition (e.g., fixing prices, partitioning markets). An exclusive distribution agreement can be permissible so long as it does not result in or aim at creating a monopoly-like situation, foreclosing competitors, or fixing resale prices. Article 6 allows a possibility for certain agreements to be exempted (with or without conditions) if they confer “technical or economic progress” and if the benefit to consumers outweighs the restriction on competition. While exclusivity is not automatically subject to this exemption procedure, it indicates that only restrictive effects that harm the market are targeted, not exclusivity per se.

Exclusivity is common in Tunisia, but if the supplier or distributor holds a dominant position, the Tunisian Competition Council can investigate whether the arrangement unfairly restricts competition. Non-compete clauses are generally acceptable during the contract term if they are limited to the relevant products. Post-termination non-competes should be carefully confined (usually to six to twelve months) and narrowly scoped geographically and by product category.

Tunisian law does not grant distributors a statutory goodwill or termination indemnity. This contrasts with agency agreements, where local courts may award compensation. Distribution relationships rely on the contract itself for any termination provisions. Courts can, however, award damages if a termination is conducted in bad faith or is deemed abusive (for instance, if there was no reasonable notice for a long-established arrangement).

Tunisian law does not fix a statutory notice period for terminating or non-renewing a distribution contract. Reasonable notice—commonly 30 to 90 days—is expected, especially for indefinite arrangements or when the distributor has made significant investments. Stating the notice period in the contract helps prevent disputes over abrupt termination.

There is no mandatory obligation for the supplier to repurchase the distributor’s remaining stock. The contract should specify whether a buy-back is offered or if the distributor can continue selling leftover inventory for a defined period. Without a contractual provision, the distributor bears the risk of unsold stock, though parties occasionally negotiate buy-backs to ensure an amicable wind-down.

Parties to an international distribution agreement can choose a foreign governing law, but Tunisian courts will still apply Tunisian mandatory rules (competition law, public policy principles) if a dispute arises locally. Arbitration clauses are widely accepted because Tunisia is a signatory to the New York Convention, simplifying enforcement of foreign arbitral awards. If a foreign judgment is obtained instead, exequatur proceedings are required in Tunisian courts to ensure the judgment does not conflict with public policy and that there is reciprocity.