Distribution Agreements in Morocco

In Morocco, there is no dedicated statute that exclusively regulates distribution agreements. Instead, these relationships are primarily governed by the general rules of contract law contained in the Moroccan Dahir (Decree) forming the Code of Obligations and Contracts and by relevant provisions of the Commercial Code. Because no specific legislation exists for distributors (unlike commercial agents, who do benefit from certain protective rules), parties enjoy considerable contractual freedom to set their own terms, provided they do not conflict with mandatory Moroccan law or public policy.

Legally, no specific requirement mandates that commercial contracts be in one of the Moroccan official languages (Arabic and Tamazight) or French as a commonly used language in business. Moroccan law accepts contracts in foreign languages, provided the parties understand the terms. For evidentiary or litigation purposes, an Arabic sworn translation might be required in Moroccan courts if a dispute arises.

In general, no statutory or regulatory requirement compels parties to register or file a purely commercial distribution agreement with a government authority. However, if the agreement includes intellectual property licenses (e.g., trademarks, patents) or if it involves activities that require government authorization (for instance, importing regulated goods), the relevant registrations may be necessary. Additionally, some parties voluntarily register contracts for evidentiary purposes or to comply with internal corporate policies, but this is not mandated by law.

Generally, no. Foreign companies can freely appoint Moroccan distributors or enter into distribution agreements without having to form a local joint venture or local subsidiary, subject to compliance with foreign exchange regulations administered by the Moroccan Office des Changes. In heavily regulated sectors (e.g., pharmaceuticals, defense), there may be specific licensing conditions, but these are exceptions rather than the rule.

Yes, parties are free to agree on exclusivity in a distribution agreement. Moroccan law does not prohibit exclusive distribution per se. However, Law No. 104-12 on Freedom of Prices and Competition may apply if exclusivity clauses have the effect of significantly restricting competition in the relevant market. In practice, standard exclusivity clauses for moderate market shares are common and typically do not trigger competition-law violations.

Because distribution agreements are not specially regulated, termination is governed by the contract’s terms and by general contract principles. Parties typically include provisions regarding:

1. Term (fixed or indefinite).
2. Notice periods for termination (especially for indefinite-term agreements).
3. Grounds for early termination (breach, insolvency, etc.).

In Morocco, there is no statutory minimum notice period for distributors. However, under general principles of good faith and fair dealing, an abrupt termination without adequate notice might be challenged in court, especially if the distributor has invested heavily based on a long-standing relationship.

Unlike commercial agents — who, under certain circumstances, can claim statutory indemnities — distributors do not enjoy statutory indemnity rights under Moroccan law. Whether a distributor can claim compensation for termination depends on the contract terms or a court’s assessment of wrongdoing (e.g., abrupt or abusive termination). If the relationship is recharacterized as an agency relationship by a Moroccan court, then the agent-protection rules might apply. This recharacterization is rare but possible if the distributor is, in practice, acting as a dependent agent.

Goodwill indemnity does not legally apply to distribution agreements. However, the parties may freely decide on the provisions of such indemnity in the distribution agreement. In this case, parties should ensure that the agreement provides for the relevant terms and conditions applicable to the goodwill indemnity, in particular, the calculation modalities that would apply. 

Usually governed by the contract. Many suppliers agree to repurchase usable, resalable stock at a pre-agreed price or discount. Local law does not impose a universal buy-back requirement, so clarity in contract drafting is key.

Post-termination non-compete clauses can be enforced if they are reasonable in duration, territory, and scope. Usually, 6–12 months is a common range, but it depends on the nature of the products and the market. Overly broad restrictions are vulnerable to legal challenge.

There is no automatic legal protection for “client ownership” in standard distribution. If a distributor can prove the principal is unjustly enriched by taking over customer relationships, it might claim damages, but this is rare and depends heavily on contractual terms.

Yes, Moroccan law generally respects freedom of contract, including the choice of a foreign governing law and the selection of a foreign court or arbitration tribunal. Nevertheless, Moroccan courts may retain jurisdiction or apply Moroccan mandatory laws if:

1. The dispute relates to public policy matters (e.g., consumer protection, competition law).
2. The performance predominantly occurs in Morocco.
3. The case involves immovable property in Morocco or other matters subject to exclusive Moroccan jurisdiction.

Arbitration clauses — especially international arbitration — are widely used and recognized, provided they satisfy formal requirements under Moroccan arbitration law (Law 95-17).

Morocco maintains certain foreign exchange regulations through the Office des Changes. While these do not generally prohibit legitimate commercial payments to foreign entities, they do require compliance with documentation and reporting requirements. Distributors making payments abroad must ensure they have proper invoices, make bank transfers, and use an authorized Moroccan bank. In most standard transactions, payments in foreign currency to the foreign principal are allowed once paperwork is in order.

Yes. Certain industries in Morocco — such as pharmaceuticals, telecommunications equipment, defense articles, or food and beverages — are subject to industry-specific regulations (e.g., licensing, import controls, health inspections). If the products fall under these regulated sectors, the distribution agreement should incorporate all necessary compliance obligations (e.g., certifications, approvals).

Written Agreement: Always use a written distribution contract specifying scope, territory, exclusivity (if any), term, termination, dispute resolution, and governing law.

Notice Provisions: Incorporate reasonable notice periods to minimize legal disputes over abrupt termination.

Competition Compliance: Review exclusivity and market-share clauses for compliance with Moroccan antitrust rules.

Choice of Law and Jurisdiction: Select these carefully. If choosing foreign law or arbitration, ensure it does not conflict with mandatory Moroccan provisions.

Regulated Goods: Identify whether the distributed products require any special licenses or governmental approvals.

Foreign Exchange: Comply with the Office des Changes for international payments.