Distribution agreements constitute “framework agreements”, which govern the distribution relationship between a supplier and a distributor. Unlike commercial agents, distributors buy products from a supplier – who may be the manufacturer, but also a wholesaler – in their own name and for their own account. Distributors then resell such goods and services (hereinafter referred as “products”) to customers located in a specified territory, whereby such customers may be retailers, but also end customers (for example consumers or undertakings using the products in their own businesses).
Distribution agreements may exist in a wide range of variations and bear different titles. For example, they may be limited to the buying and reselling of products to specific customer groups. However, distribution agreements may also impose numerous obligations on distributors and lead to a strong integration of distributors into the supplier’s distribution organisation (for example in case of selective distribution agreements), in which case distributors may find themselves in a similar position as commercial agents or franchisees.
Distribution agreements can be divided in subcategories. In selective distribution agreements, a supplier undertakes to sell products only to authorised distributors selected on the basis of specified criteria, whereby these authorized distributors are obliged not to resell the products to unauthorised distributors. In other words, selective distribution agreements result in a “closed” group of distributors, selected on the basis of specified criteria, whereby leaks to unauthorized distributors shall be avoided. Selective distribution agreements often pertain to luxury products. In sole or exclusive distribution agreements, suppliers assign different territories or customer groups to different distributors, which are exclusively responsible for the assigned territories or customer groups (within the borders of competition law; see question 3) – often even to the exclusion of the supplier.
Distribution agreements are not specifically governed by Swiss statutory law. They are so-called “innominate contracts”. Therefore, the general rules of Swiss contract law, namely the Swiss Code of Obligations (“CO”), apply.
In addition, some provisions governing other types of contracts may apply by analogy. For instance, some of the provisions in Article 418a et seqq. CO regarding commercial agency agreement may apply by analogy to distribution agreements, for example with regard to goodwill indemnities (Article 418u CO; see question 6).
With regard to the contracts of sale concluded between the supplier and the distributor under the umbrella of a distribution agreement, Articles 184 et seqq. CO regarding contracts of sale apply. In case of international sales of goods, the United Nations Convention on Contracts for the International Sale of Goods (“CISG”) may apply.
In addition to the rules contained in the CO and CISG, the Swiss Cartel Act, Swiss Unfair Competition Act, and further laws also govern rights and obligations of the parties to a distribution agreement.
With regard to the application of the Swiss Cartel Act, it is helpful to refer to the Notice on Vertical Restraints and the Explanatory Guidelines of the Swiss Competition Commission . The Notice and the Explanatory Guidelines are strongly inspired by the European Regulation 330/2010 on the application of Article 101(3) TFEU to categories of vertical agreements and concerted practices and the Guidelines on Vertical Restraints (2010/C 130/01) of the European Commission. In principle, European competition law rules apply in Switzerland almost as if they were Swiss; what is prohibited in the EU is most likely also prohibited in Switzerland, and what is permissible under EU competition law should also not raise any concerns in Switzerland.