The common feature of distribution agreements is that distributors purchase products from their suppliers on a lasting basis and re-sell them in their own name and at their own risk to customers. Distributors are often obliged to carry out marketing and promotion activities and to comply with minimum purchase or sales quantities. When it comes to the details, however, distribution agreements can differ in countless aspects. For example, suppliers may or may not grant exclusivity rights to distributors, lawfully prohibit sales by distributors to non-authorized resellers or compete with their own distributors for certain customer groups or in certain distribution channels (online sales etc.).
In most jurisdictions, distribution agreement are not specifically governed by statutory provisions, although certain provisions addressing other kinds of agreements, for example the entitlement to a goodwill indemnity under agency laws, may apply to distribution agreements by analogy. Due to the lack of specific statutory provisions and often long-term commitments undertaken in distribution agreements, carefully drafted agreements are of utmost importance for suppliers and distributors. Even though it might be unpopular to discuss about the end of a promising future distribution partnership already when an agreement is negotiated, it is crucial that the distribution agreements also contain appropriate provisions governing the consequences of a termination. After all, the termination of distribution agreements is a frequent source of disputes.
In this Guide, experienced distribution law experts from different countries provide practical advice to (future) parties to distribution agreements.