{"id":555,"date":"2016-05-24T12:00:43","date_gmt":"2016-05-24T10:00:43","guid":{"rendered":"http:\/\/192.168.5.98:8888\/legalmondo\/?p=555"},"modified":"2020-01-05T21:27:38","modified_gmt":"2020-01-05T20:27:38","slug":"distribution-agreements-germany","status":"publish","type":"post","link":"https:\/\/www.legalmondo.com\/ru\/2016\/05\/distribution-agreements-germany\/","title":{"rendered":"Germany &#8212; Distribution agreements"},"content":{"rendered":"<p><strong>Agency (regulations, duration, termination, indemnities \u2013 if any)<\/strong><\/p>\n<p>Instead of <strong>direct distribution<\/strong> (by setting up a branch, a subsidiary or via e-commerce), one can also distribute ones\u2019 products and \/ or services <strong>indirectly<\/strong>. Indirect distribution especially includes agents, distributors, franchisees or commission agents.<\/p>\n<p><strong>Self-employed<\/strong> <strong>commercial agents <\/strong>solicit customers and can (but do not have to) have the authority to conclude a contract on supplier\u2019s behalf. The supplier sells directly to end customers and bears the distribution risk, but may also control the margins. Contrary to employees, the agent\u2019s remuneration (\u201c<em>commission<\/em>\u201d) can be exclusively profit-oriented, i.e. remunerated only in case of successfully soliciting customers, and in relation to the turnover. Commercial agents have to provide detailed market reports. If the commercial agent acts in the EU, protective agency law applies, including the indemnity claim.<\/p>\n<p>An agent would be treated as a supplier\u2019s employee if the agent does not <strong>act<\/strong> <strong>independently<\/strong>. An agent acts independently if the agent \u2013 according to the overall picture of contractual rules and factual activity \u2013 freely organizes his activities and working time (<a href=\"http:\/\/www.gesetze-im-internet.de\/hgb\/\" target=\"_blank\" rel=\"noopener\">sec.\u00a084 (1)\u00a02\u00a0HGB<\/a>). This goes mutatis mutandis for other types of distribution partners. The treatment as employee especially has the following <strong>consequences<\/strong>:<\/p>\n<ul>\n<li>employee protection, e.g. limited right of termination under Dismissal Protection Act;<\/li>\n<li>continued payment of salary during public holidays, illness and holidays;<\/li>\n<li>minimum wage under <a href=\"http:\/\/www.gesetze-im-internet.de\/milog\/index.html\" target=\"_blank\" rel=\"noopener\">Minimum Wage Act of 11\u00a0August\u00a02014<\/a>;<\/li>\n<li>obligation to pay contributions to social security;<\/li>\n<li>income tax on salary;<\/li>\n<li>adherence to worker participation and collective bargaining agreements if applicable.<\/li>\n<li>exclusive competence of labour courts if the employee has, during the last 6\u00a0months of activity, earned an average amount which does not exceed EUR\u00a01,000 per month.<\/li>\n<\/ul>\n<p style=\"text-align: center;\">\n&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;-<\/p>\n<p class=\"p1\" style=\"text-align: center;\"><strong>Need help with your International Distribution Contracts? <\/strong><\/p>\n<p class=\"p1\" style=\"text-align: center;\">Click the button below to Receive Support from our Expert Lawyers thanks to the Online Help Desk<\/p>\n<p style=\"text-align: center;\"><a class=\"typeform-share button\" style=\"display: inline-block; text-decoration: none; background-color: #fc3668; color: white; cursor: pointer; font-family: Helvetica,Arial,sans-serif; font-size: 20px; line-height: 50px; text-align: center; margin: 0; height: 50px; padding: 0px 33px; border-radius: 4px; max-width: 100%; white-space: nowrap; overflow: hidden; text-overflow: ellipsis; font-weight: bold; -webkit-font-smoothing: antialiased; -moz-osx-font-smoothing: grayscale;\" href=\"https:\/\/legalmondo.typeform.com\/to\/WzOi8F\" target=\"_blank\" rel=\"noopener noreferrer\" data-mode=\"popup\">Distribution Online Help Desk <\/a> <script> (function() { var qs,js,q,s,d=document, gi=d.getElementById, ce=d.createElement, gt=d.getElementsByTagName, id=\"typef_orm_share\", b=\"https:\/\/embed.typeform.com\/\"; if(!gi.call(d,id)){ js=ce.call(d,\"script\"); js.id=id; js.src=b+\"embed.js\"; q=gt.call(d,\"script\")[0]; q.parentNode.insertBefore(js,q) } })() <\/script><\/p>\n<p style=\"text-align: center;\">&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;-<\/p>\n<p>Agency contracts are <strong>governed by <\/strong><a href=\"http:\/\/www.gesetze-im-internet.de\/hgb\/\" target=\"_blank\" rel=\"noopener\"><strong>sec.\u00a084\u201392c\u00a0German Commercial Code (HGB<\/strong><\/a><strong>)<\/strong>. The commercial agent is, next to the employee, strongly protected, e.g. by mandatory rules on remuneration, minimum notice periods, and goodwill indemnity. As regards <strong>remuneration<\/strong>, the agent is entitled to<\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li>\u201c<em>del credere commission<\/em>\u201d if the agent assumes liability for fulfilment of businesses (<a href=\"http:\/\/www.gesetze-im-internet.de\/hgb\/\" target=\"_blank\" rel=\"noopener\">sec.\u00a086b\u00a0HGB<\/a>);<\/li>\n<li>an advance on commission once the principal has performed its obligation (<a href=\"http:\/\/www.gesetze-im-internet.de\/hgb\/\" target=\"_blank\" rel=\"noopener\">sec.\u00a087a para.\u00a01\u00a0HGB<\/a>);<\/li>\n<li>accounting within maximum periods of three months (<a href=\"http:\/\/www.gesetze-im-internet.de\/hgb\/\" target=\"_blank\" rel=\"noopener\">sec.\u00a087c (1)\u00a0HGB<\/a>);<\/li>\n<li>commission irrespective of delivery and payment, unless the principal is not responsible for non-delivery (s<a href=\"http:\/\/www.gesetze-im-internet.de\/hgb\/\" target=\"_blank\" rel=\"noopener\">ec.\u00a087a (\u00a03)\u00a0HGB<\/a>);<\/li>\n<li>request information, statements of account, an excerpt from the books, and inspection by an auditor (<a href=\"http:\/\/www.gesetze-im-internet.de\/hgb\/\" target=\"_blank\" rel=\"noopener\">sec.\u00a087c\u00a0HGB<\/a>).<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>These rules are <strong>mandatory<\/strong> and cannot be contracted out. Further details on the payment of commission (if not agreed otherwise) are set in <a href=\"http:\/\/www.gesetze-im-internet.de\/hgb\/\" target=\"_blank\" rel=\"noopener\">sec.\u00a086b et\u00a0seq.\u00a0HGB<\/a>.<\/p>\n<p>Besides, <strong>both parties have to safeguard each other\u2019s interests<\/strong> (<a href=\"http:\/\/www.gesetze-im-internet.de\/hgb\/\" target=\"_blank\" rel=\"noopener\">sec.\u00a086, 86a, 90\u00a0HGB<\/a> and <a href=\"http:\/\/www.gesetze-im-internet.de\/englisch_bgb\/index.html\" target=\"_blank\" rel=\"noopener\">sec.\u00a0242\u00a0BGB<\/a>). The<strong>agent<\/strong> is especially obliged to<\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li>check the customers\u2019 creditworthiness,<\/li>\n<li>inform the supplier immediately about any business procured,<\/li>\n<li>keep confidential any information obtained during his activity, and<\/li>\n<li>abstain from acting for the supplier\u2019s competitors.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><strong>Agency agreements can be terminated<\/strong> without cause if contractually agreed. However, mandatory notice periods have to be observed, staggered pursuant to the contractual term: from one month in the first year to six months after five years (<a href=\"http:\/\/www.gesetze-im-internet.de\/hgb\/\" target=\"_blank\" rel=\"noopener\">sec.\u00a089\u00a0(\u00a01)\u00a0HGB<\/a>). The notice periods cannot be shortened, and, in case of extension, the supplier\u2019s notice period must not be shorter than the agent\u2019s one (<a href=\"http:\/\/www.gesetze-im-internet.de\/hgb\/\" target=\"_blank\" rel=\"noopener\">sec.\u00a089 (2)\u00a0HGB<\/a>). A cause is only required if the agreement is terminated without notice period (<a href=\"http:\/\/www.gesetze-im-internet.de\/hgb\/\" target=\"_blank\" rel=\"noopener\">sec.\u00a089a\u00a0HGB<\/a>). It is given if the terminating party cannot reasonably be expected to continue the relationship until ordinary termination (considering all circumstances of the single case and weighing the interests of both parties).<\/p>\n<p>The agent is <strong>entitled to indemnity if<\/strong> the agent has brought new customers or has significantly increased the business volume with existing customers, which results in benefits for the principal, and if such payment of indemnity is equitable under the given circumstances (<a href=\"http:\/\/www.gesetze-im-internet.de\/hgb\/\" target=\"_blank\" rel=\"noopener\">sec.\u00a089b\u00a0HGB<\/a>). <strong>Indemnity is calculated<\/strong> on basis of the commission earned during the last 12\u00a0months of activity, earned with new customers, and existing customers towards whom the agent has substantially increased the sales. Indemnity is capped to a maximum of the past five year\u2019s average annual commission (<a href=\"http:\/\/www.gesetze-im-internet.de\/hgb\/\" target=\"_blank\" rel=\"noopener\">sec.\u00a089b\u00a0HGB<\/a>). The claim cannot be waived before termination, but is excluded if the agent has not notified the principal within one year following termination. <strong>Indemnity is not payable<\/strong> <strong>if<\/strong><\/p>\n<ul>\n<li>the agent terminated the contract (unless justified by circumstances attributable to the principal or because of the agent\u2019s age or illness),<\/li>\n<li>the principle has terminated the contract because of default attributable to the agent (which would justify immediate termination for cause), or<\/li>\n<li>the agent, with the principal\u2019s agreement, assigns and transfers its rights and duties under the agency contract to another person.<\/li>\n<\/ul>\n<p>Indemnity cannot be contracted out, unless the agent acts outside EEA (<a href=\"http:\/\/www.gesetze-im-internet.de\/hgb\/\" target=\"_blank\" rel=\"noopener\">sec.\u00a092c\u00a0HGB).<\/a><\/p>\n<p><strong>Antitrust law does generally not apply to the agent-relationship<\/strong>, provided that the principal bears the commercial and financial risks related to selling and purchasing the products or services (<a href=\"http:\/\/eur-lex.europa.eu\/legal-content\/EN\/ALL\/?uri=CELEX:52010SC0411\" target=\"_blank\" rel=\"noopener\">Guidelines on Vertical Restraints of 10\/05\/2010<\/a>, para.\u00a012 et seq., 18, 49). Therefore, suppliers can control the price for which they sell the products \/ services via agents. Special limits apply only to <strong>post-contractual non-compete-obligations<\/strong> if concluded <strong>before termination<\/strong>. They must be limited to a two-year-maximum, to the agent\u2019s territory or customers, and to the contractual products or services. Further, they must be done in writing and delivered to the agent. The principal has to pay an indemnity for the non-compete obligation\u2019s term (<a href=\"http:\/\/www.gesetze-im-internet.de\/hgb\/\" target=\"_blank\" rel=\"noopener\">sec.\u00a090a\u00a0HGB).<\/a><\/p>\n<p>Generally, the parties are <strong>free to choose<\/strong> <strong>the applicable law<\/strong> (<a href=\"http:\/\/eur-lex.europa.eu\/legal-content\/EN\/ALL\/?uri=CELEX:32008R0593\" target=\"_blank\" rel=\"noopener\">art.\u00a03\u00a0Rome-I-Regulation<\/a>). If, however, all elements relevant for the choice of law are located in another country than that of the chosen law, the choice of law shall not prejudice the provisions which cannot be derogated from by agreement (<a href=\"http:\/\/eur-lex.europa.eu\/legal-content\/EN\/ALL\/?uri=CELEX:32008R0593\" target=\"_blank\" rel=\"noopener\">art.\u00a03 (3) and (4)\u00a0Rome-I-Regulation<\/a>).<\/p>\n<p><strong>Overriding mandatory provisions<\/strong> of the forum\u2019s law cannot be avoided by choosing another law. The courts may also give effect to overriding mandatory provisions of the country where the contractual obligations have to be performed (cf. <a href=\"http:\/\/eur-lex.europa.eu\/legal-content\/EN\/ALL\/?uri=CELEX:32008R0593\" target=\"_blank\" rel=\"noopener\">art.\u00a09\u00a0Rome-I-Regulation<\/a>). Overriding mandatory rules are especially most of the protective agency law provisions. If, therefore, the agent acts within the EU, the agent\u2019s claim for goodwill indemnity (based on the <a href=\"http:\/\/eur-lex.europa.eu\/legal-content\/EN\/TXT\/?uri=CELEX:31986L0653\" target=\"_blank\" rel=\"noopener\">EU Directive on self-employed commercial agents of 1986<\/a>) can hardly be contracted out \u2013 even if the parties choose a foreign law (cf. European Court of Justice, decision of 09\/11\/2000 [\u201c<em>Ingmar<\/em>\u201d], concerning, however, the former <a href=\"http:\/\/eur-lex.europa.eu\/legal-content\/EN\/ALL\/?uri=CELEX:41980A0934\" target=\"_blank\" rel=\"noopener\">Rome Convention on Law Applicable to Contractual Obligations of 1980<\/a>). Arguments against applying the same principles under the <a href=\"http:\/\/eur-lex.europa.eu\/legal-content\/EN\/ALL\/?uri=CELEX:32008R0593\" target=\"_blank\" rel=\"noopener\">Rome-I-Regulation<\/a> exist, but there is yet no case law which favors such interpretation.<\/p>\n<p>Generally, the parties are <strong>free to choose a court<\/strong>, especially if<\/p>\n<ul>\n<li>the other party resides in another EU Member State, and the parties have chosen the court(s) of a EU Member State (<a href=\"http:\/\/eur-lex.europa.eu\/legal-content\/EN\/ALL\/?uri=CELEX:32012R1215\" target=\"_blank\" rel=\"noopener\">art.\u00a025\u00a0Brussels-Ia-Regulation<\/a>);<\/li>\n<li>the other party resides in Iceland, Switzerland or Norway, and the parties have chosen the courts of one of these States or Germany (<a href=\"http:\/\/eur-lex.europa.eu\/legal-content\/EN\/TXT\/?qid=1420825773997&amp;uri=OJ:JOL_2007_339_R_0001_01\" target=\"_blank\" rel=\"noopener\">art.\u00a023\u00a0Lugano-II-Convention<\/a>); or<\/li>\n<li>both parties are merchants, legal persons under public law, or special assets under public law, or the other party resides outside Germany (<a href=\"http:\/\/www.gesetze-im-internet.de\/englisch_zpo\/index.html\" target=\"_blank\" rel=\"noopener\">sec.\u00a038\u00a0Code of Civil Procedure [\u201cZPO\u201d]<\/a>).<\/li>\n<\/ul>\n<p>Besides, the parties may also choose <strong>arbitration<\/strong> (<a href=\"http:\/\/www.gesetze-im-internet.de\/englisch_zpo\/index.html\" target=\"_blank\" rel=\"noopener\">sec.\u00a01029 et\u00a0seq.\u00a0ZPO<\/a>, and <a href=\"http:\/\/eur-lex.europa.eu\/legal-content\/EN\/ALL\/?uri=CELEX:32012R1215\" target=\"_blank\" rel=\"noopener\">art.\u00a01 (2)d\u00a0Brussels-Ia-Regulation<\/a>and <a href=\"http:\/\/eur-lex.europa.eu\/legal-content\/EN\/TXT\/?qid=1420825773997&amp;uri=OJ:JOL_2007_339_R_0001_01\" target=\"_blank\" rel=\"noopener\">art.\u00a01 (2)d\u00a0Lugano-II-Convention<\/a>).<\/p>\n<p>However, <strong>a choice of court or arbitration can hardly avoid overriding mandatory provisions<\/strong>, as ruled by the Higher Regional Court in Munich (decision of 17\/05\/2006), and confirmed by the BGH <a href=\"http:\/\/www.taylorwessing.com\/newsletter\/commercial\/newsletter-commercial-dezember-2012\/kein-ausschluss-des-handelsvertreterausgleichs-per-gerichtsstandsvereinbarung.html\" target=\"_blank\" rel=\"noopener\">(decision of 05\/09\/2012)<\/a>.<\/p>\n<p>Suppliers and distribution partners <strong>are free to use any means of dispute resolution<\/strong>, especially out-of-court-negotiation, mediation, arbitration, litigation. Restrictions exist only insofar as overriding mandatory provisions can hardly be avoided by means of dispute resolution (see above). Suppliers and distribution partners can expect <strong>fair treatment<\/strong> in German courts since the judges are well-trained, have been determined beforehand, and the parties are entitled to due process of law (<a href=\"http:\/\/www.gesetze-im-internet.de\/englisch_gg\/\" target=\"_blank\" rel=\"noopener\">art.\u00a0101, 103\u00a0German Constitution<\/a>). Advantages of resolving disputes in Germany are (inter alia) that <strong>court rulings are quite foreseeable<\/strong> and that <strong>court proceedings are<\/strong> <strong>quite quick<\/strong> (8.2\u00a0months for proceedings in the district courts according to the latest statistics).<\/p>\n<p><strong>Distribution or Concession of sale<\/strong><\/p>\n<p><strong>Distributors<\/strong> buy and sell products on their own behalf. Consequently, they bear distribution risks, and, in return, gain profit from the difference between purchase and resale price, while suppliers\u2019 margins are rather low. The distributor is obliged to market and distribute the supplier\u2019s products, and to safeguard the supplier\u2019s interests. Distributors are less protected than commercial agents (exceptions: see below). The <strong>supplier<\/strong> is obliged to assist and take care of his distribution partner, subject, however, to the supplier\u2019s economic freedom.<\/p>\n<p><strong>Distributorship contracts<\/strong> are \u2013 as in most EU member states \u2013 <strong>not explicitly regulated by statutory law<\/strong>. However, there is <strong>extensive case law<\/strong>, e.g. whether the supplier has to take back products unsold at termination of contract. Agency law applies by analogy if the distributor is:<\/p>\n<ul>\n<li>integrated into the supplier\u2019s sales organization; and<\/li>\n<li>obliged (due to agreement or factually) to forward customer data during or at termination of contract.<\/li>\n<\/ul>\n<p>Further, distributorship contracts have to conform to <strong>antitrust law<\/strong>. Generally, the antitrust law of any affected market applies (<a href=\"http:\/\/eur-lex.europa.eu\/legal-content\/EN\/TXT\/?qid=1420800416838&amp;uri=CELEX:32007R0864\" target=\"_blank\" rel=\"noopener\">art.\u00a06 (3a) Rome-II-Regulation<\/a>). Agreements which aim at or result in restraints of competition are prohibited by antitrust law, namely by the German <a href=\"http:\/\/www.gesetze-im-internet.de\/englisch_gwb\/index.html\" target=\"_blank\" rel=\"noopener\">Act Against Restraints of Competition (\u201cGWB\u201d<\/a>) and<a href=\"http:\/\/eur-lex.europa.eu\/legal-content\/EN\/ALL\/?uri=CELEX%3A32010R0330\" target=\"_blank\" rel=\"noopener\">art.\u00a0101, 102\u00a0Treaty on the Functioning of the EU (\u201cTFEU\u201d)<\/a>. <strong>Unless<\/strong> agreements contain <strong>hardcore restrictions<\/strong>, a<strong>safe harbor<\/strong> is provided by the <a href=\"http:\/\/eur-lex.europa.eu\/legal-content\/EN\/TXT\/?uri=uriserv:OJ.C_.2014.291.01.0001.01.ENG\" target=\"_blank\" rel=\"noopener\">De Minimis Notice of 30\/08\/2014<\/a> and the <a href=\"http:\/\/eur-lex.europa.eu\/legal-content\/EN\/ALL\/?uri=CELEX%3A32010R0330\" target=\"_blank\" rel=\"noopener\">Vertical Block Exemption Regulation no.\u00a0330\/2010 [\u201cVBER\u201d]<\/a>). <strong>Hardcore restrictions<\/strong> are generally prohibited, regardless of the parties\u2019 market shares, especially price fixing, restricting the geographic areas or categories of customers, or cross-supplies between distributors within a selective distribution system. If one party\u2019s <strong>market share exceeds 30%<\/strong>, any restriction of competition can <strong>only<\/strong> benefit from the <strong>individual exemption<\/strong> under the strict criteria of <a href=\"http:\/\/eur-lex.europa.eu\/legal-content\/EN\/ALL\/?uri=CELEX%3A32010R0330\" target=\"_blank\" rel=\"noopener\">art.\u00a0101 (3)\u00a0TFEU<\/a>(\u201c<u>efficiency defense<\/u>\u201d). Here are the most relevant types of clauses.<\/p>\n<p>As regards<strong> non-compete-obligations<\/strong>, they are enforceable if they conform to antitrust law:<\/p>\n<ul>\n<li>Such agreements between non-competitors are safe if each party\u2019s market share does not exceed 15% on any relevant market affected. If one party\u2019s market share exceeds 15%, but none exceeds 30%, a non-compete-obligation <strong>during the contractual term<\/strong> is valid if limited up to 5\u00a0years at most. Where products are sold on premises owned or leased by supplier from third parties, the five-year maximum does not apply. However, the non-compete obligation cannot exceed the term the buyer is occupying the premises.<\/li>\n<li><strong>After the contractual term<\/strong>, a non-compete obligation where one party\u2019s market share exceeds 15%, but none exceeds 30%, is valid if it is necessary to protect know-how transferred to the distributor, and if limited to competing products, the concrete distributor\u2019s premises, and a 1-year-term.<\/li>\n<\/ul>\n<p>A supplier <strong>can generally not<\/strong> <strong>fix<\/strong> a resale price or price level at which its <strong>distributors or franchisees<\/strong> resell (except for suppliers that manufacture newspapers, magazines and books, <a href=\"http:\/\/www.gesetze-im-internet.de\/englisch_gwb\/index.html\" target=\"_blank\" rel=\"noopener\">sec.\u00a030\u00a0GWB<\/a>). An agreement or behaviour that aims at establishing such resale price maintenance is treated as <strong>hardcore restriction a<\/strong>nd therefore<strong>generally void<\/strong> (cf. <a href=\"http:\/\/eur-lex.europa.eu\/legal-content\/EN\/ALL\/?uri=CELEX:52010SC0411\" target=\"_blank\" rel=\"noopener\">Guidelines on Vertical Restraints of 10\/05\/2010<\/a>, para.\u00a048, 223). By way of <strong>\u2013 rare \u2013 exception<\/strong>, the supplier can plead the efficiency defense (e.g. when introducing a new product or a coordinated short term low price campaign).<\/p>\n<p>However, resale prices can be influenced by recommending resale prices or setting maximum resale prices:<strong>Recommending<\/strong> resale prices or setting maximum resale prices is exempt from antitrust law if the parties\u2019 market shares do not exceed 30% (beyond, there is only room for the efficiency defense), and only if it does not result in a minimum or fixed sale price because of pressure or incentives from one party (<a href=\"http:\/\/eur-lex.europa.eu\/legal-content\/EN\/ALL\/?uri=CELEX%3A32010R0330\" target=\"_blank\" rel=\"noopener\">art.\u00a0101 (1)\u00a0TFEU<\/a> and<a href=\"http:\/\/eur-lex.europa.eu\/legal-content\/EN\/ALL\/?uri=CELEX%3A32010R0330\" target=\"_blank\" rel=\"noopener\">art.\u00a04 (a)\u00a0VBER<\/a>).<\/p>\n<p><strong>E<\/strong><strong>stablishing a minimum advertised price policy<\/strong> is exempt if it works as mere recommendation. If, however, it results in minimum resale prices or a fixed or minimum price level, it can only be exempt under the efficiency defense.<\/p>\n<p>By contrast, a supplier shall <strong>not<\/strong> <strong>announce not to deal with distributors or franchisees<\/strong> that do not follow its pricing policy because it will be treated as fixing the selling prices (see above).<\/p>\n<p><strong>Most-favored nation or most-favored customer clauses<\/strong> are those which specify that the supplier\u2019s price to the distributor will be no higher than its lowest price to other customer. Such clauses are enforceable if agreed between non-competitors and if none of the parties\u2019 market shares exceeds 30% (beyond, there is only room for the efficiency defense).<\/p>\n<p>The <strong>distributor on its side can generally charge different prices<\/strong> to different customers because of freedom of contract. However, a seller<\/p>\n<ul>\n<li>may have to charge the same prices if it holds a <strong>dominant or similarly strong market position<\/strong>(<a href=\"http:\/\/www.gesetze-im-internet.de\/englisch_gwb\/index.html\" target=\"_blank\" rel=\"noopener\">sec.\u00a019, 20\u00a0GWB<\/a> and <a href=\"http:\/\/eur-lex.europa.eu\/legal-content\/EN\/ALL\/?uri=CELEX%3A32010R0330\" target=\"_blank\" rel=\"noopener\">art.\u00a0102\u00a0TFEU<\/a>);<\/li>\n<li>may generally not charge different prices <strong>on grounds of race or ethnic origin<\/strong>. The same goes on<strong>grounds of sex, religion, disability, age or sexual orientation<\/strong> if the respective sales contract is typically concluded without or with low importance of the buyer\u2019s person, especially in \u201cbulk business\u201d. An exception exists if different treatment is based on objective grounds, especially where it serves to avoid threats, prevent damage etc. <a href=\"http:\/\/www.agg-ratgeber.de\/files\/pdf\/AGG_en.pdf\" target=\"_blank\" rel=\"noopener\">(sec.\u00a019, 20\u00a0Anti-Discrimination Act, \u201cAGG\u201d<\/a>).<\/li>\n<\/ul>\n<p>A supplier may <strong>not<\/strong> <strong>restrict the territory<\/strong> into which, or the customers to whom its distribution partner sells (<a href=\"http:\/\/eur-lex.europa.eu\/legal-content\/EN\/ALL\/?uri=CELEX%3A32010R0330\" target=\"_blank\" rel=\"noopener\">art.\u00a0101 (1)\u00a0b\u00a0TFEU<\/a>). <strong>Exempt<\/strong> are, however, restrictions of:<\/p>\n<ul>\n<li>active sales into the exclusive territory or an exclusive customer group reserved to the supplier or another distribution partner;<\/li>\n<li>sales to end users if the distribution partner operates at wholesale level;<\/li>\n<li>sales from members of a selective distribution system to unauthorised distributors in the system\u2019s territory; and<\/li>\n<li>selling components, supplied for incorporation, to customers who would use them to manufacture the same kind of products (<a href=\"http:\/\/eur-lex.europa.eu\/legal-content\/EN\/ALL\/?uri=CELEX%3A32010R0330\" target=\"_blank\" rel=\"noopener\">art.\u00a04 (b)\u00a0VBER<\/a>).<\/li>\n<\/ul>\n<p><strong>Active sales<\/strong> mean actively approaching individual customers (e.g. by direct, unsolicited mail, e-mail, visits) or a customer group in a specific territory trough promotions specifically targeted at that group. <strong>Passive sales<\/strong> mean responding to unsolicited requests from individual customers, including general advertising which reaches customers in other exclusive territories or customer groups if done reasonably. This also applies to the internet: sales via webshops cannot be excluded. A supplier may only, however, require its distribution partner to fulfil certain quality standards, especially in selective distribution (<a href=\"http:\/\/eur-lex.europa.eu\/legal-content\/EN\/ALL\/?uri=CELEX:52010SC0411\" target=\"_blank\" rel=\"noopener\">Guidelines on Vertical Restraints of 10\/05\/2010<\/a>, para.\u00a051, 54).<\/p>\n<p>At the end of the distribution chain, <strong>consumer protection laws<\/strong> apply, namely <strong>between the seller and the buying consumer<\/strong>. Statutory law grants a 2-year-<strong>warranty<\/strong> that products are free from defects at the passing of risk. In case of defect, the buyer is entitled to claim subsequent performance (remedy of defect or delivery of a defect-free product), alternatively price reduction or withdrawal (all regardless of fault), and, damages, provided that the seller has acted with fault (<a href=\"http:\/\/www.gesetze-im-internet.de\/englisch_bgb\/index.html\" target=\"_blank\" rel=\"noopener\">sec.\u00a0437, 280 et seq. BGB<\/a>). Though fault is generally assumed by law, the seller can exculpate itself, especially if the seller has not manufactured the good (but its sub-supplier). Towards consumers, these rights cannot be contracted out (<a href=\"http:\/\/www.gesetze-im-internet.de\/englisch_bgb\/index.html\" target=\"_blank\" rel=\"noopener\">sec.\u00a0474, 475\u00a0BGB<\/a>). <strong>Each seller within the distribution chain is entitled to have recourse<\/strong> against its own supplier if the product has already been defective at the respective delivery (<a href=\"http:\/\/www.gesetze-im-internet.de\/englisch_bgb\/index.html\" target=\"_blank\" rel=\"noopener\">sec.\u00a0478, 479\u00a0BGB<\/a>). In order to maintain these rights, however, the buyer (unless consumer) already has to check at delivery if products are defective, and inform the seller accordingly (<a href=\"http:\/\/www.gesetze-im-internet.de\/hgb\/\" target=\"_blank\" rel=\"noopener\">sec.\u00a0377, 378 HGB<\/a>).<\/p>\n<p>Besides, <strong>special information duties<\/strong> towards consumers exist in:<\/p>\n<ul>\n<li>\u00a0over the phone sales (<a href=\"http:\/\/www.gesetze-im-internet.de\/englisch_bgb\/index.html\" target=\"_blank\" rel=\"noopener\">sec.\u00a0312a (1)\u00a0BGB<\/a>);<\/li>\n<li>over-the-counter sales, except everyday sales (<a href=\"http:\/\/www.gesetze-im-internet.de\/englisch_bgb\/index.html\" target=\"_blank\" rel=\"noopener\">sec.\u00a0312a (2)\u00a02\u00a0BGB<\/a>, <a href=\"http:\/\/www.gesetze-im-internet.de\/englisch_bgbeg\/index.html\" target=\"_blank\" rel=\"noopener\">art.\u00a0246 (2)\u00a0EGBGB<\/a>);<\/li>\n<li>e-commerce (<a href=\"http:\/\/www.gesetze-im-internet.de\/englisch_bgb\/index.html\" target=\"_blank\" rel=\"noopener\">sec.\u00a0312j\u00a0BGB<\/a>); and<\/li>\n<li>direct distribution off-premises and distance contracts (<a href=\"http:\/\/www.gesetze-im-internet.de\/englisch_bgb\/index.html\" target=\"_blank\" rel=\"noopener\">sec.\u00a0312d\u00a0BGB<\/a>).<\/li>\n<\/ul>\n<p>Statutory law also <strong>limits<\/strong> the <strong>fees<\/strong> which the consumer shall pay beyond for means of payment or consumer hotlines etc. (<a href=\"http:\/\/www.gesetze-im-internet.de\/englisch_bgb\/index.html\" target=\"_blank\" rel=\"noopener\">sec.\u00a0312a (3\u20135)\u00a0BGB<\/a>). Finally, the consumer has a <strong>right of withdrawal<\/strong> regarding distance and off-premises contracts (<a href=\"http:\/\/www.gesetze-im-internet.de\/englisch_bgb\/index.html\" target=\"_blank\" rel=\"noopener\">sec.\u00a0312g, 355\u00a0BGB<\/a>).<\/p>\n<p>These consumer rights are similar <strong>throughout the EU<\/strong> because they are influenced by the <a href=\"http:\/\/eur-lex.europa.eu\/legal-content\/EN\/ALL\/?uri=CELEX:31999L0044\" target=\"_blank\" rel=\"noopener\">EU\u00a0Directives 1999\/44\/EC<\/a> on the sale of consumer goods and <a href=\"http:\/\/eur-lex.europa.eu\/legal-content\/EN\/TXT\/?qid=1420799250079&amp;uri=CELEX:32011L0083\" target=\"_blank\" rel=\"noopener\">2011\/83\/EU<\/a> on consumer rights.<\/p>\n<p>A supplier <strong>may limit the warranty rights<\/strong> granted by statutory law <strong>towards its distribution partners<\/strong>. In general, there are few limits to <strong>individual agreements<\/strong>: they must not contradict statutory prohibitions (<a href=\"http:\/\/www.gesetze-im-internet.de\/englisch_bgb\/index.html\" target=\"_blank\" rel=\"noopener\">sec.\u00a0134\u00a0BGB<\/a>) and public policy (<a href=\"http:\/\/www.gesetze-im-internet.de\/englisch_bgb\/index.html\" target=\"_blank\" rel=\"noopener\">sec.\u00a0138\u00a0BGB<\/a>), and must not limit or exclude liability for willful intent, fraudulently concealing defects, where a guarantee has been given, or according to product liability law (<a href=\"http:\/\/www.gesetze-im-internet.de\/englisch_bgb\/index.html\" target=\"_blank\" rel=\"noopener\">sec.\u00a0202, 276, 444, 639\u00a0BGB<\/a>). If the product has been found defective at the consumer, and the defect has already been existing between the distribution partners, a limitation of warranty can only be enforced if the supplier provides another compensation of equal value (<a href=\"http:\/\/www.gesetze-im-internet.de\/englisch_bgb\/index.html\" target=\"_blank\" rel=\"noopener\">sec.\u00a0478 (4)\u00a0BGB<\/a>).<\/p>\n<p>In <strong>standard business terms<\/strong>, however, one may <strong>hardly deviate from statutory law<\/strong> \u2013 even in B2B-contracts (<a href=\"http:\/\/www.gesetze-im-internet.de\/englisch_bgb\/index.html\" target=\"_blank\" rel=\"noopener\">sec.\u00a0310\u00a0(1) and 307\u00a0BGB<\/a>). One may only<\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li>\u00a0modify the rules of subsequent performance (time, place, number of attempts);<\/li>\n<li>exclude liability for slightly negligent breaches of non-cardinal duties; and<\/li>\n<li>limit liability for slightly negligent breaches of cardinal duties to the typical damages foreseeable at conclusion of contract.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>The same goes for warranties provided to each downstream customer, unless the customer is a consumer because a consumer\u2019s statutory rights cannot be contracted out.As regards <strong>product recalls<\/strong>, statutory law does not set any requirements. According to case law, a manufacturer must keep its products under surveillance and, when detecting risks for legally protected goods (as health), adopt the necessary preventive measures.<strong>Extent and time of such measures<\/strong> depends on the single case, especially the good at risk and the extent of possible damage (BGH, decision of 16\/12\/2008). Distribution agreements can delineate which party is<strong>responsible for a recall and its costs<\/strong>. Individual agreements are not subject to specific limits. Standard business terms, however, are subject to a strict review in court: they can be unenforceable if they are incompatible with essential statutory principles, if they limit essential contractual rights and duties, if they are surprising or ambiguous (<a href=\"http:\/\/www.gesetze-im-internet.de\/englisch_bgb\/index.html\" target=\"_blank\" rel=\"noopener\">sec.\u00a0310 (1), 307, 305c\u00a0BGB<\/a>). Therefore, such terms should consider who would typically be responsible for recall and costs, depending on the product (ready-made, or not, etc.).<\/p>\n<p><strong>Distributor agreements <\/strong>with indefinite term can be terminated (<a href=\"http:\/\/www.gesetze-im-internet.de\/englisch_bgb\/index.html\" target=\"_blank\" rel=\"noopener\">sec.\u00a0314, 573, 620 (2), 723\u00a0BGB<\/a>); the notice period depends, however, on the single case, considering also the distributor\u2019s investments. E.g., one-year periods have been accepted in automotive distribution (BGH, decision of 21\/02\/1995 [Citro\u00ebn]). In rare cases, antitrust law may demand a renewal of the relationship.<\/p>\n<p>The <strong>distributor<\/strong> can claim indemnity only by analogue application of agency law (see above). The distributor\u2019s indemnity can amount to the distributor\u2019s average annual net margin.As regards <strong>applicable law \/ choice of law<\/strong>and details on <strong>dispute resolution<\/strong> (choice of court, choice of arbitration \/ mediation), please see above in the section on agents.<\/p>\n<p><strong>Franchising<\/strong><\/p>\n<p><strong>Franchisees <\/strong>buy and sell products on their own behalf. The franchisee acquires licences of intellectual property rights (trademarks and know-how) from the supplier (franchisor) for using and distributing the products or services. The franchisee is entitled and obliged to design its shop according to the franchisor\u2019s concept and corporate design, and use the management-\/system-specific know-how. In return, the franchisee pays royalties. The franchisor is precontractually obliged to disclose the key risks and issues for running the franchise, and subsequently often provides assistance on know-how and business.<\/p>\n<p><strong>Franchise contracts<\/strong> are <strong>not explicitly governed by statutory law<\/strong> (unlike e.g. in Italy). They combine elements of licensing, sales, and management of another\u2019s affairs. Generally, agency law applies by analogy (cf. German Federal Court of Justice [\u201c<u>BGH<\/u>\u201d], decision of 17\/07\/2002).<\/p>\n<p>Within <strong>franchisee relationships<\/strong>, the same antitrust rules apply as within distributor relationships: generally, agreements which aim at or result in restraints of competition are prohibited by antitrust law, namely by the German <a href=\"http:\/\/www.gesetze-im-internet.de\/englisch_gwb\/index.html\" target=\"_blank\" rel=\"noopener\">Act Against Restraints of Competition (\u201cGWB\u201d<\/a>) and <a href=\"http:\/\/eur-lex.europa.eu\/legal-content\/EN\/ALL\/?uri=CELEX%3A32010R0330\" target=\"_blank\" rel=\"noopener\">art.\u00a0101, 102\u00a0Treaty on the Functioning of the EU (\u201cTFEU\u201d)<\/a>. For details, please see above in the section on distributors.<\/p>\n<p><strong>Franchise agreements can be terminated<\/strong> according to agency law (mutatis mutandis). However, longer periods can apply in the specific case, e.g. if the franchisee made considerable investments due to the supplier\u2019s product.<\/p>\n<p>The franchisee can <strong>likely claim indemnity<\/strong> based on analogue application of agency law, but this has not yet been ruled out (BGH, decision of 23 July 1997, Benetton). No indemnity, however, can be claimed where the franchise concerns anonymous bulk business and customers continue to be regular customers only de facto (BGH, decision of 5 February 2015).<\/p>\n<p><strong>Trademark license<\/strong><\/p>\n<p>If a company owns a brand or design, such trademark owner can also distribute the product or service by<strong>granting a trademark license<\/strong> to another party (\u201clicensee\u201d). By way of such license agreement, the trademark owner (\u201clicensor\u201d) allows the licensee to make use of its trademark.<\/p>\n<p>The <strong>license agreement<\/strong> should especially cover:<\/p>\n<ul>\n<li>the trademark;<\/li>\n<li>the goods and\/or services which the licensee is entitled to offer under the trademark and details on the use of the trademark (with or on the goods and\/or services, promotion material);<\/li>\n<li>the territory where the licensee is entitled to use the trademark;<\/li>\n<li>any exclusivity of the license (if applicable);<\/li>\n<li>royalty (in return for the license);<\/li>\n<li>quality control (e.g. approval of samples prior to mass production and audit rights as regards the licensee\u2019s facilities, the raw materials used and the final products);<\/li>\n<li>the license\u2019s term; and<\/li>\n<\/ul>\n<p>the usual boilerplate clauses (written form, no waiver, severability, choice of law, choice of court etc.).<\/p>\n<p><strong>Selling via e-commerce (required licences, if any)<\/strong><\/p>\n<p>Selling via e-commerce does <strong>not require special licenses<\/strong> in Germany. However, certain <strong>requirements<\/strong> have <strong>to be observed<\/strong> as regards the webshop, especially providing clearly<\/p>\n<ul>\n<li>the basic information about the entity behind the webshop (\u201c<em>Contact<\/em>\u201c, \u201c<em>Imprint<\/em>\u201d or \u201c<em>Legal Notes<\/em>\u201d);<\/li>\n<li>the terms and conditions of sale; and<\/li>\n<li>the privacy policy (it should mention which kind of personal identifiable data [\u201cdata\u201d] is stored, how data, cookies and web-tracking are used, and explain the customer\u2019s right to inform about, correct and delete data, cf. sec. 13 <a href=\"http:\/\/www.gesetze-im-internet.de\/tmg\/\" target=\"_blank\" rel=\"noopener\">German Telemedia Act<\/a>).<\/li>\n<\/ul>\n<p><strong>Relevant anti-trust regulations<\/strong><\/p>\n<p>According to the effects doctrine, the antitrust law of any affected market applies (<a href=\"http:\/\/eur-lex.europa.eu\/legal-content\/EN\/TXT\/?qid=1420800416838&amp;uri=CELEX:32007R0864\" target=\"_blank\" rel=\"noopener\">art.\u00a06 (3a) Rome-II-Regulation<\/a>). Within the European Economic Area (\u201c<em>EEA<\/em>\u201d), Agreements which aim at or result in restraints of competition are prohibited by antitrust law, namely by <a href=\"http:\/\/eur-lex.europa.eu\/legal-content\/EN\/ALL\/?uri=CELEX%3A32010R0330\" target=\"_blank\" rel=\"noopener\">art.\u00a0101, 102\u00a0Treaty on the Functioning of the EU (\u201cTFEU\u201d)<\/a> and in Germany also by the German <a href=\"http:\/\/www.gesetze-im-internet.de\/englisch_gwb\/index.html\" target=\"_blank\" rel=\"noopener\">Act Against Restraints of Competition (\u201cGWB\u201d<\/a>). <strong>Unless<\/strong>agreements contain <strong>hardcore restrictions<\/strong>, a <strong>safe harbor<\/strong> is provided by the <a href=\"http:\/\/eur-lex.europa.eu\/legal-content\/EN\/TXT\/?uri=uriserv:OJ.C_.2014.291.01.0001.01.ENG\" target=\"_blank\" rel=\"noopener\">De Minimis Notice of 30\/08\/2014<\/a> and the <a href=\"http:\/\/eur-lex.europa.eu\/legal-content\/EN\/ALL\/?uri=CELEX%3A32010R0330\" target=\"_blank\" rel=\"noopener\">Vertical Block Exemption Regulation no.\u00a0330\/2010 [\u201cVBER\u201d]<\/a>). <strong>Hardcore restrictions<\/strong> are generally prohibited, regardless of the parties\u2019 market shares, especially price fixing, restricting the geographic areas or categories of customers, or cross-supplies between distributors within a selective distribution system.<\/p>\n<p><strong>Details<\/strong> are explained above with each kind of distribution channel.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Agency (regulations, duration, termination, indemnities \u2013 if any) Instead of direct distribution (by setting up a branch, a subsidiary or via e-commerce), one can also distribute ones\u2019 products and \/ or services indirectly. Indirect distribution especially includes agents, distributors, franchisees or commission agents. Self-employed commercial agents solicit customers and can (but do not have to) [&hellip;]<\/p>\n","protected":false},"author":6,"featured_media":556,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[202],"tags":[220],"class_list":["post-555","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-distribution-agreements","tag-germany"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.legalmondo.com\/ru\/wp-json\/wp\/v2\/posts\/555","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.legalmondo.com\/ru\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.legalmondo.com\/ru\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.legalmondo.com\/ru\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/www.legalmondo.com\/ru\/wp-json\/wp\/v2\/comments?post=555"}],"version-history":[{"count":3,"href":"https:\/\/www.legalmondo.com\/ru\/wp-json\/wp\/v2\/posts\/555\/revisions"}],"predecessor-version":[{"id":12644,"href":"https:\/\/www.legalmondo.com\/ru\/wp-json\/wp\/v2\/posts\/555\/revisions\/12644"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.legalmondo.com\/ru\/wp-json\/wp\/v2\/media\/556"}],"wp:attachment":[{"href":"https:\/\/www.legalmondo.com\/ru\/wp-json\/wp\/v2\/media?parent=555"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.legalmondo.com\/ru\/wp-json\/wp\/v2\/categories?post=555"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.legalmondo.com\/ru\/wp-json\/wp\/v2\/tags?post=555"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}