MKB Juristen drafts custom legal documents
It is best not to cobble together or copy important contracts, terms and conditions, and other legal documents yourself. We help entrepreneurs on a budget with customized legal solutions, clear costs upfront, and practical explanations.
- Custom contracts, terms and conditions, and legal documents
- Budget-friendly and clear about the costs upfront
- Request a free consultation or a no-obligation quote
A distribution agreement regulates how a distributor purchases and resells a producer's products. When drafting, pay particular attention to three points: exclusivity and the territory, duration and termination, and competition rules. A carelessly drafted contract actually causes problems.
What is a distribution agreement?
In a distribution agreement, the distributor purchases products from the producer and resells them for his own account and risk. It is beneficial for both parties: the producer increases his sales, and the distributor builds up his own trade. The terms of the contract determine the relationship.
1. Exclusivity and territory
Clearly agree on whether the distributor is exclusive — only he may sell in a specific area — or not, and for which area and which products this applies. Lack of clarity on this leads to conflicts, for example if the producer sells in the same area himself or through others.
2. Duration and termination
Stipulate the duration, the notice period, and what happens upon termination: who takes over the remaining stock, how are outstanding orders settled, and is compensation applicable? A notice period that is too short or an unclear termination can lead to damage claims, especially if the distributor has invested.
3. Competition rules
Distribution agreements fall under competition law. Certain clauses are prohibited or risky, such as imposing fixed sales prices on the distributor or overly strict territorial protection. Keep the agreements within the rules for vertical agreements; otherwise, they are void and you risk fines.
Frequently Asked Questions
Am I allowed to impose a fixed selling price on my distributor?
No, imposing fixed or minimum selling prices (vertical price fixing) is in principle prohibited under competition law.
What do I need to arrange upon termination?
The notice period, the settlement of inventory and outstanding orders, and any compensation, especially if the distributor has invested.
Is exclusivity mandatory?
No, but clearly stipulate whether the distributor is exclusive and for which territory and which products, to avoid conflicts.
A watertight distribution agreement?
Our legal experts draft your distribution agreement or agency agreement . View our commercial lawteam or schedule a free consultation.
