The answer to this question depends on the nature of the distribution used by the supplier. 8. Clearly identify the terms of sale and pricing issues. In principle, e-commerce sales made by non-distributor distributors cannot be limited by the supplier. However, the same rules apply to the allocation of customers (wholesale and retail trade) to exclusive distribution. A distribution contract is a commercial contract between a supplier of goods and a trader of goods. The supplier can be a manufacturer or reseller of the products. In the modern business world, more and more companies are participating in distribution agreements that cross international borders. According to the World Bank, international trade accounted for nearly one-third of U.S. gross domestic product (GPD) in 2017. Companies carrying out this type of cross-border activity need well-structured international distribution agreements.
Key Clauses of an International Distribution Agreement An international distribution agreement is essentially a contract that creates a framework for a business relationship between the global parties. In order to ensure efficient and effective transactions, an international distribution agreement should be comprehensive. Some of the main clauses that you typically find in an international distribution agreement include products and territories, obligations of the parties, exclusivity clauses, renewal/termination, and dispute resolution. Products and territory International distribution agreements usually include details about the specific products and the specific area covered by the contract. Commitments of the parties As with other commercial agreements, it is essential that an international distribution contract clearly defines the responsibilities of each party. The supplier and distributor must be clear about their obligations, which must be fulfilled in accordance with the conditions of the transaction. Exclusivity provisions Some international distribution agreements contain exclusivity clauses. While not all of these agreements are exclusive, they are a topic that should be addressed in contract negotiations. Extension/termination The contract should also define the duration of the business relationship. In addition, procedures should be put in place to address issues related to extension and termination. Dispute settlement Finally, distribution agreements should include provisions for dispute settlement. Regardless of the quality of the relationship between the supplier and the distributor, there is always a risk of litigation.
In the case of international business contracts, it is often advisable to introduce an arbitration clause. Arbitration offers many advantages over handling disputes in local law. Of course, this list is just a brief selection of the important contractual terms you`ll find in an international distribution agreement. Such agreements should always be tailored to the individual needs of each party. If your company is considering entering into an international sales contract, it is important that you seek professional advice. Since these are complex agreements, there are a number of unique problems to solve. I will ensure that the agreement is well drafted and protects the rights and business interests of your company. I often represent U.S.
clients doing business abroad and German-speaking clients doing business in the United States. If you have any questions about international distribution agreements, I will be at your disposal. To arrange an absolutely confidential consultation, please contact me today. Some distribution agreements simply require the distributor to devote its “best efforts” to selling the manufacturer`s product. The trader should object to such a provision on the basis of Bloor v. Falstaff, 601 F.2d 609 (2d Cir. . .