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Distribution agreements are often confused with Agency Agreements and it is important to ensure the correct contractual mechanism is used.
Distribution Agreements provide an advantage for suppliers seeking to promote and sell their products by utilising the ability of the distributor’s local market knowledge, contacts/customers and expertise in selling such products in the distributor's territory; this is particularly important if there are local language/customs to overcome.
From the distributor’s viewpoint, there is the incentive to be associated with a particular company’s products or brands, potentially on an exclusive basis within that territory.
At BakerLaw we have experience in advising and negotiating both suppliers and distributors of all sizes in many overseas territories concerning the establishment of formal supplier/distributor relationships.Issues for consideration should include supplier’s conditions of sale, price and payment review, minimum quantity supplies/sales, IPR protection and term/renewal/termination provisions.