Distribution Agreement Review

Distribution agreements are an integral instrument for establishing a relationship between a distributor and a supplier. A well-written agreement can help develop this relationship. The agreement cannot extend the duration of a relationship as soon as the relationship expires. A poorly written agreement often leads to litigation which, in turn, consumes management time, financial resources and the involvement of lawyers, courts and arbitration tribunals. A well-written agreement can eliminate the cost of resources from these unproductive activities and encourage the distributor and manufacturer to continue their respective activities at the end of the relationship. The Competition Council has developed the “Guide to Vertical Agreements” for public debates to help companies which, on a case-by-case basis, must assess the compatibility of the vertical agreements they wish to (…) A well-written distribution agreement clearly sets out the agreement reached by the parties from the outset and should therefore reduce the risk of a future dispute. For any further assistance in the preparation or revision of a sales contract, please contact one of our sales teams: Facts and Procedures. In April 2007, the American company Stanley Assembly Technologies (SAT), a company of the Stanley Black and Decker group, and the Spanish company Euro Herramientas (EH) signed a contract for the distribution of Stanley products in Spain and Portugal for a period of one year, (…) If a lawyer (not an experienced sales manager) verifies a contract, the resulting document may be legally acceptable, but commercially ineffective. If an experienced sales manager (not a lawyer) verifies a contract, the resulting agreement may be economically effective, but legally unacceptable. If a distribution professional and a lawyer check the contract, the likelihood of a legal battle decreases significantly in the event of termination.

Rule: Have a lawyer and distribution professional check the next distribution agreement before popping the gold pencils and champagne. Distribution agreements can cover some rather complex interactions and highlight many different legal issues. Some common legal issues related to distribution agreements can be: the termination phase of a representation agreement is probably the most important. The parties must understand how to denounce the agreement and under what conditions their partners can terminate the agreement. The terms of termination are often the core that drives a party to claim. Allegations of illegal termination are a common issue when distribution partners raise their issues in court. On 25 June 2020, the Federal Cartel Office (“BSR”) approved Intersport`s online sales model via a common online platform under the umbrella brand Intersport for small retailers. .

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