Agency & Distribution Agreements
When deciding to take your goods to market it is essential to make the distinction between an Agency and Distributor relationship. The type of relationship will determine the precise set of rules applied. In most cases the type of business, its goals and objectives will determine which of the two; either Agency or Distribution, will be the best.
These types of agreements are used where the distributor purchases goods from a supplier and then re-sells them. This is usually the case when a goods supplier has no market or country presence or representation. Distribution agreements between the supplier and the distributor are important in defining the terms between the two parties. The agreements will normally deal with the following:
- Responsibility for defective products
- Determination of the parties’ rights and duties
- Where the distributor can do business.
- The type of goods the distributor can sell.
- Selling competing products
- Minimum Purchase requirements
- Pricing of the products
- Insolvency of the agent/distributor
- Termination and limitation of liability
A business may wish to sell its products in a new market or country by using a network of agents who have good local knowledge. Agency Agreements are not the same as Distribution Agreements. These differences are highlighted below:
- An agent will get a commissions on the sale of the goods.
- The agent does not buy the goods. The agent sells them on behalf of the supplier.
- Agency agreements are subject to European Regulations. These give specific rights to an agent.
Cubism Law has an experienced commercial law team that can assist both supplies and agents, whilst also complying with the latest changes in European Law.
Please contact one of our specialist lawyers now.