Distribution law, commercial agent, authorized dealer, representative

• Distribution structures

• Drafting and reviewing distribution contracts

The distribution of goods and services abroad requires a local presence. Companies that do not want to set up their own branches immediately need sales partners who know the markets. Such sales partners are sometimes only active on an occasional basis in return for a commission on a case-by-case basis. Companies maintain permanent sales relationships either with commercial agents (who broker business for the company in return for commission) or with authorized dealers (who purchase and pay for goods themselves in order to then sell them in the respective market on their own responsibility).

The drafting of contracts with commercial agents and authorized dealers abroad requires the utmost care. Local conditions must be taken into account. If there are no statements on the choice of law, the entrepreneur bears the risk of having to make high compensation or compensation payments at the end of the contract. In the worst-case scenario, the local sales partner may even be regarded as an employee of the entrepreneur, which entails high social security risks. However, informal agreements with occasional sales partners are also treacherous. A relationship almost always develops in which the distribution partner can suddenly and unexpectedly claim to be the exclusive permanent distribution partner for the country in question by presenting e-mail correspondence, issued confirmations, etc.

When structuring distribution systems, i.e. a network of different distributors or sales representatives, antitrust regulations in particular must be observed. There are interesting structuring options here in which you can give the authorized dealers and commercial agents precise specifications for sales. VOELKER will be happy to advise you here.