What is distribution?
Distribution means that an independent entrepreneur (distributor) sells his client's products or services under his own name to customers. The distributor differs from an agent, who merely mediates in the conclusion of an agreement between the principal and the customer. The distribution agreement has no legal provisions of its own and therefore offers parties a great deal of freedom (more than, for example, the agency agreement). This freedom offers opportunities but also risks and both client and distributor would be wise to properly describe the boundaries of the assignment. This prevents disappointments that may lead to disputes. In any case, the following should be considered:
- The duration of the agreement;
- The scope of the work as well as the working area;
- The amount of the commission and the conditions under which the fee is payable;
- The possibilities of termination;
- The consequences of termination, including for the residual stock.
In consultation with the client and/or distributor, we advise on the structure of the agreement and draw it up for you. In this way, the client or distributor knows that his/her interests are properly safeguarded in the agreement. In the unlikely event of a dispute between the parties, we are ready to bring the situation to a favourable conclusion.