Distribution contracts are one of the most widely used means of organizing the distribution of goods abroad. Almost all companies active in international trade have a few distributors abroad, which means that at some point most exporters will be faced with the development of an international distribution agreement. But one of the difficulties faced by traders in drawing up contracts is the lack of uniform rules. This means that the parties must first refer to the rules laid down in their agreements, which, in turn, makes it essential to draw up such contracts thoroughly. An international distribution agreement is essentially a contract that creates a framework for a business relationship between the global parties. In order to ensure efficient and effective transactions, an international distribution agreement should be comprehensive. The starting point of international distribution agreements will usually be the detail of the specific products and the specific area covered by the contract. The best distribution agreements allow for termination of the business and termination for convenience. If an agreement allows termination for convenience, a partner who wishes to detach from the agreement gives the other partner 30 days` notice. If the convenience clause is invoked, it is not necessary to argue the cause and responsibility of the cause. Most importantly, the distribution contract doesn`t end in a legal skirmish. In the absence of a legal confrontation, distributors and manufacturers can focus on their respective customers and businesses, without using management time, corporate concentration and financial resources for lawyers, courts and arbitration proceedings.
Some of the main clauses that you typically find in an international distribution agreement include products and territories, obligations of the parties, exclusivity clauses, renewal/termination, and dispute resolution. How can an inexperienced party to distribution agreements improve the conditions of competition during negotiations? There are several methods: first, ask the dealer association in your industry for a standard agreement. Many distribution associations offer a free or low-cost standard agreement for their members (National Electronic Distributors Association, Material Handling Equipment Distributors Association, etc.). The template is a good basis for comparing the agreement you are supposed to sign. To meet these needs, ICC has published a revised set of its uniform contractual rules, the ICC Model Distributorship Contract. The rules apply to agreements under which distributors act either as buyers and resellers or as importers who organise distribution in the country where they operate. The ICC Model Distribution Agreement provides a single contractual framework that takes into account the prevailing practice of international trade. It applies in particular to agreements under which distributors act either as buyers and resellers or as importers who organise distribution in the country where they operate. .