Guide To Drafting International Distributorship Agreements

Ordering from a distributor carries significant inherent risks. Organizing the distribution agreement can help reduce these risks and realize the potential benefits of your relationship. The ICC Model Contract “Selective Distribution” is intended for the marketing of products through a network of qualified retailers. Selective distribution agreements allow the exporter to better control the way in which its products are marketed by establishing a direct link between the exporter and the retailers who sell its products to the final consumer. 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. Limitation of Liability: In most jurisdictions, liability for damages caused by the use of products rests with the manufacturer. Some agreements attempt to transfer this responsibility to the dealer, but if tested by the courts, they are unlikely to apply. Therefore, the right way to address liability risk is to put in place an effective indemnification mechanism that limits the scope of your liability. Such a mechanism should limit your liability, both in terms of amount and time, and be covered by adequate insurance coverage. There are different models of international distribution contracts concluded by different companies and organizations whose purpose is to facilitate negotiations and agreements between suppliers and distributors.

On the International Contracts website you will find a balanced model that complies with the rules applicable to the distribution of products in certain countries, in particular in the European Union. 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 organising distribution in the country where they operate. This new revised version takes into account the latest developments in the distribution laws. It contains a USB stick that contains the full text of the model and its annexes, so you can easily adapt the contract to your specific case. If the parties do not need to create their own special contract, they can use the entire model that has been designed to ensure balance for both parties.

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