What Is Distributorship Agreement

A distribution contract is a commercial contract between a supplier of goods and a distributor of goods. The supplier may be a manufacturer or reseller of the products. We also find that some of our customers inadvertently circumvent their agreements between distributors, which means that two different distributors are exclusive in the same region, which can lead a supplier to immediately violate both agreements. Some international distribution agreements contain exclusivity clauses. While not all of these agreements are exclusive, this is an issue that should be addressed in the treaty negotiations. Should you discuss what happens when another company buys the manufacturer or distributor? In one case, for example, a trader was transporting a line of agricultural products from a producer who only made agricultural products. The dealer also sold tractors from another manufacturer. A large multinational company, which also manufactured a number of tractors, acquired the agricultural products manufacturer. The company then said it wanted its distributors to run a „complete line,“ including tractors.

This situation is often difficult to manage in advance in a distribution company, but this case highlights one of the things that can happen to create a dispute. The end result was that the manufacturer terminated the distributor because it did not treat a „complete line.“ The distributor complained of different theories and lost on each of them. (see Smith Machinery Company, Inc. v. Hesston Corporation, 878 F.2d 1290 (10. Cir. 1989) and Continental TV v. GTE Sylvania, Inc., 433 U.S. 36 (1977).) Distributors, such as retailers or value-added resellers (VARs), purchase products from merchants who then sell them to their end customers. In the merchant-distributor relationship, the distributor acts as an intermediary between a supplier and a distributor. This relationship therefore requires a contractual agreement different from the one described above.

As a first comment, we must keep in mind that the overwhelming majority of all disputes in the context of distribution will arise if the manufacturer wants to end the relationship against the will of the distributor.