Global Distribution 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. In the modern business world, more and more companies are participating in distribution agreements that transcend international borders. According to the World Bank, international trade accounted for nearly a third of U.S. gross domestic product (DPG) in 2017. Companies active in this type of cross-border activity need well-structured international distribution agreements. Key Clauses in an International Distribution Agreement An international distribution agreement is essentially a contract that establishes a framework for a business relationship between the global parties. In order to ensure efficient and efficient transactions, an international distribution agreement should be comprehensive. Among other things, some of the key clauses you will usually find in an international distribution contract include products and territory, the obligations of the parties, exclusivity clauses, prorogation/rescission and dispute resolution.

Products and territory As a starting point, international distribution agreements will generally include information on specific products and the specific area covered by the contract. Parties` obligations Like other trade agreements, it is imperative that an international distribution contract clearly specify the responsibilities of each party. Both the supplier and the distributor must have clarity on their obligations that must be met under the terms of the transaction. Exclusive provisions 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. Renewal/rescission The contract should also determine the duration of the business relationship. In addition, procedures should be put in place to address renewal and shutdown issues. Dispute Resolution Finally, distribution agreements should contain dispute resolution provisions. Whatever the right relationship between the supplier and the distributor, there is always a risk of litigation.

In the case of international business contracts, it is often advisable to include an arbitration clause.

Please contact the office if you require a paper copy of any of these documents.

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