INTERNATIONAL DISTRIBUTION CONTRACT
The International Distribution Contract is the most frequently used means for organising the distribution of goods in a foreign country. Almost every company engaged in international trade has at least some distributors abroad, which means that most exporters (whether large of small) must face the problem of drafting and International Distribution Contract.
The distributor is not a simply reseller: it is linked to the supplier by a closer tie. In particular de following characteristics should be noted:
a) in its capacity as reseller, the distributor deals with promotions and/or organisation of distribution in the assigned territory;
b) the supplier confers a privileged position in the territory on the distributor: generally the exclusive right to purchase the products from the supplier;
c) the relationship must be for a certain duration and sets conditions for collaboration that, by definition, cannot be episodic;
d) the relationship creates a fairly close tie of loyalty between the parties, which usually implies that the distributor refrains from distributing competig products;
e) the distributor is virtually always distributing brand-new products.
Since the International Distribution Contract implies by definition that the parties conclude sales contracts between them, they need to agree on certain points relating to their seller-purchase relationship: prices, conditions of payment, warranties, etc. This is normally dealt with by making reference to the general conditions of sale of one of the parties (generally those of the supplier). However, the parties may wish to determine certain aspects of the sales contracts within the distribution contract itself, particularly with reference to points which require special rules when the buyer is a distributor (e.g. prices and/or accounts; conditions of payment). In this case, the especial rules contained in the distribution contract will prevail in the event of conflict with the general conditions of sale.