Distribution Agreement Warranty

A preliminary analysis and a complete understanding (both legal and commercial) of the identity of the intended distributor are of great importance. First, the distributor could be a link in a larger distribution chain; Distributor owners may operate directly or through related/related companies in other jurisdictions and markets. Consideration should be given to the distributor`s financial strength and technical capabilities in the relevant field and field. The number of years the distributor has worked in the territory and its past performance should generally be examined in the course of its activities with the producer/supplier`s direct competitors. The agreement can thus, after receiving a complete picture of the dynamics of the potential distributor, put in place legal mechanisms to respond to the way in which the distributor is likely to operate in the relationship with the current producer/supplier. In this way, an image of the operating methods of the distributor and that of its owners can also be created and duly processed as part of the agreement. It is both important and usual to define the dispute resolution mechanism that governs the conduct of parties in the event of litigation in a producer-supplier distribution relationship case. There are many mechanisms that can be included in the allocation agreement, but the best way to proceed would be to determine which mechanism is best for the parties with respect to their relationships. For example, in some cases, it would be fair to determine a neutral arbitration procedure within a well-known institution, conducted in a “foreign” country for both parties, in accordance with the law in that country.

In other cases, it is best to define the manufacturer`s country and its laws as an exclusive forum and right. Another possibility is to determine that the legal proceedings will take place in the defendant`s country of residence in accordance with his laws. Whether the distribution rights are exclusive or not, the achievement of performance targets, i.e. actual sales on the time line during the period of cooperation between the parties, seems to be decisive in verifying the distributor`s performance. Thus, the introduction of recognized (but creative) legal mechanisms allows the distributor to properly construct and exploit the market in question (e.g.B. an additional period during which exclusivity does not depend on a minimum) and, on the other hand, the manufacturer/supplier, in the form of a partial or total loss of the market due to the distributor`s inability to operate in that market (e.g.B.

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