When to conclude a distribution agreement?
A distribution agreement is concluded when you wish to distribute your products over a (larger) part of the market. The distribution of goods by a distributor helps you to broaden your network, for example if you are active in the Netherlands and decide that from now on you want to sell your products further in Europe. You can then seek a distributor who is familiar with the market in the desired sales area. If this distributor buys the products from you, he will subsequently resell the products at his own expense and risk. This will also save you transportation costs and you will no longer have the products in your own stock, which will reduce your business risk.
Why enter into a distribution agreement?
The distribution agreement is not regulated by law, which means that you can shape your distribution agreement at your own discretion. Nevertheless, it is recommended for entrepreneurs to have a distribution agreement drawn up, mainly because there is no legal basis. The distribution agreement determines, for example, which products are supplied and under what conditions this supply takes place. Price and payment agreements are also laid down in the distribution agreement. It often happens that suppliers try to impose fixed sales prices or minimum prices on their distributors, this is not allowed under Dutch law on competition. As a supplier, however, you may impose a maximum selling price on your distributor. The above and many other subjects such as, for example, retention of title, force majeure, advertising can be regulated in a distribution agreement.
In short, a supplier can set up his distribution relationship according to his own wishes. However, it is necessary to take into account a number of rules from which contractually no deviation can or may be made. Moreover, it is helpful if you can be sure that you can depend on a legal basis in the event that problems arise from the distribution relationship.
Please contact us
If you would like support in drawing up and negotiating a workable and legally clear distribution agreement or in the event of disputes about or termination of a distribution agreement, please feel free to contact us.