A distribution agreement under Dutch law is a contract in which a supplier appoints a distributor to buy its products and resell them, in the distributor’s own name and for its own account, within an agreed territory. Dutch law has no separate statutory regime for it, so the contract wording governs. This page explains the types, the competition-law limits, the online-sales and cross-border rules, how to terminate one, and how it differs from agency. Our Dutch distribution agreement lawyers draft and review these contracts for domestic and international businesses.
What is a distribution agreement under Dutch law?
A distribution agreement is a contract in which a distributor buys products from a supplier and resells them on its own account and risk to customers in a defined territory. Unlike an agent, the distributor becomes the owner of the goods and earns a margin rather than a commission. Because Dutch law does not name this contract type, the parties are largely free to shape it, within the limits of reasonableness and fairness under article 6:248 of the Dutch Civil Code.
That freedom cuts both ways. It lets the parties shape the arrangement to fit their market, but it also means there is no statutory safety net to fall back on when the contract is silent. In a dispute, a Dutch court reads the agreement first and fills gaps with the general rules of contract law and the standard of reasonableness and fairness, not with a dedicated distribution statute, because none exists.
Is there a special statutory regime for distribution in the Netherlands?
No. A distribution agreement is an unnamed contract (onbenoemde overeenkomst): the Dutch Civil Code contains no dedicated title for it, so the general rules of contract law apply. This is a key difference from an agency agreement, which does have a statutory regime in articles 7:428 and following of the Dutch Civil Code. For distribution, the contract you sign is effectively the law between the parties, which is exactly why careful drafting matters so much.
What types of distribution agreements exist?
Dutch practice uses three main forms: exclusive, sole and selective distribution. In an exclusive agreement the supplier appoints one distributor for a territory and sells to no one else there. In a sole agreement the supplier keeps the right to sell directly alongside the distributor. In selective distribution the supplier picks distributors against set criteria, often used for premium or technical products.
| Form | Number of distributors | Supplier sells directly? | Typical use |
|---|---|---|---|
| Exclusive | One per territory | No | Distributor invests heavily in the market |
| Sole | One per territory | Yes | Supplier keeps key accounts |
| Selective | Several, meeting criteria | Often yes | Premium, luxury or technical goods |
Each form balances control against reach differently. Exclusivity gives the distributor security to invest in the market; selective distribution lets a supplier protect a brand’s positioning. The right choice depends on the product, the market and how much competition law allows, which is the next question to settle.
How does competition law limit a distribution agreement?
Distribution agreements are vertical agreements and must comply with competition law. Under article 101 of the Treaty on the Functioning of the European Union and the Dutch Competition Act (Mededingingswet), restrictions that limit competition are void unless they are covered by the EU Vertical Block Exemption Regulation (Regulation (EU) 2022/720), in force since 1 June 2022. So-called hardcore restrictions fall outside that exemption.
The block exemption applies where the market share of both the supplier and the distributor stays at or below 30%. In practice this means a supplier may not fix the distributor’s resale price (resale price maintenance) and may not grant absolute territorial protection that blocks all passive sales into another distributor’s territory. Exclusivity, minimum-purchase targets and selective criteria are generally allowed, but they should be checked against the block exemption before signing.
Can a distributor sell online and into other territories?
Under the Vertical Block Exemption Regulation a supplier may restrict a distributor’s active sales into a territory it has exclusively reserved for another distributor, but generally may not block passive sales, meaning unsolicited orders from customers there. A supplier also may not impose an outright ban on selling online, because that would prevent the distributor from using the internet effectively to reach customers.
This matters because a clause that looks like a routine territorial protection can turn into a hardcore restriction if it stops passive or online sales altogether. A distribution agreement should therefore separate what the supplier may steer (active marketing efforts) from what it may not close off (passive and online demand), so the exclusivity holds up under scrutiny.
What clauses should a distribution agreement contain?
A workable distribution agreement sets out the territory and whether it is exclusive, the products, pricing and margins, minimum-purchase or sales targets, intellectual-property and trademark use, confidentiality, the term, the notice period and grounds for termination, and the governing law and forum. Because there is no statutory fallback, a gap in the contract is a gap in your protection.
Two clauses deserve particular care: the termination regime, because Dutch case law can require more notice than the contract states, and the exclusivity and pricing terms, because these are where competition law bites. A short, well-drafted agreement that addresses both is worth more than a long one that ignores them.
What are minimum-purchase targets, and what happens if they are missed?
Many distribution agreements set a minimum quantity or value the distributor must buy each year, which is how a supplier keeps an exclusive distributor active. The contract decides the consequence of missing the target: often the supplier may withdraw exclusivity, convert the arrangement to non-exclusive, or terminate on that ground.
Because these consequences follow only from the wording, a target clause should state the figure, the measuring period and the exact remedy. A target without a stated consequence is difficult to enforce, and a consequence as severe as termination will still be read against the standard of reasonableness and fairness under article 6:248 of the Dutch Civil Code.
How does a distributor use the supplier’s trademarks?
A distributor needs the right to use the supplier’s brand and trademarks to advertise and resell the products, and the agreement should grant that right and set its limits. Once goods are put on the market within the European Economic Area by the trademark owner or with its consent, the owner’s trademark rights are exhausted, so it cannot use them to stop further resale of those goods.
The agreement should still define how the distributor may present the brand, whether it may use it in its own domain name or advertising, and what happens to that right when the contract ends. Clear trademark terms prevent both under-use, where the distributor cannot market effectively, and over-use, where the brand is stretched beyond what the supplier intended.
How can you terminate a distribution agreement?
A fixed-term agreement ends on its expiry date; an open-ended agreement can in principle be terminated by notice. Because there is no statutory notice period, Dutch Supreme Court case law holds that reasonableness and fairness (article 6:248 of the Dutch Civil Code) can require a sufficient notice period, and sometimes compensation, before an open-ended distribution agreement may be ended.
How much notice is reasonable depends on the circumstances: how long the relationship lasted, how dependent the distributor is, and what investments it made in the supplier’s products. A supplier that terminates too abruptly risks a damages claim, even where the contract seemed to allow the termination. A well-drafted notice clause reduces, but does not always remove, that risk. See our page on termination of a distribution agreement in the Netherlands.
How is a distribution agreement different from an agency agreement?
The difference lies in ownership and in statutory protection. A distributor buys the products and resells them on its own account, earning a margin; a commercial agent only brings about contracts for the principal and earns a commission, without taking ownership. Agency is a named contract with mandatory rules, including a goodwill payment on termination under article 7:442 of the Dutch Civil Code; distribution has no such statutory entitlement.
That distinction decides who bears the market risk, how the relationship can be ended, and whether a termination payment is owed. Choosing the wrong form, or drifting from one to the other in practice, creates exactly the disputes that are hardest to resolve. We explain this in more detail on the difference between distribution and agency under Dutch law.
Which law applies to an international distribution agreement?
Parties to a cross-border distribution agreement can choose the applicable law. If they make no choice, the Rome I Regulation (Regulation (EC) No 593/2008) applies within the EU, and for a distribution contract it points to the law of the country where the distributor has its habitual residence. A clear choice-of-law and forum clause avoids that default and the uncertainty around it.
Even with a foreign governing law, mandatory EU and Dutch competition rules still apply to conduct affecting the Dutch or EU market, so a choice of law does not switch off the block-exemption limits. International suppliers should align the governing law, the competition analysis and the language of the contract from the start.
What happens if a distribution dispute arises?
If one party fails to perform, the other can claim damages under article 6:74 of the Dutch Civil Code and, where the breach is serious enough, rescind the contract under article 6:265. Whether the dispute goes to mediation, arbitration or the Dutch courts depends on the dispute-resolution clause in the agreement, so that clause is worth agreeing before any conflict arises rather than after.
A practical example: ending a long-term exclusive distributor
Suppose a supplier has worked with an exclusive Dutch distributor for twelve years, and the distributor has built a sales team around the brand. The contract allows termination on three months’ notice, and the supplier gives exactly that. Because the relationship was long and the distributor’s investments were substantial, reasonableness and fairness under article 6:248 may require a materially longer notice period or compensation. The three-month clause does not settle the matter, and a court can award the distributor damages for the shortfall. Agreeing a realistic notice period at the outset would have avoided the dispute entirely.
Speak to a Dutch distribution lawyer
Whether you are appointing a distributor, negotiating exclusivity, or ending a relationship that no longer works, the wording of the agreement decides most of what follows. Our Dutch distribution lawyers draft and review distribution agreements, check them against competition law, and advise on termination and disputes. This work is part of our wider practice in Dutch distribution law and general collaboration agreements in the Netherlands. Contact us to review your distribution agreement.
Frequently asked questions about distribution agreements
Does Dutch law give a distributor a goodwill payment on termination?
Not automatically. The statutory goodwill payment of article 7:442 of the Dutch Civil Code applies to commercial agents, not distributors. A distributor may still claim compensation or damages where an open-ended agreement is terminated without a reasonable notice period, based on reasonableness and fairness.
Can a supplier set the resale price in a distribution agreement?
No. Fixing the distributor’s resale price (resale price maintenance) is a hardcore restriction under the EU Vertical Block Exemption Regulation (Regulation (EU) 2022/720) and article 101 TFEU. A supplier may recommend or set a maximum price, but not impose a fixed or minimum resale price.
Can a supplier stop a distributor from selling online?
No. Under the Vertical Block Exemption Regulation a supplier may not impose an outright ban on online sales, because that prevents effective use of the internet. It may set quality standards for how the products are sold online, but it cannot close the channel entirely.
How much notice must you give to end an open-ended distribution agreement?
There is no fixed statutory period. Dutch Supreme Court case law requires a reasonable notice period based on the duration of the relationship, the distributor’s dependence and its investments. A short contractual notice period can be set aside if it is unreasonable in the circumstances.
Which law applies to an international distribution agreement?
The law the parties choose. Without a choice, the Rome I Regulation (Regulation (EC) No 593/2008) applies the law of the country where the distributor has its habitual residence. Mandatory EU and Dutch competition rules apply regardless of the chosen law.
