A distribution agreement is a long-term commercial contract under which the supplier undertakes to supply certain products or services to the distributor, who in turn undertakes the marketing and distribution of those products by reselling them to third parties for his own account and risk. Common clauses in a distribution agreement include a non-compete clause, which prohibits the distributor from selling or assisting in the sale of competing products, and a forum selection clause, which determines which court has jurisdiction in the event of a dispute. In addition, a distribution agreement may contain provisions relating to the duration of the agreement, the possibility of renewal and the conditions for renewal. The importer may also provide assistance, support and control to the dealers, which may result in a complex set of rules and regulations giving the importer extensive control over the sales and service process. Our Dutch contract lawyer in the Netherlands has an extensive experience in drafting distribution contracts, dealing with disputes between parties regarding (the termination of) a distribution agreement in the Netherlands and will be happy to help you in the Netherlands.
An agency and distribution contract under Dutch law play and important role in many business model and help organisations to maximise their opportunities and manage their risk. It is important to be aware of the difference between an agent and a distributor before entering into any arrangement. An agent concludes sales in the name of your company and is paid commission on these sales, whereas a distributor purchases goods from you and then sells these on in its own name to the end user. Our distribution agreement lawyer in the Netherlands will explain more about the Dutch distribution agreement.
Distribution agreement in the Netherlands
Our experienced lawyers in the Netherlands are happy to advice you about distribution disputes in the Netherlands. A written distribution contract plays an important role in many business models between a manufacturer and distributor and helps the parties involved to maximize their opportunities and manage their risk. Not every collaboration turned out to be the best one. Our Dutch lawyers in the Netherlands regularly handle distribution disputes in the Netherlands relating to: the wrongful termination of the distribution contract, selling outside a permitted geographic area, the breach of confidentiality obligation, the misuse of IP rights, setting up a competing business or the misrepresentation by one party. Whatever the circumstances of the dispute, our Dutch law firm in the Netherlands can be of assistance. We have the experience and skills about Dutch distribution law that you require. Feel free to contact one of our Dutch litigators in the Netherlands for more information.
Drawing up a Dutch distribution agreement
As a foreign supplier, you may be in business contact with Dutch distributors, which may result in you being subject to Dutch law in the event of a dispute. It is important to note that there are important differences between the English or foreign legal rules and Dutch legal rules on distribution contracts.
Our tip: Seek advice from one of our Dutch contract lawyers specializing in distribution agreements when concluding a distribution agreement with a Dutch contractual partner.
Goodwill compensation under Dutch law
WHAT CLAUSES BELONG IN A Dutch DISTRIBUTION AGREEMENT?
One of the contractual partners can be any type of distributor. A distribution agreement is often a framework agreement under which the individual sales agreements hang. It is a continuing obligation for a longer-term cooperation, but these are not regulated separately by law in the Netherlands. Therefore, there are different variants of distribution agreements. Basically, such a distribution agreement regulates the cooperation between a manufacturing company and a distribution partner. These include, among others:
o Information on the contracting parties,
o Descriptions of the products or services to be distributed;
o Details of the specific tasks of both parties;
o Agreements on all financial aspects, such as commission settlement (discount amount on purchase prices, royalties), the payment deadlines and the modalities of settlement;
o Definition of operations requiring consent;
o Regulations in the event of disagreements and in cases of conflict;
o Regulations on issues of territorial protection (exclusivity vs. non-exclusivity, spatial limitation of the distribution area (countries), portfolio of products to be distributed (often in annexes);
o Agreements on how to proceed, for example, in acquisition, marketing measures and the formulation of contracts with customers;
o Agreements on training measures for sales staff;
o Information on the term and the termination modalities; and
o Restrictions of competition during the term of the contract: in particular post-contractual restrictions of competition.
TERM OF A DISTRIBUTION AGREEMENT in the Netherlands
The distribution contract in the Netherlands sets out the main agreements between the supplier and the distributor. The term of a distribution agreement in the Netherlands must be written down in the underlying contract. For example, the parties agree on the duration of the distribution relationship (whether limited or unlimited) or whether the distributor is only entitled to distribute within a certain contract territory (e.g. the Netherlands, Benelux or Europe). In some cases, an import contract is also part of the distribution contract. It is advisable to properly determine the duration of a distribution agreement. When a discussion about a distribution agreement arises, it is often about the notice period within which an agreement will be terminated. This often goes hand in hand with the question of whether additional damages are to be paid. You should seek advice from a Dutch lawyer in this regard.
TERMINATION OF A DISTRIBUTION AGREEMENT in the Netherlands
In the distribution contract under Dutch law you regulate the period and in which way the contract can be terminated. The period of notice can also be specified in the distribution contract. If a fixed-term distribution agreement has been concluded (e.g. with a term of two years), we can advise you on your legal options to part with your Dutch contract partner earlier. If, on the other hand, you conclude a distribution agreement in the Netherlands for an indefinite period of time, it can generally be terminated at any time. The period within which the distribution contract can be terminated depends on the circumstances of the individual case, such as the duration of the distribution contract. In some cases, however, there must be serious reasons for an effective termination of a distribution agreement under Dutch law. There is a lot of Dutch case law on this subject and the Dutch lawyers at MAAK Advocaten will be happy to assist you in implementing a legally effective termination that is suitable for your case.
TERMINATION OF A DISTRIBUTION contract under Dutch law
It is advisable to seek advice from a specialized Dutch lawyer if you wish to terminate a distribution agreement with your Dutch contractual partner, especially if Dutch law applies. Your Dutch lawyer can assist you and inform you about all aspects that need to be considered when terminating a distribution agreement. In addition, your lawyer can ensure that you carry out the termination of a distribution contract under Dutch law in a legally effective manner and that all formalities are observed. Of course, we are also happy to help you if you are confronted with the termination of a distribution agreement and your company could suffer serious damage as a result. All circumstances of the individual case play a role in the question of whether the termination is really legally effective (case law: SMQ / Goglio). It may be, for example, that a longer notice period must be observed or that there must be a serious reason for termination. In the unlikely event that your case goes to civil proceedings (main proceedings or interim relief), the court will assess the legal validity of the termination on the basis of its reasonableness and fairness. This may be accompanied by a claim for compensation.
DUTCH LAWYER SPECIALIzED IN DISTRIBUTION LAW
Remko Roosjen is a Dutch distribution law attorney and creates close working relationships with clients, providing pragmatic solutions across on all Dutch distribution law matters in the Netherlands. Remko is a co-founder of our Dutch Law Firm in Amsterdam. His specialist areas include the legal challenges when terminating a Dutch distribution agreement, (international) Commercial Disputes & Contracts, including civil litigation, arbitration and mediation. Remko is a sharp, creative attorney with extensive experience representing both plaintiffs and defendants. Visit Remko’s profile via the website or via his LinkedIn Profile.