Some international distribution agreements contain exclusivity clauses. While not all of these agreements are exclusive, this is an issue that should be addressed in the treaty negotiations. At present, no one knows how quickly the UK will start to deviate from EU legislation or what legislation introduced by the EU will be a priority for the change of the British government. In the end, there has never been a more important time to obtain specialized business advice on existing and planned agency and distribution agreements. For example, in the case of AMB Imballaggi Plastici SRL/Pacflex (1999), Pacflex asserted that trade between the two parties was done under a commercial agency contract. They therefore considered that they were entitled to compensation under the termination of that contract. However, the Tribunal found that the trade was conducted on the basis of sale and resale and that it presented a mark to end-users. This cast doubt on whether the agreement was really an agency and not a distribution company. The termination clauses are also concerned with the question of whether the agreement is subject to the 1993 trade agents` rules. If it is a trap, termination rights and rights can be dictated by these regulations. A distribution agreement has similarities to an agency agreement. However, the main difference is that the distributor enters into the contract with the end user (customer) in its own name and the manufacturer is not involved, unless the warranty or liability of the product is established. The EU directive is implemented in slightly different ways at EU level.
Although it is not possible to oppose the directive, the parties may agree that the laws of a state other than the United Kingdom are applicable in the EEA. This could mean that the agreement would be subject to another version of the directive. The rules governing laws and legal orders are incredibly complex and it is not possible to summarize here the effects of such an agreement between the parties. If your company is considering an international distribution agreement, it is important that you take professional advice. Below, you will find a checklist of factors to consider when developing a distribution contract: inexperienced parties with distribution contracts sometimes try to minimize the possibility of termination. The requirement for an annual termination and a semi-automatic extension is a routine procedure among experienced players. In these cases, the agreement provides for a provision requiring termination of the contract at the end of the first full calendar year after the agreement enters into force and each year after the agreement enters into force.