Distribution agreements generally apply to a specific “territory” in which the distributor will operate. Distributors will then sometimes look for certain protections from the supplier to ensure that other distributors do not invade this area. In this context, there are a number of types of distribution agreements. Selective distribution is the case when the supplier designates a distributor under a “selective distribution system” in which it appoints additional distributors only if they meet certain criteria. It is a unique system specifically used to allow the supplier to retain control of its distribution network, particularly with regard to quality control, while working with EU and UK competition rules. Selective distribution agreements are often used by luxury brands to ensure the maintenance of the quality of the product and the commercial will of the brand. Some of the rules for distribution agreements differ with respect to the application of a selective distribution model. Distribution agreements are fairly flexible documents and the following clauses are not exhaustive. However, when entering into distribution agreements, parties often have to take competition rules into account, as they often wish to include such provisions and safeguards in agreements. This can be problematic from a competitive point of view and some issues can be a real violation of the relevant legislation. We have looked at this in more detail below.
A. Subject to the terms of this exclusive distribution agreement, the supplier appoints the distributor, and the distributor accepts such a designation and undertakes to act as the exclusive distributor of supplier products (defined below) in the following geographical area (the “territory”): the supplier undertakes to make such descriptive literature available to the distributor (by email in pdf format). Promotional materials, technical manuals and promotional materials on supplier products as suppliers may be available from time to time for such purposes. The trader has the right to translate these materials into the languages of the territory at his own expense. The supplier reserves ownership of all property rights, including the intellectual property rights of the translated versions of the documents. The distributor is solely responsible for the accuracy of the translations and provides the supplier with a copy of each translated work. The distributor will review the materials immediately (at the distributor`s expense) after notification from the supplier. This agreement is governed in all respects by the laws of the state [state] , of the United States, which apply without reference to a rule of conflict of laws under which, otherwise, different laws might apply.