There are various forms of distribution agreements, such as franchising agreements, selective or exclusive distribution contracts. Moreover, their respective definitions may not be the same in all countries.
This paper will focus on situations where an independent distributor buys products from a supplier to resell them to its own customers.
The applicable legal framework for the contract will be determined based on the law chosen by the parties
As a basic principle, the parties are free to choose applicable law for a distribution contract in the European Union (EU), pursuant to the provisions of Article 3.1 of so-called “Rome I” Regulation of 17 June 2008.
In the absence of any choice of law, Article 4.1 f) of the abovementioned regulation provides that applicable law is the law of the State where the distributor has its habitual residence – subject to some exceptions.
Outside the EU, the parties are likewise free to choose their applicable law, subject to public policy provisions in force in each relevant country.
Choosing applicable law is a crucial step with major implications. It is therefore essential to thoroughly check the provisions of the law considered for application to the contract.
Read more on the international eurojuris site here