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Our law firm Navas & Cusí with offices in Madrid and Barcelona has a multidisciplinary character and with an international vocation (based in Brussels), specializes in banking, financial and commercial law.
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The distribution agreement is a fundamental pillar in the business world, especially in the field of marketing products and services. This legal agreement establishes the basis for a fruitful collaboration between a supplier and a distributor, defining the responsibilities and rights of both parties. In this article, we will delve into the most relevant aspects that are usually part of these contracts, highlighting their importance and relevance in the commercial dynamics, especially the customer transfer clause.

Obligations and clauses

The obligations of both the distributor and the supplier are essential for the smooth functioning of the commercial relationship. The distributor undertakes to pay for goods or services as agreed, to purchase a set minimum of products, to report defects and to respect the confidentiality of shared information. On the other hand, the supplier must guarantee the timely delivery of the goods, provide samples for promotion, train the distributor in marketing strategies and ensure exclusivity in the distribution relationship.

On the other hand, the exclusivity clause in the distribution contract is relevant. This can be a crucial element in the contract, and can be manifested in two ways: by assigning a specific territory where the distributor has sales exclusivity or by designating the distributor as the only one authorized to market the products of a given supplier. This clause protects the interests of both the supplier and the distributor, establishing a clear framework for collaboration.

The protection of intellectual and industrial property rights is a very relevant aspect of any commercial contract. It is essential that the supplier is recognized as the holder of these rights and that the trademarks and intellectual property associated with the products or services distributed are properly registered. This ensures the legal protection of intellectual property and avoids possible legal disputes in the future.

In addition to the fulfillment of obligations, it is important to clearly state the conditions for termination of the contract. This may include a notice period to indicate the intention to terminate or not to renew the agreement, restitution of unsold goods and payment of outstanding amounts. These provisions provide legal certainty and avoid misunderstandings in the event of termination of the business relationship.

About the Customer Transfer Clause

One of the most strategic clauses in a distribution contract is the “customer transfer” clause. This provision allows for a transition of customer management between the distributor and the supplier. When certain parameters are met, such as sales targets or specific conditions, the supplier can directly take over the distribution to the customers previously served by the intermediary distributor, as well as enter into the

The main purpose is to establish a clear framework for the distribution of goods and services to the third party customer, maximizing its profits and providing greater security in the commercial relationship with customers.

Its main purpose is to establish a clear framework for this process, being activated when certain criteria are met, such as specific sales goals or previously agreed conditions.

There are several scenarios where this clause can be effectively applied. In the context of a change in the business relationship, if a distributor has been selling a supplier’s products or services for a certain period of time and meets certain objectives, such as reaching certain sales figures or expanding geographically, this clause allows the supplier to take over the direct management of the customers previously served by the distributor.

Likewise, in the case of franchises, this clause may come into play when a franchisee decides to sell its business or terminate its relationship with the franchise. If the agreed conditions are met, the franchisee’s customers may be handled directly by the franchisor.

A well-drafted distribution contract is essential to establish a successful collaboration between suppliers and distributors. The above-mentioned clauses are essential to protect the interests of both parties and secure the business relationship.

In the complexity of the business environment, expert legal advice is essential to ensure the success and protection of your interests. From our offices in Madrid and Barcelona, Navas&Cusí provides the experience of a commercial law attorney ready to face the legal challenges of commercial agreements such as the distribution contract. Our team is prepared to offer customized and effective solutions, ensuring that your commercial operations and distribution agreements are properly supported. Find out how we can help you in this crucial aspect of your commercial activity.

Navas & Cusí Abogados
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