[Distributorship Agreements]

by

Acknowledgement

I would take this opportunity to thank my research supervisor, family and friends for their support and guidance without which this research would not have been possible.

DECLARATION

I, [type your full first names and surname here], declare that the contents of this dissertation/thesis represent my own unaided work, and that the dissertation/thesis has not previously been submitted for academic examination towards any qualification. Furthermore, it represents my own opinions and not necessarily those of the University.

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Abstract

In this study, we try to explore the concept of Distributorship Agreements in a holistic context. The focus of the research is on advantages, disadvantages, and its relation with distributorship agreeement. The research also analyzes many aspects of different clauses and what they meanand tries to gauge its effect on distributorship agreeement. Finally, the research describes various factors, which are responsible for success and failure of distributorship agreeement, and tries to describe how to write a good distributorship agreement along with the examples of examples of good and bad agreements.

Table of Contents

ACKNOWLEDGEMENTII

DECLARATIONIII

ABSTRACTIV

CHAPTER 1: INTRODUCTION1

Background of the study1

Problem Statement2

Purpose of the study4

Significance of the Study4

Rationale/ Nature of the study4

CHAPTER 2: LITERATURE REVIEW6

CHAPTER 3: METHODOLOGY45

Research Design45

Literature Search45

Keywords46

CHAPTER 4: DISCUSSION AND ANALYSIS47

CHAPTER 5: CONCLUSION61

WORKS CITED64

Chapter 1: Introduction

Background of the study

Distributor agreements founded on the principle of equality between the distributor and the supplier survive longer than those where one partner is favored over another due to clever clauses, terms and conditions. (Craig: 166) Long living agreements are characterized as plain and balanced, while short living agreements are more likely to be classified as too clever and imbalanced. A sound distributor agreement need not be clever, but it must demonstrate a fairness that can be achieved only if it is balanced. (Van Beal: 133)

A distributorship arrangement involves the sale of products by the distributor in a third country, on his own account. The distributor contracts both with his supplier and with his customer. He becomes owner of the products concerned. He is not a representative of the principal. (Christou: 275)

In contrast, the agent represents the person appointing it in the foreign country. It will typically have authority to negotiate and conclude contracts on behalf of the person making the appointment (the principal). An agent is usually paid a commission on the basis of sales made.

An advantage of a distributor is that commercial agents are subject to mandatory rules under European Union law. These rules do not apply to distributors. These rules can be onerous and include obligations to pay compensation on termination of agency.

In the supplier-distributor relationship, the distributor and the supplier stand at arms length in a commercial relationship. Subject to certain competition law restrictions, they have considerable freedom to decide the terms and conditions of their relationship.

The supplier will have less control over the distributor's activities, than is the case with agency. The supplier cannot usually determine the pricing of products to the retailer's customers. The supplier is not liable for the distributor's actions. Because of the higher level of risk it ...