Distribution Agreement Germany
29. Dezember 2021
Distribution Agreement Germany: What You Need to Know
If you are planning on expanding your business to Germany, it’s important to understand the legal requirements and regulations that come with distributing your products in this country. One of the necessary steps in doing so is by entering into a distribution agreement with a German distribution partner. But what exactly is a distribution agreement Germany and what should you know before entering into one?
What is a Distribution Agreement?
A distribution agreement is a legal contract between the manufacturer of the product and the distributor who sells the product to the end user. The agreement outlines the terms and conditions that both parties must abide by, including the price of the product, the sales territories, the duration of the agreement, and any exclusivity or non-compete clauses that may apply.
Why is a Distribution Agreement Important?
A distribution agreement provides clarity and security for both the manufacturer and the distributor. The manufacturer can ensure that their products are being distributed in a manner that meets their brand standards and objectives. Meanwhile, the distributor can rely on the manufacturer to provide the necessary support and resources to successfully distribute the product in their territory.
What are the Legal Requirements for a Distribution Agreement in Germany?
In Germany, distribution agreements are regulated by the German Civil Code (Bürgerliches Gesetzbuch or BGB) and the Act Against Restraints of Competition (Gesetz gegen Wettbewerbsbeschränkungen or GWB). These laws require that distribution agreements are in writing, clearly define the terms and conditions, and do not violate any competition laws.
Additionally, it’s important to note that the distribution agreement must be written in German as it is the official language of the country. If the contract is written in a foreign language, it must be accompanied by a German translation.
Tips for Entering a Distribution Agreement in Germany
Before entering into a distribution agreement in Germany, it’s important to do your due diligence and consider the following tips:
1. Choose the Right Partner: It’s important to choose a distributor who has experience in your industry and has a successful track record of distributing similar products.
2. Clearly Define the Sales Territory: Be specific about the sales territory and ensure that it does not overlap with any existing distributors in the area.
3. Establish Sales Targets and Goals: Define sales targets and goals that both parties can agree on.
4. Protect Your Intellectual Property: Include clauses that protect your intellectual property and brand.
5. Review Competition Laws: Ensure that the agreement does not violate any competition laws.
6. Seek Legal Advice: Consider seeking legal advice from a German attorney who specializes in distribution agreements.
In conclusion, a distribution agreement is a necessary step when expanding your business to Germany. By understanding the legal requirements and regulations, and following these tips, you can ensure a successful and mutually beneficial partnership with your German distributor.