Key Issues in International Distribution Agreements


International sale of goods is for the most part conducted as continued sale between contractual partners, based on the distribution agreement, wherein the supplier and the distributor provide for a series of obligations in order that the distributor may be included into the supplier’s sales net-work, while selling the goods in the contract territory in his own name and for his own account. The distribution agreement, as a sui generis contract in international trade law, is subject to serious restrictions imposed by the right of competition applicable to the state in whose territory the acts and actions related to the performance of the distribution agreement are carried out. Bearing in mind that the distributor, in the performance of his duties, develops the business reputation of the con-tract goods, it is important to address the issue of the consideration for the business reputation once the distribution agreement terminates. Drawing a distinction between the distribution agreement as a framework contract and the sales contracts as specific contracts which are concluded in the course of performance of the distribution agreement, is also important for determining the issue of applicability of the Vienna Convention on International Sale of Goods, which applies to individual con-tracts for the international sale of goods, but is not applied as a rule in case of the framework inter-national distribution agreement.

Key words: Distribution agreement, Consideration of the business reputation, Competition restrictions, Vienna Convention on International sale of goods

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Translation: Vojislava Katić

Ljubica Tomić

Attorney at Law | Managing Partner