If you are wondering if it is really worthwhile to convert a verbal agreement which you have had with your distributor or your manufacturer for years to a contract or you have just begun a new distributorship or agency, the reply is absolutely YES. A long and fruitful business relationship is based on clear agreements which prevent future conflicts of interest and even more so for international business.
¡Do yourself a favor and have a good contract in your life and business!
We take care of
We will advice you on all legal relevant aspects of this type of mercantile contract to build a soldid and stable business relationship with manufacturers and agents, distributors or intermediaries:
- We will explain the difference between distribution, agency and commission contracts for you to decide which best suits your business.
- We will review the legal implications for your business of the principal agreements in the contract most suited for your needs, such as duration, exclusivity, territory, conditions of re-sale, minimum sales, etc.
- We will custom-design the sensitive clauses such as non-complete, clientele compensation, liquidation of stock, etc. This is the heart of your contract and requires special attention.
- If the relationship is international, you will be supported by an English-Spanish bilingual team of lawyers with experience in international commercial contact, so that the language will not pose an obstacle between your business and your international ambitions.
If you already have a business relationship for distribution, agency or commission for years, written or verbal, we can also help you if a conflict of interest arises or to determine the conditions for termination if the moment comes to end the relationship:
- Our expert lawyer will analyze the relevant agreements of the contract in question.
- We advise you on the legal possibilities available, adapted to your particular case.
- We will support you in the negotiation of the terms for the resolution of conflicts or termination of the contract.
- We will document the agreements reached in a document.
- If it is not possible to resolve the conflict of interest raised, we will assist you in the court procedure necessary for final resolution of the problem.
Queremos ayudarte a que te decidas a dar este importante paso para tu negocio y para ello hemos diseñado un listado de preguntas importantes que te puedes descargar gratuitamente en el PDF de más abajo y que te ayudarán a dar forma al tipo de contrato que mejor se adapta a tu negocio.
¡Estamos a tu disposición, no dudes en consultarnos!
What is the difference between a distribution and agency agreement?
The main difference between the two contracts is that in the distribution agreement the distributor buys the products of the principal or manufacturer and assumes the resale of the same at his own risk, remuneration being the difference between the purchase price and the resale price. On the other hand, in the agency contract, the agent always acts on behalf of the principal or manufacturer without assuming the risk of sale transactions, remuneration being the commissions on sales.
Can I get compensation for clientele?
This is undoubtedly one of the most sensitive issues in any distribution or agency relationship. The reality is that it is a matter that is highly recommended to agree in advance and translate into the distribution contract or agency to prevent unnecessary conflicts later on. In the case of the distribution contract, since there is no specific legislation, it is for the parties to agree on compensation, with the requirements and limits established therein, and to agree that there is no compensation for the distributor at the end of the business relationship.
However, if nothing is agreed, the Law on Agency Contract of 1992 is applied by analogy and if the distributor meets the requirements to receive compensation, the principal will be obliged to pay. In the case of an agency contract, compensation for customers is mandatory for the principal, whether there is a written contract or not, provided that the requirements established in the mentioned law are met.
What are the requirements to receive compensation for clientele?
The indemnification for clientele is forthcoming when the activity of the agent or distributor generates a clientele that upon termination of the contract will be beneficial to the manufacturer and also:
– When the degree of integration of the agent or distributor in the manufacturer’s network is intense,
– When the agent or distributor has created clientele, that is to say, increased the clientele or increased the operations as a direct consequence of its activity and
– When the clientele is of use to the principal.
How is compensation for clientele calculated?
Compensation may in no case exceed the average annual amount of the remuneration received by the agent or distributor during the last five years or, for the entire duration of the contract, if the latter is lower. In certain cases, compensation can also be claimed for investments, for stock, for damages, which requires the study of the case or contract by our expert lawyer.
For over ten years Elizabeth Powers and Powers Abogados have counseled Sales Force Europe, from the company´s inception in Spain – and Europe – to this day. She has drafted all our framework agency agreements, reviewed contracts and modifications proposed by clients through to advice on termination of agreements, all in a timely, clear, considerate and cost-effective manner. It has been very beneficial for the company to work with a Spanish attorney in English, with an always-available U.S. law firm mentality.
Rick Pizzoli – CEO, Sales Force Europe, S.L. – Madrid