Commission Distribution Agreement Template for Germany

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Key Requirements PROMPT example:

Commission Distribution Agreement

I need a Commission Distribution Agreement for appointing an exclusive distributor in Southern Germany for our industrial machinery products, with a minimum annual sales target of €2M and a graduated commission structure starting from 15%, to commence from March 1, 2025.

Document background

The Commission Distribution Agreement is a vital commercial contract used when a company (principal) wishes to expand its market presence through a distributor who sells products on a commission basis rather than through traditional buy-sell arrangements. This agreement type is particularly common in German business practice and is governed by German law, specifically the Handelsgesetzbuch (HGB) provisions on commercial agency and commission business. The document outlines the appointment terms, territory rights, commission structures, performance expectations, and reporting requirements. It includes specific provisions required under German law regarding termination notice periods and potential compensation claims (Ausgleichsanspruch). The agreement is designed to protect both parties' interests while ensuring compliance with German commercial law and EU competition regulations.

Suggested Sections

1. Parties: Identification of the principal and commission distributor with full legal names and addresses

2. Background: Context of the agreement and brief description of the parties' business relationship

3. Definitions: Definitions of key terms used throughout the agreement

4. Appointment and Territory: Scope of appointment, territory definition, and exclusivity provisions

5. Commission Distributor's Rights and Obligations: Detailed responsibilities including sales promotion, customer service, and reporting requirements

6. Principal's Rights and Obligations: Principal's commitments including product supply, support, and information provision

7. Commission Structure: Detailed commission calculations, payment terms, and conditions for commission entitlement

8. Orders and Delivery: Process for order placement, acceptance, and delivery arrangements

9. Intellectual Property Rights: Usage rights for trademarks, trade names, and other IP

10. Confidentiality: Protection of confidential information and trade secrets

11. Term and Termination: Duration, renewal terms, and termination provisions including mandatory notice periods under German law

12. Post-Termination: Obligations and rights after termination, including compensation claims under HGB §89b

13. General Provisions: Standard clauses including governing law, jurisdiction, and entire agreement

Optional Sections

1. Minimum Performance Requirements: Specific sales targets or performance metrics, used when the principal wants to establish clear performance standards

2. Non-Compete: Restrictions on competing activities, subject to German law limitations on post-contractual non-compete clauses

3. Insurance: Insurance requirements for the distributor, relevant for high-value products or regulated industries

4. Data Protection: GDPR compliance provisions, necessary when personal data processing is involved

5. Marketing and Advertising: Specific requirements for marketing activities and cost sharing

6. Training Requirements: Mandatory training provisions, relevant for technical or complex products

7. Stock Requirements: Minimum stock levels and warehouse requirements, relevant for distributors maintaining inventory

8. Customer Service Standards: Detailed customer service requirements, important for customer-facing operations

Suggested Schedules

1. Products and Services: Detailed list of products/services covered by the agreement

2. Commission Rates and Calculations: Detailed commission structure, including any variations by product or customer type

3. Territory Map: Detailed description or map of the assigned territory

4. Reporting Templates: Standard forms for regular reporting requirements

5. Service Level Requirements: Detailed performance metrics and service standards

6. Trademark Usage Guidelines: Specific rules for using the principal's trademarks and branding

7. Technical Requirements: Technical specifications for any systems or equipment required

8. Customer List: List of existing customers and any special arrangements

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

alex.den.21@genieai.co

Relevant legal definitions

Clauses

Relevant Industries

Manufacturing

Consumer Goods

Industrial Equipment

Technology and Software

Automotive

Pharmaceuticals

Electronics

Chemical Products

Machinery

Medical Devices

Luxury Goods

Construction Materials

Agricultural Products

Telecommunications

Relevant Teams

Legal

Sales

Commercial

Business Development

Compliance

Operations

Distribution

International Business

Contract Management

Supply Chain

Relevant Roles

Sales Director

Commercial Director

Business Development Manager

Legal Counsel

Contract Manager

Distribution Manager

Channel Manager

Chief Commercial Officer

Sales Operations Manager

Regional Sales Manager

Export Manager

International Business Manager

Compliance Officer

General Counsel

Managing Director

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Let's create your Commission Distribution Agreement

Authors

Alex Denne

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