Sub Distribution Agreement Template for Germany

A Sub Distribution Agreement is a commercial contract that allows a main distributor to grant sub-distribution rights to another party, creating a multi-tier distribution network. Under German law, this agreement must comply with the German Commercial Code (HGB) and various competition regulations to ensure lawful business operations.

When do you need this document?

You need a Sub Distribution Agreement when you're a main distributor seeking to expand market coverage without direct involvement in every territory. This is common in industries like automotive parts, consumer electronics, or pharmaceutical products where manufacturers appoint primary distributors who then engage sub-distributors for regional coverage. The agreement is essential when your distribution territory is too large to manage effectively alone, or when local market knowledge and relationships are crucial for success. You'll also need this document when the original manufacturer has approved sub-distribution arrangements as part of your primary distribution agreement.

Key legal considerations

Several critical legal aspects require attention when drafting your Sub Distribution Agreement. Territorial restrictions must comply with German and EU competition law, particularly the Act Against Restraints of Competition (GWB) and EU Vertical Block Exemption Regulation. Price maintenance clauses need careful structuring to avoid anti-competitive practices. You must clearly define the relationship between the sub-distributor and the manufacturer, ensuring the sub-distributor understands they have no direct contractual relationship with the original supplier. Quality control provisions should specify standards for product handling, storage, and customer service to protect brand reputation. Intellectual property clauses must address trademark usage rights and restrictions. Termination provisions should include adequate notice periods and procedures for handling remaining inventory.

Legal requirements in Germany

German law imposes specific requirements on Sub Distribution Agreements under the German Commercial Code (HGB). Both parties must be properly identified with complete commercial register details if they are companies. The agreement must specify the exact products covered and territorial boundaries with precision. Under German commercial law, you must include provisions addressing the sub-distributor's obligation to maintain adequate insurance coverage and comply with product safety regulations. The Act Against Unfair Competition (UWG) requires clear guidelines on marketing practices and customer communication. You must ensure compliance with German data protection laws (GDPR) regarding customer information sharing. Competition law compliance requires careful attention to exclusivity arrangements and minimum purchase obligations. The agreement should address German-specific commercial practices, including payment terms that comply with the German Act on Combating Late Payment in Commercial Transactions.