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Distribution Agreement
I need a distribution agreement for a Dutch company to appoint an exclusive distributor in the Benelux region for our consumer electronics products. The agreement should include terms on minimum purchase requirements, marketing obligations, and a 2-year term with an option for renewal, as well as compliance with EU competition laws.
What is a Distribution Agreement?
A Distribution Agreement sets out the legal relationship between a manufacturer or supplier and the companies that will sell their products in specific markets. Under Dutch law, these contracts carefully outline how distributors can represent, market, and sell products while protecting both parties' commercial interests.
Beyond basic sales terms, these agreements typically cover exclusive territories, minimum purchase requirements, and product handling standards. Dutch competition law shapes key provisions around pricing, market restrictions, and distribution networks - especially when deals involve other EU countries. The agreement gives distributors clear rights while helping suppliers maintain brand control and meet local regulatory requirements.
When should you use a Distribution Agreement?
Consider using a Distribution Agreement when expanding your product's reach into new markets through third-party sellers in the Netherlands. This becomes especially important when you need to maintain control over how your products are sold, presented, and serviced across different regions or sales channels.
The agreement proves essential when setting up exclusive territories, establishing minimum sales targets, or protecting your brand identity in the Dutch market. It's particularly valuable for companies entering distribution partnerships with significant inventory commitments, specific quality standards, or when dealing with regulated products that require careful handling and documentation under EU and Dutch law.
What are the different types of Distribution Agreement?
- Exclusive Distribution Contract: Grants a distributor sole rights to sell products in specific territories, preventing other distributors from operating there
- Sole Distributor Agreement: Similar to exclusive agreements but allows the supplier to sell directly in the territory
- Distribution And Licensing Agreement: Combines product distribution rights with intellectual property licensing
- Agency And Distribution Agreement: Covers both direct sales representation and product distribution arrangements
- Distribution Agreement Contract: Standard non-exclusive agreement allowing multiple distributors in the same territory
Who should typically use a Distribution Agreement?
- Manufacturers/Suppliers: Dutch companies or international firms who create or own products and want to expand their market reach through distributors
- Distributors: Local or regional businesses that purchase and resell products, often adding value through marketing, storage, and customer service
- Legal Counsel: Corporate lawyers who draft and review Distribution Agreements to ensure compliance with Dutch and EU competition laws
- Commercial Directors: Business leaders who negotiate terms and oversee distribution strategy implementation
- Compliance Officers: Professionals ensuring the agreement meets regulatory requirements and monitoring ongoing compliance
How do you write a Distribution Agreement?
- Party Details: Gather complete legal names, registration numbers, and addresses of both supplier and distributor
- Product Specifics: List all products covered, including specifications, pricing structures, and any special handling requirements
- Territory Definition: Map out exact geographical areas where distribution rights apply under Dutch law
- Performance Metrics: Define minimum purchase quantities, sales targets, and reporting requirements
- Duration Terms: Decide on initial term length and renewal conditions
- Quality Standards: Outline product storage, handling, and customer service requirements
- Automated Support: Use our platform to generate a legally-sound Distribution Agreement that includes all mandatory elements
What should be included in a Distribution Agreement?
- Party Identification: Full legal names, addresses, and registration details of supplier and distributor
- Product Definition: Detailed description of products, including specifications and pricing structure
- Territory Rights: Clear geographical boundaries and any exclusivity provisions under Dutch law
- Term and Termination: Contract duration, renewal conditions, and termination procedures
- Payment Terms: Pricing, payment schedules, and currency specifications
- Performance Obligations: Minimum purchase requirements and sales targets
- Intellectual Property: Trademark usage rights and brand protection measures
- Dispute Resolution: Choice of Dutch law, jurisdiction, and arbitration provisions
- Compliance Framework: EU competition law requirements and local regulatory obligations
What's the difference between a Distribution Agreement and an Agency Agreement?
A Distribution Agreement differs significantly from an Agency Agreement in several key ways under Dutch law. While both involve selling products, their legal structures and responsibilities create distinct relationships. Let's explore the main differences:
- Legal Relationship: Distributors buy and resell products independently, while agents act as representatives selling on behalf of the principal
- Financial Risk: Distributors take ownership of inventory and bear financial risk, whereas agents never own the products they sell
- Compensation Structure: Distributors earn through markup on sales, while Agency Agreement holders receive commissions
- Legal Protection: Agents enjoy special statutory protections under Dutch law, including mandatory termination compensation; distributors typically don't
- Customer Relationships: Distributors maintain direct customer relationships and set their own prices, while agents work within the principal's pricing and terms
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