The most serious situation is that the agreement absolutely prohibits the trader from selling outside a regulated area. For example, there could be an agreement that the distributor can only sell the products within the city of Cleveland, Ohio, and if the distributor sold products outside the city limits, the manufacturer would have the right to terminate the distributor. Tagged with: Distribution Clauses International Contracts International Distribution Sometimes the distribution agreement will indicate the distributor`s responsibilities either in terms of targets or quotas or with respect to the necessary purchases. There are pros and cons to every way of saying it. We believe that the key lies in the fact that the manufacturer and distributor determine an acceptable „objective“ for both parties. It is therefore more likely that the objective will be achieved, as it ensures mutual commitment and interest. An often controversial question is whether a distribution agreement – with a termination clause – is a comprehensive and integrated agreement, or whether it should be allowed to explain what it means. Usually, the distribution contract contains a rather enigmatic termination clause – perhaps something like: „The manufacturer reserves the right to terminate distribution at any time with a notice period.“ The manufacturer did well. The distributor then responds to a dispute by stating that, during the negotiations and through the relationship, the parties understood that the producer could terminate it at any time for any reason, but that the parties had actually considered a long-term relationship that the producer would not terminate, except for a good reason. The legal question that often needs to be resolved is whether this evidence is admissible. If, according to the decision, the court considers the distribution agreement to be a complete and integrated handwriting and that the termination clause is clear, it should apply the Parol rule of evidence to exclude oral evidence. On the other hand, experience has shown us that the courts often find that the parties never intended to make the agreement the full integrated document and that they will accept parol evidence in such a situation.

Categories: Allgemein