Negotiating Distribution Agreements

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Whether or not a brewery is located in a franchised state, it is essential that it carefully review and negotiate its distribution agreements with the assistance of an experienced lawyer. It is also important to remember that the care of the supplier does not stop when the contract is signed. No matter how the terms of the distribution contract are negotiated and developed, they are virtually useless if the supplier cannot properly secure its claims. This table briefly highlights some of the most important questions you should ask yourself when designing or reviewing a distribution agreement. This is not a complete checklist, as distribution agreements can range from a very short mail-order agreement that simply allows a company to sell your products to complex, complex and complex multi-page international agreements. We also note that software-related distribution agreements require some additional thinking. So we`ve included separate software distribution forms (see Software Distribution Agreement and Section XI). They generally have the form of a licence with the right of sublicensing and, in fact, they are sometimes referred to as such and not as a distribution agreement. Depending on the size, experience and scope of the distributor, it is possible to creatively sculpt different areas. Territories are most often limited to certain states. However, a supplier may limit a small merchant to certain counties or even certain types of establishments (for example. B, grocery stores, but not restaurants). One of the most obvious violations of the distribution agreement, which may be a good reason for termination, is that a distributor must make sales outside its territory.

Too often, however, brewers accept a distributor`s «standard» agreement and, when the relationship breaks down, the supplier finds that they remain stuck without a viable possibility of termination. The best practice is to hire an experienced lawyer to negotiate the terms of the distribution contract. While even the best lawyer cannot evade the laws of the state franchise (which generally prohibit a trader from waiving his rights), there are ways in which a lawyer can help balance the relationship between suppliers and distributors. The main terms of negotiation include termination, territory, brand range and exclusivity.

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