Distribution law

Distribution law is constantly evolving, driven by the new commercial techniques that are developing on digital networks.

Several types of distribution contracts can be considered, including:

Exclusive distribution contracts such as franchise, brand concession and commission-affiliation contracts, whereby one company authorizes another to use its distinctive signs and know-how within the framework of a network;

The selective distribution contracts consist in a manufacturer selecting, on the basis of determined criteria, the distributors who will be exclusively entitled to distribute its products.

The organization of a selective distribution network must comply with the provisions of Article 101 of the Treaty on the Functioning of the European Union and Article L.420-1 of the French Commercial Code, which prohibit agreements that have the object or effect of preventing, restricting or distorting competition on a market.

For example, a refusal to sell to an unauthorized distributor could be considered to have a restrictive effect on competition between distributors for the product of the brand concerned.

All distribution contracts are subject to complex rules that must be respected in order to avoid taking risks in the validation of these contracts.

Drafting of exclusive and selective distribution contracts

The company has the choice of defining a selective or exclusive distribution policy.

Exclusive distribution contracts

Exclusive distribution is a distribution method that guarantees territorial exclusivity to distributors.

As soon as the company opts for exclusive distribution, it chooses to distribute its products only through a limited number of distributors who will be exclusively authorized to distribute said products.

This distribution method is strictly regulated by law and only seems to be suitable for very specific products, especially high-end products.

Selective distribution contracts

Selective distribution consists of a company selecting, on the basis of defined criteria, the distributors who will be the only ones authorized to distribute its products.

In practice, selective distribution makes it possible to guarantee the respect of the brand image of the companies and to control the conditions of sale of the products (presentation, price etc…).

A company may authorize another to use its distinctive signs and know-how within the framework of a network, in particular by concluding :

Of franchise agreements : A commercial contract by which a franchisor grants a franchisee the right to use all or part of the intangible rights belonging to him(trade name, trademarks, licenses), generally in exchange for the payment of an entry fee and a percentage of his turnover or a percentage calculated on his profits;

A sign concession contract: contract by which the concessionaire grants the licensor the distribution of products under its sign, in a specific territory, for a limited period of time, and under the supervision of the licensor;

commission affiliation contracts: commercial contract by which the supplier places its products on deposit with the agent, who will be remunerated on the basis of a percentage of the sales, while retaining ownership of the stock.

All distribution contracts are subject to complex rules and it is necessary to have prior legal advice from lawyers or advisors specializing in the field before entering into such a contract, particularly on

Protection of the interests of the parties at the stages of formation, performance and termination of the contract;
The drafting of clauses relating to the obligations of the parties to reinforce their legal security;
Requirements for each type of contract;
Compliance of practices with competition and consumer law rules;
The responsibility of the parties in case of non-performance or bad performance of their obligations ;
The consequences of a breach of commercial relations during the execution of the contract, if any, etc…

Contractual audits – negotiation and drafting of commercial contracts and legal documents

Setting up a distribution network requires defining your expectations and objectives in order to draw up distribution contracts adapted to your situation.

You should also define the scope of your distribution network and conduct contractual audits to identify the issues you face and the commitments you are bound by.

In addition, it is essential to ensure the legal validity of its partnership, distribution, franchise, commission-affiliation, brand concession and commercial agency contracts with regard to contract law, commercial contract law and competition law.

Distribution law also implies the drafting of various legal documents that you will need in the context of distribution and in particular the drafting of your general terms and conditions of sale(GTC), purchase and service provision.

The Bouchara Law firm assists you in particular in :

The strategy to implement for your distribution network;
The drafting of your contracts (distribution, partnership, franchise, commission-affiliation, brand concession, commercial agency…);
The drafting of your legal documents(general conditions of sale, purchase and provision of services);
The compliance of your contracts and documents with the rules of distribution and competition law;
Conducting contractual audits;
Negotiations with your business partners.