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ICC Model Distributorship Contract
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ICC Publication No.: 646
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ICC Model Distributorship Contract
Sole Importer-Distributor
ICC No. 646
Paperback + CD ROM
8 1/2 inches x 11 3/4 inches
2002 Edition
68 pages
Distributorship contracts are one of the most frequently used means for organizing the distribution of goods in a foreign country. Almost every company engaged in international trade has some distributors abroad, which means that most exporters will be faced with drafting an international distributorship agreement at some point.
But one of the difficulties that traders are confronted with when drawing up contracts is the lack of uniform regulations. This means that parties must refer primarily to the rules set out in their agreements, which in turn makes the careful drafting of such contracts vital.
The first edition of ICC Model Distributorship Contract provided a uniform contractual framework that incorporated the prevailing practice of international trade. It specifically applies to agreements under which the distributors act either as buyers and resellers, or as importers who organize distribution in the country in which they operate.
This new, revised second edition takes into account important changes since the publication of the first model, particularly concerning the EC antitrust rules on vertical restraints, and the need to harmonize with the ICC Short Form Model Contracts, (ICC No. 634).
This new edition comes with a CM ROM that contains the full text of the model and its annexes, permitting you to easily adapt the contract to your specific case. If parties have no need to draw up a special contract of their own, they can use the entire model, which has been drafted to assure balance for both sides.
ICC Model Distributorship Contract is a invaluable resource for companies engaged in commerce around the world. It carries the authority of ICC, the business organization that pioneered many of the fundamental rules and mechanisms at the heart of international trade.
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Introduction
Model Form of International Sole Distributorship Contract
Annexes
I Products and Territory
II Commission on Direct Sales
III Products and Suppliers Represented by the Distributor
IV Names of Existing Customers
V Advertising, Fairs and Exhibitions
VI Conditions of Sale - Discounts
VII Guaranteed Minimum Target
VIII Stock of Products and Spare Parts
IX After Sales Service, Repairs, Warranty
X Change of Control, Ownership and/or Management in the Distributor
(company)
XI Goodwill Indemnity
Appendices
EC Regulation 2790/1999 of December, 22, 1999.
UNIDROIT Principles of International Commercial Contracts
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Interview with Dr. Fabio Bortolotti
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ICC: Can you explain why the first edition Model Distributorship contract became a great success with some 6,000 copies sold
Bortolotti: The ICC Model Distributorship contract has been the second model contract published by the ICC. After the great success of the agency model, the commission on commercial practice proposed to draft also a distributorship contract. Following the same approach used for the agency contract the working party, composed of some of the best specialists in the field of distribution law, worked out a model with really new features: clear and balanced clauses, detailed annexes, etc. This is in my opinion the main reason for the success of this initiative.
ICC: What are the special features of ICC models?
Bortolotti: We have, since the very beginning, tried to draft models which take into due account the interests of both parties involved. These "balanced" models are a very useful tool for parties which are not interested in overprotecting their interests but simply desire to make a fair deal, without needing to discuss all aspects of it. At the same time the ICC models are a very useful basis for working out an individual contract, since they are drafted by people who know the practice of international trade and who are experienced in drafting contracts, and thus warrant a very high quality level.
ICC: Why was there a new edition of the Distributorship Model required?
Bortolotti: The first edition of this model was made many years ago. In the meantime the legal environment has changed and the needs of the users too. In the year 1999 there has been an important change in the European antitrust rules (Regulation 2790/1999) which made it necessary to adapt certain clauses to the new rules. And, more generally, we have been able to work out new and improved contractual solutions which have been transposed in the new edition.
ICC: What is the difference between this model and the "Short Form"?
Bortolotti: The Short Form Distributorship model is a simplified contract, to be used when it is more important for the parties to have a short contract than to have a complete one. However, the short form implies that a number of important problems are not dealt with. A more complete contract certainly gives the opportunity to discuss and agree upon a a larger number of issues. This means that many important aspects will be covered and in case of disagreement during their relationship the parties will find a solution in the contract itself. Of course this will not prevent any dispute, but the fact of having discussed and resolved certain matters from the very beginning in the contract itself certainly reduces the risk of litigation.
ICC: How is the model actually to be used?
Bortolotti: The model is drafted in such a way that the parties can use it as it is, by adding their names, choosing between the main alternatives and filling in the spaces left blank. We have in particular tried to give in the annexes a number of alternative solutions which cover the most common practices. However, the users can also transfer the model to their computer (a CD-ROM is enclosed) and then work on it and make the necessary adaptations.
ICC: Are new model contracts to be expected in the future?
Bortolotti: We are completing the models in the field of distribution, where we add to the existing contracts (agency, distributorship, occasional intermediaries) a model contract on selective distribution. But we are also engaging in totally new fields. In particular we are working on a M&A (Merger and acquisition) contract and on turnkey contracts, which we hope to finish in the year 2003.
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