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Distribution Agreement
I need a distribution agreement for a Belgian company to appoint a distributor for its products in the Benelux region. The agreement should include exclusivity for the region, a minimum purchase requirement, and a clause for termination with a 3-month notice period.
What is a Distribution Agreement?
A Distribution Agreement sets out the legal framework between a supplier and a distributor who will sell products in specific Belgian territories. It outlines how the distributor can market and sell the supplier's goods, covering essential elements like pricing, minimum purchase requirements, and exclusivity rights under Belgian commercial law.
The agreement protects both parties by clearly defining their obligations, quality standards, and termination conditions. In Belgium, these contracts must comply with EU competition rules and local fair trade practices, especially regarding territorial restrictions and selective distribution systems. Most Belgian distributors seek agreements that guarantee them exclusive rights within defined regions or customer segments.
When should you use a Distribution Agreement?
Use a Distribution Agreement when expanding your product reach into new Belgian markets through third-party sellers. This becomes essential once you've identified distributors to handle your products, particularly when dealing with exclusive territories or specialized market segments within Belgium's distinct linguistic regions.
The agreement proves vital when setting up long-term distribution partnerships that require clear rules about pricing, marketing standards, and performance targets. It's particularly important for regulated products, like pharmaceuticals or food items, where Belgian and EU compliance standards demand strict quality control throughout the distribution chain. Having this agreement in place prevents costly disputes and protects your brand reputation.
What are the different types of Distribution Agreement?
- Exclusive Distribution Contract: Grants sole rights to distribute products in specific Belgian territories, protecting the distributor from competitor interference
- Distribution And Licensing Agreement: Combines product distribution rights with intellectual property permissions, common in tech and branded goods
- Commission Distribution Agreement: Structures compensation based on sales performance, popular in Belgian retail and luxury sectors
- Distribution License Agreement: Focuses on licensing terms while including distribution rights, typical for software and digital products
- Distribution Service Agreement: Emphasizes service aspects alongside product distribution, used for complex products requiring ongoing support
Who should typically use a Distribution Agreement?
- Manufacturers/Suppliers: Belgian or international companies seeking to distribute their products through local channels, responsible for setting quality standards and supply terms
- Distributors: Belgian businesses that purchase and resell products, often specializing in specific regions or market segments across Flanders, Wallonia, and Brussels
- Legal Counsel: In-house or external lawyers who draft and review Distribution Agreements to ensure compliance with Belgian and EU competition laws
- Commercial Directors: Key decision-makers who negotiate terms and oversee implementation of distribution strategies
- Compliance Officers: Professionals who monitor adherence to distribution terms and regulatory requirements, especially in regulated industries
How do you write a Distribution Agreement?
- Business Details: Gather complete legal names, registration numbers, and addresses of both supplier and distributor, plus their authorized signatories
- Territory Mapping: Define exact geographical boundaries and any exclusivity zones within Belgium's regions
- Product Specifics: List all products covered, including technical specifications, pricing structures, and minimum order quantities
- Performance Metrics: Outline sales targets, reporting requirements, and quality control standards
- Compliance Check: Review Belgian competition laws and EU regulations affecting your distribution model
- Duration Terms: Decide contract length, renewal conditions, and termination procedures that align with Belgian commercial practices
What should be included in a Distribution Agreement?
- Party Identification: Full legal names, addresses, and registration details of supplier and distributor under Belgian law
- Territory Definition: Precise geographical scope and any exclusive distribution rights within Belgian regions
- Product Specifications: Detailed description of products, quality standards, and compliance with EU regulations
- Commercial Terms: Pricing structure, payment conditions, and minimum purchase requirements in euros
- Duration & Termination: Contract period, renewal options, and notice requirements per Belgian commercial code
- Competition Clauses: Non-compete provisions aligned with EU competition law
- Dispute Reֱ: Choice of Belgian law, jurisdiction, and mediation procedures
What's the difference between a Distribution Agreement and an Asset Purchase Agreement?
A Distribution Agreement differs significantly from an Asset Purchase Agreement in several key aspects within Belgian business law. While both involve commercial transactions, their core purposes and structures serve distinct business needs.
- Duration: Distribution Agreements establish ongoing business relationships with regular transactions, while Asset Purchase Agreements typically cover one-time transfers of ownership
- Scope of Rights: Distribution focuses on selling rights and responsibilities without transferring ownership of the business assets themselves
- Payment Structure: Distribution involves recurring payments based on sales performance, whereas Asset Purchase usually requires a single payment or defined installments
- Regulatory Framework: Distribution Agreements must comply with Belgian and EU competition laws, while Asset Purchase Agreements focus more on transfer of title and ownership rights
- Termination Process: Distribution includes notice periods and performance-based termination clauses, unlike Asset Purchase which typically ends upon completion of the transfer
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