New distribution agreement template, essential conditions and antimonopoly legislation

A new Distribution agreement template, Ukrainian-English version, has appeared on our website. Distribution contracts belong to the category of supply contracts and are quite common in Ukraine, in particular in the field of sales of cars, clothes and shoes, medicines, food products, etc. Despite this, there is no special regulation of such contracts in Ukraine. Distribution contracts belong to contracts that can be concluded due to the principle of freedom of contract enshrined in Art. 3 of the Civil Code of Ukraine and detailed in Art. 6, 627 of the Civil Code of Ukraine and are simultaneously regulated by the Economic Code of Ukraine. If we are talking about international distribution agreements, then it is clear that it is also necessary to be guided by the provisions of the Law of Ukraine "On International Private Law".

In the Model Rules of European Private Law Principles, Definitions and Model Rules of European Private Law. Draft Common Frame of Reference, hereinafter referred to as the DCFR, or the Rules) is the section "PART E. COMMERCIAL AGENCY, FRANCHISE AND DISTRIBUTORSHIP", which applies to contracts under which one party, the supplier, undertakes on an ongoing basis to supply to the other party, to the distributor, the product, and the distributor undertakes to purchase it or accept, pay for and sell it to third parties on its behalf and in its interests. The rules provide for the possibility of introducing such conditions as: exclusive rights and obligations of the supplier and distributor regarding the supply and purchase of goods in a certain territory; application of recommended prices, terms of resale of goods to consumers; conducting advertising events; distributor reporting; the possibility of the supplier monitoring the activities of the distributor (compliance with standards and instructions), etc. The DCFR is not a regulation, but only a rule of soft law. However, the DCFR is a real source that Ukrainian entrepreneurs can use to regulate their own contractual obligations.

When concluding distribution agreements, it is necessary to take into account the antimonopoly legislation, because the analysis of Art. 6 and 8 of the Law of Ukraine "On the Protection of Economic Competition" makes it possible to conclude that anti-competitive concerted actions (hereinafter - AUD) are actions that establish restrictions on the use of supplied goods, or restrictions on the purchase of goods from other business entities, or aimed at on the formation of prices or other conditions of the contract for the further sale of the supplied goods to other business entities or consumers, provided that such actions lead to a significant restriction of competition in the entire market or in a significant part of it, or these actions limit access to the market of other entities economic entities, or lead to an economically unjustified increase in prices or a shortage of goods. Thus, the content of the AUD largely coincides with the terms of the distribution agreement. In the opinion of Mykhailo Kocherov, with which we agree, if we compare the content of the AUD with the DCFR, it becomes obvious that distribution by its nature is the agreed actions of the parties to the contract, which are aimed at establishing the rules for the further sale of the goods purchased by the distributor, the formation of prices or other conditions of the contract on such subsequent sale, the only question is whether there is a violation of economic competition.

The template contains all the necessary conditions and protects the interests of both suppliers and distributors, it regulates all the rights and obligations of the parties:

• Provision of rights for distribution/resale of products;

• Country of distribution;

• List of goods and prices;

• Method of delivery;

• Payment procedure;

• The distributor's use of the supplier's intellectual property rights;

• Annual minimum quotas.

Composition of the package of documents included in the template:

• Distributor agreement

• Appendix A (range and prices are specified)

• Appendix B (minimum annual purchase quotas are indicated)

You can download the distribution contract template using the link with the option of automatically filling in the details of the counterparty, details of the contract, terms, countries of jurisdiction, which will significantly save your time for creating the document. The template has universal residency and is perfect for residents and non-residents of Ukraine, besides, it can be used both for importing and exporting goods.

Compiling, signing and storing documents - as easy as Lego!