I have a distributor lined up in Poland for whom I am happy to grant exclusivity within Poland. The product is a software application, sold online directly by my company.
This distributor will add value, by creating a Polish language manual and website. He will provide the manual only to purchasers who buy through him.
My question relates to Polish buyers who may wish to buy directly through our website (either because they want to, or are unaware of our distributor’s site). It would be very hard for us to stop these direct sales, and in fact we wouldn’t really want to – we get full retail, after all. The distributor does not have a problem with people buying direct from us if that is what they want to do – he will rely on his added value to drive customers to him. I just wonder how we could word the “exclusive” distributor contract to allow for this fact. We plan to yuse your standard exclusive distributor contract, as it seems to contain everything we need. We are mostly interested in being able to review/cancel the contract in the event of lack of marketing/sales.
Alasdair Taylor's Answer
EU competition law distinguishes between “active” and “passive” sales, and you might use that terminology to deal with this issue.
In our template exclusive distribution agreements, the distributor is prohibited from “actively” supplying into the reserved territory, whereas the supplier is prohibited from supplying at all in the territory granted to the distributor. That provision could easily be amended so that the supplier is instead prohibited from actively suppling in the distributor’s territory.