Most disputes between a brand and a distributor start with something nobody wrote down. Before stock moves, we suggest brands cover these points in a signed document:
- Which products the distributor may sell.
- Which countries and which sales channels are included.
- Your pricing or advertising policy, and what happens if it is broken.
- Minimum order size, payment terms and who pays freight.
- How the agreement ends and what happens to unsold stock.
Territory limits
The US Federal Trade Commission says limits on how or where a dealer may sell are generally legal when a manufacturer imposes them acting on its own.
Pricing rules need more care
Since a 2007 Supreme Court decision, manufacturer-imposed price programs are judged under a rule of reason at federal level. The FTC notes that some state antitrust laws and international authorities treat minimum price rules as illegal per se, so take legal advice before you set one, particularly across borders.
Source: Federal Trade Commission, Manufacturer-imposed Requirements. General information only, not legal advice.