Distributor or agent — the first decision
A distributor buys and resells for its own account, carrying stock and credit risk and owning its customer relationships. An agent sells on the principal's behalf for commission — and benefits from the Commercial Agents Regulations, including potential compensation on termination that can surprise principals badly. The economics and the exit costs differ so much that choosing the structure is the first legal decision, not an afterthought. For agency specifics see agency agreements.
The terms that matter
- Territory and exclusivity — exclusive, sole or non-exclusive; and whether the supplier reserves direct or online sales
- Minimum purchase or sales targets — with defined consequences (loss of exclusivity first, termination second) rather than instant death
- Price, price changes and payment terms — including retention of title over stock
- Brand and IP control — trade mark licence, marketing standards, approved channels
- Term and termination — notice long enough to unwind stock and staffing, and what happens to unsold stock, orders in flight and customer data on exit
- Post-termination restraints — kept within enforceable limits
Competition law draws real lines
Distribution agreements live under EU and Irish competition law. Broadly, under the Vertical Block Exemption framework: imposing minimum or fixed resale prices is off-limits (recommended and maximum prices are generally fine); absolute territorial bans on passive sales — responding to unsolicited customers from outside the territory — are restricted; and outright online sales bans are problematic. These are not drafting niceties: offending clauses can be void and expose the parties to enforcement. Any exclusivity structure should be designed with the block exemption in mind.
Both sides of the table
We act for Irish suppliers appointing distributors abroad, and for Irish distributors taking on international brands — where the usual review points are unrealistic minimums, one-way termination, stock buy-back silence, and foreign governing law that would make every dispute a foreign dispute.
How our fees work
You get a fixed quote in writing before any work starts — no hourly-rate surprises and no meter running while you think. If the scope changes, the quote is revised in writing before we continue. In contentious business, a solicitor may not calculate fees or other charges as a percentage or proportion of any award or settlement. How contract solicitor fees work in Ireland →
Frequently asked questions
What notice must I give to end a distribution agreement?
Whatever the contract says — and if it says nothing, Irish law implies reasonable notice, which courts have measured in months or longer for established relationships. Silence on termination is how suppliers end up paying for a distributor's wind-down.
Can I stop my distributor selling online?
You can impose quality standards on online sales, but outright bans on internet selling are generally impermissible under EU competition rules. Channel strategy needs designing within those limits, not against them.
Who owns the customers when the agreement ends?
For a distributor, by default the distributor — they were its customers. If the supplier wants customer data and continuity on exit, the agreement must say so expressly (and GDPR-compatibly). This clause is worth more than most of the rest of the document.
Talk to a solicitor who reads contracts for a living. Call Mary Molloy Solicitors today.
Whether you are drafting terms for your business, handed a contract to sign, or unsure what a clause commits you to, an early conversation costs little and prevents a lot.
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