Germany – Distribution agreements

24 5 月 2016

  • 德国
  • 分销协议

The Court of Justice of the European Union (“CJEU”) has issued a new ruling on the international scope of the Commercial Agency Directive (86/653/EEC of 18 December 1986). The new decision is in line with the rulings of

  1. the CJEU in the Ingmar case (decision of 9 November 2000, C-381/98, goodwill indemnity mandatory where the agent acts within the EU) and Unamar (decision of 17 October 2013, C-184/12, as to whether national agency law is mandatory where exceeding the Commercial Agency Directive’s minimum protection) and
  2. the German Federal Supreme Court of 5 September 2012 (German agency law as mandatory law vis-à-vis suppliers in third countries with choice-of-court clause).

The question

Now, the CJEU had to decide whether a commercial agent acting in Turkey for a supplier based in Belgium could claim goodwill indemnity on the basis of the Commercial Agency Directive. More specifically, the question was whether the territorial scope of the Commercial Agency Directive was given where the commercial agent acts in a third country and the supplier within the EU – hence opposite to the Ingmar case.

The facts

According to the agency contract, Belgian law applied and the courts in Gent (Belgium) should be competent. Belgian law, transposing the Commercial Agency Directive, provides for a goodwill indemnity claim at termination of the contract (and, additionally, compensation for damages). However, the referring court considered that the Belgian Law on Commercial Agents of 1995 was self-restraining and would apply, in accordance with its Art. 27, only if the commercial agent acted in Belgium. Otherwise, general Belgian law would apply.

The decision

The CJEU decided that the parties may derogate from the Commercial Agency Directive if the agent acts in a third country (i.e. outside the EU). This has here been the case since the agent acted in Turkey.

The decision is particularly noteworthy because it – rather by the way – continues the CJEU’s Ingmar ruling under the Rome I Regulation (I.). In addition, it indirectly confirms sec. 92c of the German Commercial Code (II.) – which allows the parties to a commercial agent agreement governed by German law to deviate from the generally mandatory agency law if the commercial agent is acting outside the European Economic Area (“EEA”). Finally, it provides legal certainty for distribution outside the EEA and illustrates what may change after a Brexit as regards commercial agents acting in the United Kingdom (III.) – if the EU and the United Kingdom do not set up intertemporal arrangements for transition.

For details, please see the article by Benedikt Rohrßen, Zeitschrift für Vertriebsrecht 2017, 186 et seq. (“Ingmar reloaded – Handelsvertreter-Ausgleich bei umgekehrter Ingmar-Konstellation nicht international zwingend”).

Manufacturers of brand-name products typically aim to ensure the same level of quality of distribution throughout all distribution channels, offline and online. To achieve this aim, they provide criteria how to resell their products. With the increase of internet sales, the use of such criteria has been increasing as well.

A total ban of online sales to end consumers within the EU is, however, hardly valid because online sales are considered as passive sales (cf. Guidelines on Vertical Restraints 2010, para. 52). Restrictions below a total ban are, however, commonplace (for examples, see the post “eCommerce: restrictions on distributors in Germany”). Yet, it is still not clear how far such restrictions are permissible.

For example, the luxury perfume manufacturer Coty’s German subsidiary Coty Germany GmbH has set up a selective distribution network and its distributors may sell via the Internet, under the following conditions. They shall

  • use their internet store as “electronic store window” of their brick and mortar store(s), thereby maintaining the products’ character as luxury goods, and
  • abstain insofar from engaging third parties as such cooperation is externally visible.

The court of first instance decided that tsuch ban of sales via third party platforms was an unlawful restriction of competition under art. 101 Treaty on the Functioning of the European Union (“TFEU”), namely a hardcore restriction under article 4 lit. c Regulation (EU) No. 330/2010 (Vertical Block Exemptions Regulation or “VBER”). The court of second instance, however, does obviously not see the answer that clear. Instead, the court requested the Court of Justice of the European Union (CJEU) to give a preliminary ruling on how European antitrust rules have to be interpreted, namely article 101 TFEU and article 4 lit. b and c VBER (decision of 19.04.2016, ref. no. 11 U 96/14 [Kart]) – see the previous post “eCommerce: restrictions on distributors in Germany”.

On 30 March 2017, the hearing took place before the CJEU:

  • Coty defended its platform ban, arguing it aimed at protecting the luxury image of brands such as Marc Jacobs, Calvin Klein or Chloe.
  • France – seat of several luxury brands such as Louis Vuitton, Chanel and Christian Dior –supported Coty.
  • The distributor instead argued that established platforms such as Amazon and eBay already sold various brand-name products, e.g. of L’Oréal. Accordingly, there was no reason for Coty to ban the resale via these marketplaces. Germany also supported this view by emphasizing the importance of online platforms for small and medium-sized enterprises (where, however, the share of distributors using online marketplaces is 62% much higher than in all other Member States, see the Staff Working Document, „Final report on the E-commerce Sector Inquiry“, para. 452).
  • Luxembourg – the seat of Amazon – considers a general platform ban to be disproportionate and therefore as anti-competitive (cf. Reuters’ article here).

Interest in the outcome of the Coty case is widespread, as the active participation of the various EU Member States illustrates (in addition to the abovementioned countries, also Italy, Sweden, the Netherlands and Austria). Simply put, the question is whether owners of luxury brands may generally or at least partially ban the resale via internet on third-party platforms.

Indications on how the court may decide have just appeared on 26 July 2017, with the Advocate General giving his opinion. The Advocate General proposes that the CJEU answers the questions referred to the court as follows:

“(1) Selective distribution systems relating to the distribution of luxury and prestige products and mainly intended to preserve the ‘luxury image’ of those products are an aspect of competition which is compatible with Article 101(1) TFEU provided that resellers are chosen on the basis of objective criteria of a qualitative nature which are determined uniformly for all and applied in a non-discriminatory manner for all potential resellers, that the nature of the product in question, including the prestige image, requires selective distribution in order to preserve the quality of the product and to ensure that it is correctly used, and that the criteria established do not go beyond what is necessary.

(2) In order to determine whether a contractual clause incorporating a prohibition on authorised distributors of a distribution network making use in a discernible manner of third-party platforms for online sales is compatible with Article 101(1) TFEU, it is for the referring court to examine whether that contractual clause is dependent on the nature of the product, whether it is determined in a uniform fashion and applied without distinction and whether it goes beyond what is necessary.

(3 The prohibition imposed on the members of a selective distribution system who operate as retailers on the market from making use in a discernible manner of third undertakings for internet sales does not constitute a restriction of the retailer’s customers within the meaning of Article 4(b) of Commission Regulation (EU) No 330/2010 of 20 April 2010 on the application of Article 101(3) on the Treaty of the Functioning of the European Union to categories of vertical agreements and concerted practices.

(4) The prohibition imposed on the members of a selective distribution system, who operate as retailers on the market, from making use in a discernible manner of third undertakings for internet sales does not constitute a restriction of passive sales to end users within the meaning of Article 4(c) of Regulation No 330/2010.”

The Advocate General’s complete opinion can be found at CJEU’s website here.

The updated overview of the procedure can be found at CJEU’s website here.

Practical Conclusions

  1. The Coty case is extremely relevant to distribution in Europe because more than 70% of the world’s luxury items are sold here, many of them online now.
  2. The general ban to use price comparison tools shall be anti-competitive – according to the Bundeskartellamt, as confirmed by the Higher Regional Court of Düsseldorf on 5 April 2017. The last word is, however, still far from being said – see the post “Asics’ Distribution of Sporting Goods: Ban of Price Comparison Tools anti-competitive & void?!?”. Besides, also the Coty case’s outcome may influence how to see such bans.
  3. The Coty case is setting the course for future Internet sales. Depending on the decision of the CJEU, manufacturers of luxury or brand-name products can continue to ban the use of marketplaces like Amazon or eBay for the distribution of their products – or not any more or only under certain conditions. If the court follows the Advocate General’s conclusions, such platform bans appear possible, provided that the platform ban depends “on the nature of the product, whether it is determined in a uniform fashion and applied without distinction and whether it goes beyond what is necessary” (see above).
  4. For further trends in distribution online, see the EU Commission’s Final report on the E-commerce Sector Inquiry and details in the Staff Working Document, „Final report on the E-commerce Sector Inquiry“.
  5. For details on distribution networks and antitrust, please see my article „Plattformverbote im Selektivvertrieb – der EuGH-Vorlagebeschluss des OLG Frankfurt vom 19.4.2016“, in: Zeitschrift für Vertriebsrecht 2016, p. 278–283.

Manufacturers of brand-name products typically aim to ensure the same level of quality of distribution throughout all distribution channels. To achieve this aim, they provide criteria how to resell their products. With the increase of internet sales, the use of such criteria has been increasing as well.

Best example: Asics. Until 2010, the German subsidiary Asics Deutschland GmbH supplied its distributors in Germany without applying special criteria. In 2011, Asics launched a selective distribution system called “Distribution System 1.0“. It provided, inter alia, for a general ban on distributors to use price comparison tools in online sales:

“In addition, the authorized B … distributor is not supposed to … support the functionality of price-comparison tools by providing application-specific interfaces (” API”) for these price comparison tools.” (translated]

The German Federal Antitrust Authority (“Bundeskartellamt”) has determined by decision of 26 August 2015 that the ban of price-comparison tools against distributors based in Germany was void because it infringed Article 101 (1) TFEU, sec. 1 Act on Restraints of Competition (see the 196-page decision here). Reason given was that such ban would primarily aim at controlling and limiting price competition at the expense of consumers. Asics, instead, filed a complaint before the Higher Regional Court of Düsseldorf to annul the Bundeskartellamt’s decision. Asics argued that this ban was a proportionate quality standard within its “Distribution System 1.0“, aiming at a uniform product presentation.

Now the Higher Regional Court of Düsseldorf on 5 April 2017 confirmed the Bundeskartellamt’s decision that within selective distribution systems the general ban to use price comparison tools was anti-competitive and therefore void (ref. no. VI-Kart 13/15 (V); see also the Bundeskartellamt’s press release in English):

  • In particular, the ban of price comparison tools was not exempt from Art. 101 (1) TFEU by way of teleological interpretation (“Tatbestandsreduktion”). According to the court, it was not necessary in order to protect the quality and the product image of the Asics brand (same argumentation as the Higher Regional Court of Frankfurt in its judgment of 22.12.2015, ref. no. 11 U 84/14 regarding Deuter’s functional back-up bags; the Federal Supreme Court will, however, still decide on this, ref. no. KZR 3/16). The court declared that the ban was intended to restrict the buyers, arguing that distributors would be restricted in entering into a price competition with others. The presentation of products in price comparison tools would not damage the quality or brand of Asics products. It would neither give a “flea market impression“, ostensibly also not from the simultaneous presentation of used products. Also, the ban of price comparison tools would not solve the problem of “free-riding“. In any event, the general ban of price comparison tools was not necessary and therefore unlawful.
  • The ban would also not be exempt under the Vertical Block Exemption Regulation. Instead, the court argued, the ban would limit passive sales (over the internet) to end customers, contrary to Art. 4 (c) Vertical Block Exemption Regulation (referring to the CJEU decision in the case of Pierre Fabre, 13 October 2011, ref. no. C-439/09). The “equivalence principle” (i.e. restrictions for offline as well as online sales should not be identical, but functionally equivalent) would not apply as there were no comparable functions to price comparison tools in the stationary trade.
  • Finally, the ban would also not benefit from the individual exemption under art. 101 (3) TFEU (“efficiency defence”).

 Conclusions:

  1. According to the Higher Regional Court of Düsseldorf, manufacturers might not generally prohibit their distributors from using price comparison tools. At the same time, the court also refused to grant leave to appeal against its decision – which, however, can be challenged separately by way of an appeal (sec. 74, 75 Act on Restraints of Competition).The future development of criteria limiting distributors in reselling online remains open, especially as (i) the Coty case is pending at the CJEU (see below) and (ii) the EU Commission in its sector enquiry into e-commerce currently appears to favour manufacturers of brand-name products (see below).
  2. The court has explicitly left open – arguing that they were not relevant for its decision – whether
  • the ban of search engines is anti-competitive (para. 44 et seq. of the decision);
  • the general ban of third-party platforms is anti-competitive (para. 7) – although Asics’ “Distribution System 1.0” also banned third-party platforms such as Amazon or eBay.
  1. Whether and how manufacturers of luxury or brand-name products can continue to ban their distributing via Amazon, eBay and other marketplaces in general in the future will likely be decided by the CJEU in the coming months – in the case of Coty (see our post “eCommerce: restrictions on distributors in Germany”) where a hearing has been just recently been held end of March 2017.
  2. Without prejudice to the Coty case, the EU Commission has however, in its sector enquiry into e-commerce of May 2017, declared that
  • “marketplace bans do not generally amount to a de facto prohibition on selling online or restrict the effective use of the internet as a sales channel irrespective of the markets concerned …,
  • the potential justification and efficiencies reported by manufacturers differ from one product to another …”,
  • (absolute) marketplace bans should not be considered as hardcore restrictions within the meaning of Article 4(b) and Article 4(c) of the VBER…,
  • the Commission or a national competition authority may decide to withdraw the protection of the VBER in particular cases when justified by the market situation”
    (41–43     Final Report on the e-commerce sector inquiry).

Hence, on the basis of the EU Commission’s most recent position, there is room for arguments and creative contract drafting since even general marketplace bans can be compatible with the EU competition rules. However, the courts may see this differently in the single case. Therefore, especially the CJEU with its Coty case (see above) will likely bring more clarity for future online distribution.

在分销合同中，制造商和供应商倾向于限制分销商在线销售商品(I.)。尽管这种做法相当普遍，但反垄断法对于是否有和有哪些限制得到允许并没有建立明确的规定(II.)，特别是有关于在选择性分销网络上销售奢侈品的情况(III.).。

如今，上述问题将决定于欧盟司法法院（CJEU）对互联网上的销售限制的所做出的初步裁决（IV）。以此同时，出现一个问题：如何处理转售限制？(V.)。

 电子贸易销售限制

 电子贸易不断发展–在全球并且也在德国，它约占总零售额的10%（据“Handelsverband Deutschland” [德国贸易协会]2016年的数据）。同样，知名品牌制造商也试图利用电子商务的市场机遇，同时努力维护自己品牌的形象。因此，制造商对分销商进行了若干限制，特别是：

  • 全面禁止互联网销售，
  • 禁止通过第三方线上平台销售（特别是“市场”），
  • 经营一个实体店作为因特网销售的先决条件，
  • 双重定价，或
  • 互联网销售的质量标准。

 对网上转售限制的反垄断限制

然而，反垄断当局最近对这些限制进行了审查，并在电子商务中实施反垄断规则。因此，有相当多的法院判决和反垄断当局的决定，赞成和反对这种限制的都有，例如：

  • 包（“Scout”第三方平台），
  • 运动（“ASIC”价格比较，标志条款，“阿迪达斯”第三方平台），
  • 电子（“森海塞尔”和“卡西欧”均为第三方平台），
  • 奢侈化妆品/香水（“科蒂”价格比较，第三平台），或
  • 软件（“谷歌”要求制造商预装应用程序，参见欧洲联盟委员会2016年4月20日的新闻稿）。

现在，Coty德国奢侈化妆品案已达到欧洲水平。

如今的科蒂案

本案的事实如下:供应商（Coty Germany GmbH）成立了一个选择性分销网络。分销商可在以下限制下通过互联网销售。它们应:

  • 利用它们的网络商店作为其实体店的“电子商店窗口”，从而维持产品的奢侈品性质，以及
  • 禁止与第三方合作，因为这种合作是对外可见的。

当事人的意图：供应商要特别实施最后的限制，阻止一个通过亚马逊的市场来销售供应商商品的分销商(Parfümerie Akzente GmbH)。很明显，分销商打算摆脱这种限制。

一审法院，法兰克福区法院，根据《欧洲联盟运作条约》（“TFEU”）第101条，裁决认为通过第三方平台的销售禁令，即Regulation（EU）第330/2010（坚决豁免规定或“VBER”）第四条（C）款。然而，二审法院，法兰克福高级地方法院，显然没有给出明确的答案。因此，法院已要求欧盟法院（CJEU）对欧盟反垄断规则即《欧洲联盟运作条约》第101条和第4条（b）款和（c）款（ 19.04.2016, ref. no. 11 U 96/14 [Kart]的决定)如何解释作出初步裁决，

提交给欧盟法院的问题

欧盟司法法院已经为“科蒂德国”立案（reference no. C-230/16）。以下是欧盟司法法院需要回答的四个问题：

  1. 选择性的分销网络的目标在于销售奢侈品以及确保商品有“奢侈的形象”以保 持竞争，这与《欧洲联盟运作条约》第101条第一款可以共存吗？

如果第一个问题得到肯定的回答：

  1. 在具体案例中，如果一个在零售业经商的选择性分销网络的成员被广泛禁止在公开的第三方线上平台进行网络销售，无论生产商的质量是否合法，其竞争性是否与《欧洲联盟运作条约》第101条第一款共存？

是否欧盟法第330 / 2010第四条（b）款可被解释为，强制禁止在零售业经商的选择性分销网络的成员在公开的第三方线上平台进行网络销售，限制了零售商的消费群体有关于物品的选择？

是否欧盟法第330 / 2010第四条（c）款可被解释为，强制禁止在零售业经商的选择性分销网络的成员在公开的第三方线上平台进行网络销售，限制了向终端用户通过物品的消极销售？

如今如何对待限制

在德国，关于网上销售的禁令有一些判例法，有些判决是赞成的，有些判决是反对的。网络销售的限制最近也被德国联邦卡特尔局所审查（联邦反垄断局），这种审查对反对这种限制有很关键的作用，包括对在第三方平台销售的限制。

然而德国最高法院的判决仍旧下落不明。关于供应商和分销商是否可以有效地达成一致特别是对于奢侈品方面的问题也至今没有一个清楚的答案。欧盟司法法院的初步判决应该给予这些问题清晰的回复。

直到欧盟司法法院初步判决下来，目前的法律现状应该特别建立在纵向限制标准2010（其不具备法律质量并且也不约束法庭，而是规定了指导欧洲委员会对纵向协议进行评估的原则，从而通过原则约束欧洲委员会本身）上：

  1. 全面禁止网络销售很难成立因为网络销售被认为是被动销售（参见纵向限制标准2010，第52段）。几乎没有一个批准是限制网络商店语言的因为这并不能改变这种销售的被动性质（参见纵向限制标准2010，第52段）。对互联网销售的营业额的限制也是如此。
  2. 然而，允许必须是，特别是
  • 对电子商务平台设计的定性要求（不造成全面禁止和不限制语言的使用）
  • 对在独占区域，或对供应商的独家客户群，或由供应商分配的另一个买家积极销售的限制（VBER第四条b款（i）项），比如在第三方网站上的区域性横幅（参见纵向限制标准2010，第53段）。
  • 成为供应商选择性分销网络成员的一般定性限制，例如要求分销商有一个或者多个实体店或陈列室（纵向限制标准2010，第54段，176）

欧盟法院的判决将更加清晰——Legalmodo会持续更新科蒂德国案和其他对于网络分销有可能的影响。

Agency agreements

Agency Agreements are regulated by the Agency Agreements Law 12/1992 (which has transposed Directive 86/653/EEC into Spanish law).

The main characteristic of the agency agreement is that through this an individual or a legal entity (the Agent) agrees with the Principal on a continuous or regular basis and against payment of a consideration to be agreed, to promote commercial acts or transactions for the account of such Principal not assuming the risk and hazard of such transactions, unless otherwise agreed.

Commercial relationship: Agents are independent intermediaries who do not act in their own name and behalf, but rather for and on behalf of one or more Principals.

There is no labour but commercial relationship between the Principal and the Agent.

It is presumed that the agency relationship is as a matter of fact. On the contrary, there is a labour relationship when the agent in not entitled to organize by his own his business activity nor to fix its own timetable.

Agents Obligations: Agents must, on his own or through his employees, negotiate and, if required by contract, conclude on behalf of the Principal, the business and transactions he is instructed to handle. Agents are subject to a number or obligations, including the following:

  • An agent cannot outsource his activities unless expressly authorized to do so.
  • An agent is authorized to negotiate agreements or transactions included in the agency agreements, but can only conclude them on behalf of its principal when expressly authorized to do so.
  • An agent may act on behalf of several principals, unless the related goods or services are similar or identical, in which case express consent is required.

Main obligations of the Principal are:

  • To act loyally and in good faith in its relations with the agent.
  • To provide the agent with all the documentation and the information which he may need to develop his activity.
  • To pay the agreed consideration.
  • To accept or reject transactions proposed by the agent.

The agency agreement must always be remunerated/paid. The consideration may consist of a fixed amount, a commission or a combination of both.

Indemnity: the agent is entitled to:

  1. A damages and prejudices indemnity if the contract is terminated by the Principal without cause (not to apply when the termination takes place at the end of the agreed Term).
  2. A compensation for clientele/goodwill if the contract is terminated without cause or terminated through expiration of the agreed term provided the agent has contributed with new clients to the Principal business or increased the transactions with the Principal client portfolio and provided that the Principal can benefit in the future of such activity from the agent. Such compensation cannot exceed the average of the payments/commissions received by the agent throughout the last five years or throughout the contract effectiveness if the duration has been below five years.

Non Competition:  non-competition provisions (i.e., provisions restricting or limiting the activities that can be carried out by the agent once the agency agreement has been terminated) have a maximum duration of two years from the termination of the agency agreement and must be: agreed in writing, limited to the geographical area where the agent has been trading and related to goods or services object of the agency agreement.

 

————————————-

Need help with your International Distribution Contracts?

Click the button below to Receive Support from our Expert Lawyers thanks to the Online Help Desk

————————————-

Distribution / Concession agreements

There is not a specific regulation for distribution agreements; therefore the Civil Code general contract regulation applies. Through this type of contract the Distributor undertakes toward the Principal – on a continuous or regular basis and against payment of a consideration to be agreed – to promote commercial acts or transactions for the account of such Principal, but assuming the risk and hazard of such transactions.

In practice, distribution agreements are often confused with agency agreements. Nevertheless, they are different and have distinct regulations and characteristics.

  1. Under a distribution agreement, the distributor undertakes to purchase goods belonging to the other party for resale. While under the agency agreement the agent is paid a commission but not purchases and resales.
  2. Under the distribution agreement the Distributor assumes the entire risk of the transaction while under the agency agreement the risk remains with the Principal.

Commercial relationship: under the distribution agreement the link is completely commercial; the risk of a labour relationship being declared is much lower than under the agency agreement due to the fact of the Distributor higher independency and autonomy.

The distribution agreement may be granted under an exclusive or non-exclusive basis. The exclusive may work on both sides: the distributor could be contractually liable to only work with the principal (or not) and the Principal could be contractually bound to only work with the distributor on a given territory.

Parties Obligations: while the Agency Agreement is governed through the Agency Agreements Law (which includes mandatory rules), Distribution Agreements are subject to the Civil Code and therefore the “freedom principle” applies in order to set forth the parties obligations regime.

The Distributor is not paid by the Principal. He makes his benefit through the difference between purchase and sale price.

Indemnity: although the clientele/goodwill indemnity only applies to the agency agreements, the Supreme Court has in various sentences decided that the Distributor could have the right to be paid such an indemnity provided similar provisions as those stated at the Agency Agreements law (see above) where met on an analogy basis.

Non Competition:  non-competition provisions (i.e., provisions restricting or limiting the activities that can be carried out by the distributor once the distributor agreement has been terminated) are valid provided that they are expressly agreed through the agreement and its reasonability can be defended and sustained (in terms of territory, term and consideration).

Commission agency agreements

Through this type of contract, the commission agent undertakes to perform or to participate in a commercial act or agreement on behalf of the Principal.

Commission agents may act:

  • In their own name, acquiring rights against the contracting third parties and vice versa or
  • On behalf of their principal, who acquires rights against third parties and vice versa

Obligations of commission agents:

  1. To protect interests of the Principal as if they were their own and to perform their engagement personally. Commission agents may delegate their duties if authorized to do so and may use employees at their own liability.
  2. To account for amount that they have received as commission, to reimburse any excess amount and to return any unsold merchandise.
  3. Commission agents are barred from buying for their own account or for the account of others, without the consent of their principal, the goods that they have been instructed to buy.

Commission: The principal undertakes to pay a commission to the commission agent, usually linked and only accrued if the Transaction is closed.

Differences and similarities between agency agreements and commission agency agreements.

  • Main similarity: In both cases, and individual or legal entity undertakes to pay another compensation for arranging a business opportunity for the former to conclude a legal transaction with a third party, or for acting as the former’s intermediary in concluding the transaction.
  • Main difference: Agency agreements involve an engagement on a continuous or regular basis, whereas commission agency agreements involve occasional engagements.

Franchise Agreements

Franchise Agreements are governed through (i) the Law 7/1996, of January 15, regulations retail trade, regarding the basic conditions for the franchise activity and creating the Register of Franchisors; (ii) Royal Decree 201/2010, of February 26, regulating the exercise of the commercial activity under a franchise arrangement and the communication of information to the Register if Franchisors; and (iii) Royal Decree 378/2003, which refers to Regulations (EC) No. 2790/1999, of December 22, 1999, relating to the application of Article 81(3) of the Treaty to certain categories of vertical agreements. Through the Franchise Agreement the franchisor grants a right to, and imposes an obligation on, its individual franchisees, for a specific market, to pursue the business or commercial activity (sale of goods, services or technology) previously carried out by the Franchisor with sufficient experience and success, using the knowhow, system, trademarks, IP rights etc. defined by the Franchisor.

The Franchise Agreement entitles and obliges the Franchisee to use the brand name and/or trade or service mark for the goods and/or services, the know-how and the technical and business methods, which must be specific to the business, material and unique, the procedures and other intellectual property rights of the Franchisor, backed by the ongoing provision of commercial and technical assistance under, and during the term of, the relevant franchising agreement between the parties, all of the above regardless of any supervisory powers conferred on the Franchisor by contract.

Formalities: In Spain, prior to start franchising activities, Franchisors must register in a public administrative Register of Franchisors.

Although the very short regulation of the Franchise Agreement leaves ground for the freedom principle, usually the franchisee pays a royalty to the Franchisor (commonly linked to the volume of sales but could also be a fix royalty), and a publicity royalty (so as to contribute to the Principal publicity cost of which the franchisee benefits).

Non Competition: throughout the life of the agreement, non-competition clauses (reciprocally) are common and admissible; after the termination of the contract, the Spanish Court usually admits the validity of the one year non-competition clause but limited to the location where the franchise had been working.

用于约束解决双方争议的方式、规定相关适用法律的契约条款通常被称为“午夜条款”。在许多契约案例中，此条款通常被书写在契约的最末几段，以至于在谈判即将结束时才被讨论，通常此时已是深夜，双方都已精疲力竭，决定在契约上签字。

以上情况通常有两种：第一，在仓促、不谨慎的情况下作出决定。双方相信已在契约重要的问题上达成协议，所以对如何解决争议不够重视。

第二种情况则是相反：双方就管辖权所属法院及适用法律产生矛盾。双方都坚决地要求在自己的国家实施管辖权并适用该国法律。但是，此情况大多因为原则问题和国内外的标准差别问题，而不是因为双方了解问题的实际重要性。

上述两种情况都是棘手的，因为双方都将自己置于风险中：可导致做出错误的决定或无奈地妥协，并且可能会使将来采取的法律行动无效。

所以，必须足够重视并慎重地考虑该条款：通过阅读以下几点思考，牢记在慎重选择契约的司法管辖权和适用法律的同时，保留对另外一篇主题与本文主题同样重要的文章——对仲裁结果进行预知的讨论。

1）中国法官不再是禁忌

在过去很长一段时间，外国人害怕与中国法官接触，因为中国法官曾大多是来自其他公共管理部门的国家公务员。在他们眼中，中国法官被政治化，公正性受到质疑而且一般相当无能。但是今天，至少在被国际投资覆盖多年的城市，情况已经发生变化：司法水平有了明显提高，可独立计算诉讼成本，初审耗时很短（约6个月），并且很大程度上判决公正，特别是在得到合格律师辩护的情况下。因此，考虑到未来可能发生的情况及争议，在起草契约时提出中国司法管辖权是非常必要的。

2）资产在何处？

判决执行的地点是决定司法管辖权最重要的因素。在起草契约时预见在商业关系中可能产生的纠纷，以及将在哪里执行判决（中国或是意大利），都是十分必要的。

在大多数情况下，中国缔约方（以下简称中方）的资产（商品和应收账款合计）仅在中国境内。如果判决有利于外方，那么几乎可以肯定，该判决将不会被积极执行。因此，在中国执行强制执行程序是必要的。出于此原因，若在契约中规定意大利司法管辖权将会适得其反：首先需要在意大利进行耗时很长的诉讼，之后意大利法院做出的判决需要在中华人民共和国得到承认：虽然两国在1991年签订了民事司法互助条约，但是此过程非常官僚，需要判决书等所有文件的中文翻译及公正、认证。并且在承认的过程中，中方会尽全力拖延判决的承认并使其复杂化。

若耗时若干个月的裁定结果为“不可在中国执行判决”，那么外方将会上诉至中国法院。若如此，则会耗时若干年，并将承担更高的成本和苦涩的惊喜：在程序结束时，中方消失或破产，或没有资产可供执行。很不幸，上述情况是普遍存在的。

3）证人、鉴定报告及文件

另一个重要的因素涉及到契约的性质和缔约双方的行为地点。若合约义务在中国执行（例如商店的管理、代理商或经销商进行促销活动或供应/组装产品），则在中国法院进行诉讼的调查、证人的听证会以及相关专家以举证为目的，对产品的核证以及必要文件的分析相对简单许多。若在上述情况下由意大利法庭进行上述操作，将及其困难，并且显然是反经济的。反之亦然。

4）同样的法院，同样的法律

当在不可依据第三国法院及第四国法律的情况下，打破谈判僵局的折中方法通常是选择缔约方中一方国家的法院及另一方国家的法律。

此类的“创意”方案必须尽量避免，特别是避免选择中国司法管辖权。此做法的好处是，受理的法院是缔约双方所属国家的其中一个（理想情况下可以执行判决，如上所述），可以在法律的框架内，选择熟悉的法院及律师进行诉讼。但是，必须依据双方指定的外国法律（很少达成一致），或者任命一名专门针对该问题的法律专家顾问。最终导致诉讼程序更加复杂，耗时更久，成本显著增加。

5）预防措施

还有一种无法等待普通上诉程序，而是迫切需要法院立刻进行保护的紧急情况：最典型的案例是被授权人或加盟商与授权人或制造商进行不正当竞争，销售仿冒品或者在契约结束之后拒不向生产商或授权人归还商店或材料。

在此情况下，利益被侵害方向中国法院申请旨在结束非法行为的保护程序及执行紧急措施至关重要：若契约规定由中国司法管辖或仲裁，而契约中却存在关于意大利司法管辖（即防止在中国进行预防性保护上诉）的条款，则后果非常严重——无法及时有效地在中国采取限制严重损坏商誉和形象行为的行动。

There are two ways to enter and do business in the Dominican Republic: By establishing a separate Dominican business entity (“subsidiary”) or by registering a branch of a foreign company (“branch”). In addition, business relationships may be set up under a commercial contract in form of a joint venture, agency, distribution or similar agreements that comply with Dominican Republic legal and regulatory requirements, for the recognition and validity of business entities and commercial agreements.

Another option consists of a Consortium agreement between foreign and Dominican companies intended to execute projects in which the Dominican State participates.

ESTABLISHING A DOMINICAN SUBSIDIARY

Usually start-up and medium business entities in the Dominican Republic are incorporated as a Limited Liability Company or Sociedad de Responsabilidad Limitada (S.R.L.). The Sociedad de Responsabilidad Limitada or S.R.L. is the most common and efficient form of organizing a company in the Dominican Republic and is often chosen by large foreign companies as the legal form for their subsidiaries.

S.R.L.’s offer the following advantages: The partners receive limited liability, meaning that they only respond for company debts up to the limit of their contributed capital. Shareholders can be legal persons or individuals. SRL’s is manager managed with no board of directors required; managers must be individuals, and can be Dominicans or foreigners. Company can attract capital through the issuing of new shares which may be ordinary or preferred shares.

SRL’s may effectuate any type of activities that are legal in trade and there are no restrictions in the Dominican Republic on the legal currency. The United States Dollar is exchanged freely with the Dominican Peso, as well as any other currency.

SRL’s also serve as a holding company and may keep assets as their property, contributed by the partners or acquired by the same, both national and international, movable and real estate properties.

SRL can outlive their founders. Their quotas may be freely transferred among partners, by way of succession, in case of liquidation of marital community assets, among ascendants and descendants under the rules established in the By Laws.

The main steps in establishing a Dominican Limited Liability Company (SRL) are the following:

  1. Make a search before the Dominican Trademark Office, draft and file the request registration to obtain a trade name for the Dominican Company.
  2. Draft by-laws, minutes of incorporation meeting and related incorporation documents. These may be drafted as private documents or as a notary public act for signing by the partners and managers for legalization by notary public;
  3. Pay the incorporation taxes of one percent (1%) of the company’s registered capital before the corresponding Dominican Tax Administration (DGII);
  4. Prepare the business register application and file it along with the corresponding company incorporation documents after payment of business registration fee to obtain the company’s business registration certificate;
  5. Prepare and file the request to obtain the company’s Tax Identification Number (RNC);
  6. Register at DGII’s web page to obtain access and request fiscal invoice numbers (NCF);
  7. Enroll employees before the treasury of social security (TSS) and the ministry of labor.

The following schedule serves as a guidance of the time required to form a new Dominican Company:

Register of company trade name 5 to 7 days
Drafting incorporation documents plus 2 to 5 days
annexes (Incorporation Meeting, By-laws, Business Register application)
Paying incorporation taxes on capital less than 1/2 day
Incorporation Meeting of shareholders less than 1/2 day
Legalizations by Notary Public less than 1/2 day
Registration in Business Register 2 to 5 days
Registration as Tax Contributor (RNC) 10 to 15 days

The following founding documents are needed to form the company:

  1. Business Register request of registration form for Dominican Company, duly signed by the person that is authorized by the company or by an empowered attorney, for which a copy of the power of attorney shall be provided.
  2. By- Laws/Articles of Incorporation in private or notary act form containing the details required in legislation (including company name, registered domicile and purposes.
  3. Attendance List and Minutes of the Incorporation Meeting.
  4. Updated List of Partners/ Shareholders
  5. Report of the Commissary of Contributions, if applicable.
  6. Receipt of payment of the tax on the incorporation of legal entities.
  7. Photocopies of the Dominican Identity and Electoral Card and if foreign, Passport photo page or other official document with visible photo from the country of origin for the partners, managers and account commissary.
  8. Copy of the Trade Name Certificate issued by the Dominican Trademark Office.
  9. Declaration of acceptance of the appointments by the managers if this is not apparent from the by-laws and minutes of the incorporation meeting.

REGISTERING A DOMINICAN BRANCH

Foreign companies interested in doing business in the Dominican Republic (DR) may register a branch in the DR. Under Dominican law, a registered foreign company branch office can enter into contracts and execute and settle transactions in its own name, and can sue and be sued at its place of business.

In order to successfully complete a DR branch registration, the foreign company documents shall prove its valid incorporation and existence, contain all general and specific information as well as proper authorizations; corporate documents shall be certified, notarized and duly legalized by all applicable foreign and local authorities according to local and international law. The Dominican Republic is a member of the 1965 convention of The Hague or Apostille.

The registration of a foreign company branch before local authorities will enable the owners of the foreign entity to conduct business in a similar way and equal rights as a DR business entity.

Branches of foreign corporations are in general treated the same way as legal entities for tax purposes. They are however not subject to issuance stamp tax upon formation. Profits of a Dominican branch office are exempt from taxation (Dominican withholding tax) in the partner-nation under the double-taxation agreements which Dominican Republic has signed.

To register a branch in the DR, it is necessary to provide certified company incorporation, shareholder and manager verification and a power of attorney to qualified attorneys who will draft, prepare and file the request of branch registration at the business register and request a Taxpayer Identification Number (TIN) in the Dominican Republic.

Usually, the registration of a branch to pursue general, unregulated and taxed commercial activities may be accomplished by pursuing the following:

  1. a) Business Registry: The Company should be registered in the Business Registry of the Chamber of Commerce where its local domicile will be located. A registration fee is calculated based on the authorized capital. In order to obtain this registry, the company must file all documents which evidence its proper incorporation in the home country and that representatives are fully authorized to register the foreign company branch.
  2. b) TIN: Issued by the Tax Administration. It is a number that shall serve for identifying the business’s taxable activities and for the control of the duties and obligations derived therefrom. To obtain such registration, the company shall file copy of the Business Registry and the corporate documentation that may be required by such Tax Administration. It shall also present a valid corporate domicile in the DR which may be subject to verification.

USING DOMINICAN COMMERCIAL AGENTS AND DISTRIBUTORS

A foreign supplier of goods and services may choose to enter the Dominican market by selling his/her products through Dominican agents and distributors or representatives. The different channels of selling are subject to different legal frameworks.

Contracts involving Dominican agents and distributors are generally governed by the Civil Code of the Dominican Republic, whose freedom of contract principle allows the parties to choose freely the form, terms and conditions of their agreement as well as by the Code of Commerce and general commercial practices and rulings interpreting the scope of agency, unless said agreement is registered under Law 173 Protecting Importing Agents of Merchandises and Products of April 6, 1966, as amended (“Law 173”).

Local agents and distributors often want to register their Agreements with foreign enterprises under Law 173, while foreign companies that do not have a free trade agreement with the Dominican Republic, are often unaware of this possibility and without adequate previous legal counsel, may later find out a Law 173 registration has been made.

Once registration has been obtained, the relationship of the local licensee (a.k.a. “concessionaire”) with its grantor becomes governed by the provisions of Law 173 of 1966, which provides the local concessionaire with the following rights:

  • The right to initiate legal actions against the grantor or a third party for the purpose of preventing them from directly importing, promoting or distributing in Dominican Territory the registered products or services of the grantor;
  • The right to file suit for damages against both the grantor and any new appointee for substitution of the local concessionaire, including the right to be indemnified for unjust termination in accordance with the formula and for the concepts provided by Article 3 of Law 173.
  • The right to an automatic renewal of the contract or a mandate of continuation of the relationship existing thereof, even if the termination clause of a registered contract provides otherwise.
  • Unilateral termination by the grantor of the local concessionaire’s rights under Law 173 of 1966 is only possible if made for a “just cause”, pursuant to the definition of just cause provided by Law 173 of 1966.
  • The Law provides exclusive jurisdiction to the courts of the Dominican Republic.

Law 173 protects Dominican agents and distributors of foreign enterprises. Its objective is to protect exclusive and non-exclusive agents, distributors and representatives from being unilaterally substituted or terminated without just cause by foreign entities, after favorable market conditions have been created for them in DR.

Law 173 defines as grantor the individuals or legal entities who the Dominican agents and distributors (i.e. concessionaires) represent, who conduct business activities in the interest of the grantor or of its goods, products or services, whether the contract is granted directly by grantor, or by means of other persons or entities, acting in grantor’s representation or in their own name but always in its interest or of their goods, products or services.

The author of this post is Felipe Castillo.

Agency (regulations, duration, termination, indemnities – if any)

Instead of direct distribution (by setting up a branch, a subsidiary or via e-commerce), one can also distribute ones’ products and / or services indirectly. Indirect distribution especially includes agents, distributors, franchisees or commission agents.

Self-employed commercial agents solicit customers and can (but do not have to) have the authority to conclude a contract on supplier’s behalf. The supplier sells directly to end customers and bears the distribution risk, but may also control the margins. Contrary to employees, the agent’s remuneration (“commission”) can be exclusively profit-oriented, i.e. remunerated only in case of successfully soliciting customers, and in relation to the turnover. Commercial agents have to provide detailed market reports. If the commercial agent acts in the EU, protective agency law applies, including the indemnity claim.

An agent would be treated as a supplier’s employee if the agent does not act independently. An agent acts independently if the agent – according to the overall picture of contractual rules and factual activity – freely organizes his activities and working time (sec. 84 (1) 2 HGB). This goes mutatis mutandis for other types of distribution partners. The treatment as employee especially has the following consequences:

  • employee protection, e.g. limited right of termination under Dismissal Protection Act;
  • continued payment of salary during public holidays, illness and holidays;
  • minimum wage under Minimum Wage Act of 11 August 2014;
  • obligation to pay contributions to social security;
  • income tax on salary;
  • adherence to worker participation and collective bargaining agreements if applicable.
  • exclusive competence of labour courts if the employee has, during the last 6 months of activity, earned an average amount which does not exceed EUR 1,000 per month.

————————————-

Need help with your International Distribution Contracts?

Click the button below to Receive Support from our Expert Lawyers thanks to the Online Help Desk

————————————-

Agency contracts are governed by sec. 84–92c German Commercial Code (HGB). The commercial agent is, next to the employee, strongly protected, e.g. by mandatory rules on remuneration, minimum notice periods, and goodwill indemnity. As regards remuneration, the agent is entitled to

      • “del credere commission” if the agent assumes liability for fulfilment of businesses (sec. 86b HGB);
      • an advance on commission once the principal has performed its obligation (sec. 87a para. 1 HGB);
      • accounting within maximum periods of three months (sec. 87c (1) HGB);
      • commission irrespective of delivery and payment, unless the principal is not responsible for non-delivery (sec. 87a ( 3) HGB);
      • request information, statements of account, an excerpt from the books, and inspection by an auditor (sec. 87c HGB).

These rules are mandatory and cannot be contracted out. Further details on the payment of commission (if not agreed otherwise) are set in sec. 86b et seq. HGB.

Besides, both parties have to safeguard each other’s interests (sec. 86, 86a, 90 HGB and sec. 242 BGB). Theagent is especially obliged to

    • check the customers’ creditworthiness,
    • inform the supplier immediately about any business procured,
    • keep confidential any information obtained during his activity, and
    • abstain from acting for the supplier’s competitors.

Agency agreements can be terminated without cause if contractually agreed. However, mandatory notice periods have to be observed, staggered pursuant to the contractual term: from one month in the first year to six months after five years (sec. 89 ( 1) HGB). The notice periods cannot be shortened, and, in case of extension, the supplier’s notice period must not be shorter than the agent’s one (sec. 89 (2) HGB). A cause is only required if the agreement is terminated without notice period (sec. 89a HGB). It is given if the terminating party cannot reasonably be expected to continue the relationship until ordinary termination (considering all circumstances of the single case and weighing the interests of both parties).

The agent is entitled to indemnity if the agent has brought new customers or has significantly increased the business volume with existing customers, which results in benefits for the principal, and if such payment of indemnity is equitable under the given circumstances (sec. 89b HGB). Indemnity is calculated on basis of the commission earned during the last 12 months of activity, earned with new customers, and existing customers towards whom the agent has substantially increased the sales. Indemnity is capped to a maximum of the past five year’s average annual commission (sec. 89b HGB). The claim cannot be waived before termination, but is excluded if the agent has not notified the principal within one year following termination. Indemnity is not payable if

  • the agent terminated the contract (unless justified by circumstances attributable to the principal or because of the agent’s age or illness),
  • the principle has terminated the contract because of default attributable to the agent (which would justify immediate termination for cause), or
  • the agent, with the principal’s agreement, assigns and transfers its rights and duties under the agency contract to another person.

Indemnity cannot be contracted out, unless the agent acts outside EEA (sec. 92c HGB).

Antitrust law does generally not apply to the agent-relationship, provided that the principal bears the commercial and financial risks related to selling and purchasing the products or services (Guidelines on Vertical Restraints of 10/05/2010, para. 12 et seq., 18, 49). Therefore, suppliers can control the price for which they sell the products / services via agents. Special limits apply only to post-contractual non-compete-obligations if concluded before termination. They must be limited to a two-year-maximum, to the agent’s territory or customers, and to the contractual products or services. Further, they must be done in writing and delivered to the agent. The principal has to pay an indemnity for the non-compete obligation’s term (sec. 90a HGB).

Generally, the parties are free to choose the applicable law (art. 3 Rome-I-Regulation). If, however, all elements relevant for the choice of law are located in another country than that of the chosen law, the choice of law shall not prejudice the provisions which cannot be derogated from by agreement (art. 3 (3) and (4) Rome-I-Regulation).

Overriding mandatory provisions of the forum’s law cannot be avoided by choosing another law. The courts may also give effect to overriding mandatory provisions of the country where the contractual obligations have to be performed (cf. art. 9 Rome-I-Regulation). Overriding mandatory rules are especially most of the protective agency law provisions. If, therefore, the agent acts within the EU, the agent’s claim for goodwill indemnity (based on the EU Directive on self-employed commercial agents of 1986) can hardly be contracted out – even if the parties choose a foreign law (cf. European Court of Justice, decision of 09/11/2000 [“Ingmar”], concerning, however, the former Rome Convention on Law Applicable to Contractual Obligations of 1980). Arguments against applying the same principles under the Rome-I-Regulation exist, but there is yet no case law which favors such interpretation.

Generally, the parties are free to choose a court, especially if

Besides, the parties may also choose arbitration (sec. 1029 et seq. ZPO, and art. 1 (2)d Brussels-Ia-Regulationand art. 1 (2)d Lugano-II-Convention).

However, a choice of court or arbitration can hardly avoid overriding mandatory provisions, as ruled by the Higher Regional Court in Munich (decision of 17/05/2006), and confirmed by the BGH (decision of 05/09/2012).

Suppliers and distribution partners are free to use any means of dispute resolution, especially out-of-court-negotiation, mediation, arbitration, litigation. Restrictions exist only insofar as overriding mandatory provisions can hardly be avoided by means of dispute resolution (see above). Suppliers and distribution partners can expect fair treatment in German courts since the judges are well-trained, have been determined beforehand, and the parties are entitled to due process of law (art. 101, 103 German Constitution). Advantages of resolving disputes in Germany are (inter alia) that court rulings are quite foreseeable and that court proceedings are quite quick (8.2 months for proceedings in the district courts according to the latest statistics).

Distribution or Concession of sale

Distributors buy and sell products on their own behalf. Consequently, they bear distribution risks, and, in return, gain profit from the difference between purchase and resale price, while suppliers’ margins are rather low. The distributor is obliged to market and distribute the supplier’s products, and to safeguard the supplier’s interests. Distributors are less protected than commercial agents (exceptions: see below). The supplier is obliged to assist and take care of his distribution partner, subject, however, to the supplier’s economic freedom.

Distributorship contracts are – as in most EU member states – not explicitly regulated by statutory law. However, there is extensive case law, e.g. whether the supplier has to take back products unsold at termination of contract. Agency law applies by analogy if the distributor is:

  • integrated into the supplier’s sales organization; and
  • obliged (due to agreement or factually) to forward customer data during or at termination of contract.

Further, distributorship contracts have to conform to antitrust law. Generally, the antitrust law of any affected market applies (art. 6 (3a) Rome-II-Regulation). Agreements which aim at or result in restraints of competition are prohibited by antitrust law, namely by the German Act Against Restraints of Competition (“GWB”) andart. 101, 102 Treaty on the Functioning of the EU (“TFEU”). Unless agreements contain hardcore restrictions, asafe harbor is provided by the De Minimis Notice of 30/08/2014 and the Vertical Block Exemption Regulation no. 330/2010 [“VBER”]). Hardcore restrictions are generally prohibited, regardless of the parties’ market shares, especially price fixing, restricting the geographic areas or categories of customers, or cross-supplies between distributors within a selective distribution system. If one party’s market share exceeds 30%, any restriction of competition can only benefit from the individual exemption under the strict criteria of art. 101 (3) TFEU(“efficiency defense”). Here are the most relevant types of clauses.

As regards non-compete-obligations, they are enforceable if they conform to antitrust law:

  • Such agreements between non-competitors are safe if each party’s market share does not exceed 15% on any relevant market affected. If one party’s market share exceeds 15%, but none exceeds 30%, a non-compete-obligation during the contractual term is valid if limited up to 5 years at most. Where products are sold on premises owned or leased by supplier from third parties, the five-year maximum does not apply. However, the non-compete obligation cannot exceed the term the buyer is occupying the premises.
  • After the contractual term, a non-compete obligation where one party’s market share exceeds 15%, but none exceeds 30%, is valid if it is necessary to protect know-how transferred to the distributor, and if limited to competing products, the concrete distributor’s premises, and a 1-year-term.

A supplier can generally not fix a resale price or price level at which its distributors or franchisees resell (except for suppliers that manufacture newspapers, magazines and books, sec. 30 GWB). An agreement or behaviour that aims at establishing such resale price maintenance is treated as hardcore restriction and thereforegenerally void (cf. Guidelines on Vertical Restraints of 10/05/2010, para. 48, 223). By way of – rare – exception, the supplier can plead the efficiency defense (e.g. when introducing a new product or a coordinated short term low price campaign).

However, resale prices can be influenced by recommending resale prices or setting maximum resale prices:Recommending resale prices or setting maximum resale prices is exempt from antitrust law if the parties’ market shares do not exceed 30% (beyond, there is only room for the efficiency defense), and only if it does not result in a minimum or fixed sale price because of pressure or incentives from one party (art. 101 (1) TFEU andart. 4 (a) VBER).

Establishing a minimum advertised price policy is exempt if it works as mere recommendation. If, however, it results in minimum resale prices or a fixed or minimum price level, it can only be exempt under the efficiency defense.

By contrast, a supplier shall not announce not to deal with distributors or franchisees that do not follow its pricing policy because it will be treated as fixing the selling prices (see above).

Most-favored nation or most-favored customer clauses are those which specify that the supplier’s price to the distributor will be no higher than its lowest price to other customer. Such clauses are enforceable if agreed between non-competitors and if none of the parties’ market shares exceeds 30% (beyond, there is only room for the efficiency defense).

The distributor on its side can generally charge different prices to different customers because of freedom of contract. However, a seller

  • may have to charge the same prices if it holds a dominant or similarly strong market position(sec. 19, 20 GWB and art. 102 TFEU);
  • may generally not charge different prices on grounds of race or ethnic origin. The same goes ongrounds of sex, religion, disability, age or sexual orientation if the respective sales contract is typically concluded without or with low importance of the buyer’s person, especially in “bulk business”. An exception exists if different treatment is based on objective grounds, especially where it serves to avoid threats, prevent damage etc. (sec. 19, 20 Anti-Discrimination Act, “AGG”).

A supplier may not restrict the territory into which, or the customers to whom its distribution partner sells (art. 101 (1) b TFEU). Exempt are, however, restrictions of:

  • active sales into the exclusive territory or an exclusive customer group reserved to the supplier or another distribution partner;
  • sales to end users if the distribution partner operates at wholesale level;
  • sales from members of a selective distribution system to unauthorised distributors in the system’s territory; and
  • selling components, supplied for incorporation, to customers who would use them to manufacture the same kind of products (art. 4 (b) VBER).

Active sales mean actively approaching individual customers (e.g. by direct, unsolicited mail, e-mail, visits) or a customer group in a specific territory trough promotions specifically targeted at that group. Passive sales mean responding to unsolicited requests from individual customers, including general advertising which reaches customers in other exclusive territories or customer groups if done reasonably. This also applies to the internet: sales via webshops cannot be excluded. A supplier may only, however, require its distribution partner to fulfil certain quality standards, especially in selective distribution (Guidelines on Vertical Restraints of 10/05/2010, para. 51, 54).

At the end of the distribution chain, consumer protection laws apply, namely between the seller and the buying consumer. Statutory law grants a 2-year-warranty that products are free from defects at the passing of risk. In case of defect, the buyer is entitled to claim subsequent performance (remedy of defect or delivery of a defect-free product), alternatively price reduction or withdrawal (all regardless of fault), and, damages, provided that the seller has acted with fault (sec. 437, 280 et seq. BGB). Though fault is generally assumed by law, the seller can exculpate itself, especially if the seller has not manufactured the good (but its sub-supplier). Towards consumers, these rights cannot be contracted out (sec. 474, 475 BGB). Each seller within the distribution chain is entitled to have recourse against its own supplier if the product has already been defective at the respective delivery (sec. 478, 479 BGB). In order to maintain these rights, however, the buyer (unless consumer) already has to check at delivery if products are defective, and inform the seller accordingly (sec. 377, 378 HGB).

Besides, special information duties towards consumers exist in:

Statutory law also limits the fees which the consumer shall pay beyond for means of payment or consumer hotlines etc. (sec. 312a (3–5) BGB). Finally, the consumer has a right of withdrawal regarding distance and off-premises contracts (sec. 312g, 355 BGB).

These consumer rights are similar throughout the EU because they are influenced by the EU Directives 1999/44/EC on the sale of consumer goods and 2011/83/EU on consumer rights.

A supplier may limit the warranty rights granted by statutory law towards its distribution partners. In general, there are few limits to individual agreements: they must not contradict statutory prohibitions (sec. 134 BGB) and public policy (sec. 138 BGB), and must not limit or exclude liability for willful intent, fraudulently concealing defects, where a guarantee has been given, or according to product liability law (sec. 202, 276, 444, 639 BGB). If the product has been found defective at the consumer, and the defect has already been existing between the distribution partners, a limitation of warranty can only be enforced if the supplier provides another compensation of equal value (sec. 478 (4) BGB).

In standard business terms, however, one may hardly deviate from statutory law – even in B2B-contracts (sec. 310 (1) and 307 BGB). One may only

    •  modify the rules of subsequent performance (time, place, number of attempts);
    • exclude liability for slightly negligent breaches of non-cardinal duties; and
    • limit liability for slightly negligent breaches of cardinal duties to the typical damages foreseeable at conclusion of contract.

The same goes for warranties provided to each downstream customer, unless the customer is a consumer because a consumer’s statutory rights cannot be contracted out.As regards product recalls, statutory law does not set any requirements. According to case law, a manufacturer must keep its products under surveillance and, when detecting risks for legally protected goods (as health), adopt the necessary preventive measures.Extent and time of such measures depends on the single case, especially the good at risk and the extent of possible damage (BGH, decision of 16/12/2008). Distribution agreements can delineate which party isresponsible for a recall and its costs. Individual agreements are not subject to specific limits. Standard business terms, however, are subject to a strict review in court: they can be unenforceable if they are incompatible with essential statutory principles, if they limit essential contractual rights and duties, if they are surprising or ambiguous (sec. 310 (1), 307, 305c BGB). Therefore, such terms should consider who would typically be responsible for recall and costs, depending on the product (ready-made, or not, etc.).

Distributor agreements with indefinite term can be terminated (sec. 314, 573, 620 (2), 723 BGB); the notice period depends, however, on the single case, considering also the distributor’s investments. E.g., one-year periods have been accepted in automotive distribution (BGH, decision of 21/02/1995 [Citroën]). In rare cases, antitrust law may demand a renewal of the relationship.

The distributor can claim indemnity only by analogue application of agency law (see above). The distributor’s indemnity can amount to the distributor’s average annual net margin.As regards applicable law / choice of lawand details on dispute resolution (choice of court, choice of arbitration / mediation), please see above in the section on agents.

Franchising

Franchisees buy and sell products on their own behalf. The franchisee acquires licences of intellectual property rights (trademarks and know-how) from the supplier (franchisor) for using and distributing the products or services. The franchisee is entitled and obliged to design its shop according to the franchisor’s concept and corporate design, and use the management-/system-specific know-how. In return, the franchisee pays royalties. The franchisor is precontractually obliged to disclose the key risks and issues for running the franchise, and subsequently often provides assistance on know-how and business.

Franchise contracts are not explicitly governed by statutory law (unlike e.g. in Italy). They combine elements of licensing, sales, and management of another’s affairs. Generally, agency law applies by analogy (cf. German Federal Court of Justice [“BGH”], decision of 17/07/2002).

Within franchisee relationships, the same antitrust rules apply as within distributor relationships: generally, agreements which aim at or result in restraints of competition are prohibited by antitrust law, namely by the German Act Against Restraints of Competition (“GWB”) and art. 101, 102 Treaty on the Functioning of the EU (“TFEU”). For details, please see above in the section on distributors.

Franchise agreements can be terminated according to agency law (mutatis mutandis). However, longer periods can apply in the specific case, e.g. if the franchisee made considerable investments due to the supplier’s product.

The franchisee can likely claim indemnity based on analogue application of agency law, but this has not yet been ruled out (BGH, decision of 23 July 1997, Benetton). No indemnity, however, can be claimed where the franchise concerns anonymous bulk business and customers continue to be regular customers only de facto (BGH, decision of 5 February 2015).

Trademark license

If a company owns a brand or design, such trademark owner can also distribute the product or service bygranting a trademark license to another party (“licensee”). By way of such license agreement, the trademark owner (“licensor”) allows the licensee to make use of its trademark.

The license agreement should especially cover:

  • the trademark;
  • the goods and/or services which the licensee is entitled to offer under the trademark and details on the use of the trademark (with or on the goods and/or services, promotion material);
  • the territory where the licensee is entitled to use the trademark;
  • any exclusivity of the license (if applicable);
  • royalty (in return for the license);
  • quality control (e.g. approval of samples prior to mass production and audit rights as regards the licensee’s facilities, the raw materials used and the final products);
  • the license’s term; and

the usual boilerplate clauses (written form, no waiver, severability, choice of law, choice of court etc.).

Selling via e-commerce (required licences, if any)

Selling via e-commerce does not require special licenses in Germany. However, certain requirements have to be observed as regards the webshop, especially providing clearly

  • the basic information about the entity behind the webshop (“Contact“, “Imprint” or “Legal Notes”);
  • the terms and conditions of sale; and
  • the privacy policy (it should mention which kind of personal identifiable data [“data”] is stored, how data, cookies and web-tracking are used, and explain the customer’s right to inform about, correct and delete data, cf. sec. 13 German Telemedia Act).

Relevant anti-trust regulations

According to the effects doctrine, the antitrust law of any affected market applies (art. 6 (3a) Rome-II-Regulation). Within the European Economic Area (“EEA”), Agreements which aim at or result in restraints of competition are prohibited by antitrust law, namely by art. 101, 102 Treaty on the Functioning of the EU (“TFEU”) and in Germany also by the German Act Against Restraints of Competition (“GWB”). Unlessagreements contain hardcore restrictions, a safe harbor is provided by the De Minimis Notice of 30/08/2014 and the Vertical Block Exemption Regulation no. 330/2010 [“VBER”]). Hardcore restrictions are generally prohibited, regardless of the parties’ market shares, especially price fixing, restricting the geographic areas or categories of customers, or cross-supplies between distributors within a selective distribution system.

Details are explained above with each kind of distribution channel.

Benedikt Rohrssen

业务领域

  • 代理中介
  • 分销协议
  • 电子商务
  • 特许经营
  • 投资
联系方式 Benedikt

写信给 Benedikt





    阅读 Legalmondo 的隐私政策
    This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

    Spain – Distribution Agreements

    17 5 月 2016

    • 西班牙
    • 分销协议

    The Court of Justice of the European Union (“CJEU”) has issued a new ruling on the international scope of the Commercial Agency Directive (86/653/EEC of 18 December 1986). The new decision is in line with the rulings of

    1. the CJEU in the Ingmar case (decision of 9 November 2000, C-381/98, goodwill indemnity mandatory where the agent acts within the EU) and Unamar (decision of 17 October 2013, C-184/12, as to whether national agency law is mandatory where exceeding the Commercial Agency Directive’s minimum protection) and
    2. the German Federal Supreme Court of 5 September 2012 (German agency law as mandatory law vis-à-vis suppliers in third countries with choice-of-court clause).

    The question

    Now, the CJEU had to decide whether a commercial agent acting in Turkey for a supplier based in Belgium could claim goodwill indemnity on the basis of the Commercial Agency Directive. More specifically, the question was whether the territorial scope of the Commercial Agency Directive was given where the commercial agent acts in a third country and the supplier within the EU – hence opposite to the Ingmar case.

    The facts

    According to the agency contract, Belgian law applied and the courts in Gent (Belgium) should be competent. Belgian law, transposing the Commercial Agency Directive, provides for a goodwill indemnity claim at termination of the contract (and, additionally, compensation for damages). However, the referring court considered that the Belgian Law on Commercial Agents of 1995 was self-restraining and would apply, in accordance with its Art. 27, only if the commercial agent acted in Belgium. Otherwise, general Belgian law would apply.

    The decision

    The CJEU decided that the parties may derogate from the Commercial Agency Directive if the agent acts in a third country (i.e. outside the EU). This has here been the case since the agent acted in Turkey.

    The decision is particularly noteworthy because it – rather by the way – continues the CJEU’s Ingmar ruling under the Rome I Regulation (I.). In addition, it indirectly confirms sec. 92c of the German Commercial Code (II.) – which allows the parties to a commercial agent agreement governed by German law to deviate from the generally mandatory agency law if the commercial agent is acting outside the European Economic Area (“EEA”). Finally, it provides legal certainty for distribution outside the EEA and illustrates what may change after a Brexit as regards commercial agents acting in the United Kingdom (III.) – if the EU and the United Kingdom do not set up intertemporal arrangements for transition.

    For details, please see the article by Benedikt Rohrßen, Zeitschrift für Vertriebsrecht 2017, 186 et seq. (“Ingmar reloaded – Handelsvertreter-Ausgleich bei umgekehrter Ingmar-Konstellation nicht international zwingend”).

    Manufacturers of brand-name products typically aim to ensure the same level of quality of distribution throughout all distribution channels, offline and online. To achieve this aim, they provide criteria how to resell their products. With the increase of internet sales, the use of such criteria has been increasing as well.

    A total ban of online sales to end consumers within the EU is, however, hardly valid because online sales are considered as passive sales (cf. Guidelines on Vertical Restraints 2010, para. 52). Restrictions below a total ban are, however, commonplace (for examples, see the post “eCommerce: restrictions on distributors in Germany”). Yet, it is still not clear how far such restrictions are permissible.

    For example, the luxury perfume manufacturer Coty’s German subsidiary Coty Germany GmbH has set up a selective distribution network and its distributors may sell via the Internet, under the following conditions. They shall

    • use their internet store as “electronic store window” of their brick and mortar store(s), thereby maintaining the products’ character as luxury goods, and
    • abstain insofar from engaging third parties as such cooperation is externally visible.

    The court of first instance decided that tsuch ban of sales via third party platforms was an unlawful restriction of competition under art. 101 Treaty on the Functioning of the European Union (“TFEU”), namely a hardcore restriction under article 4 lit. c Regulation (EU) No. 330/2010 (Vertical Block Exemptions Regulation or “VBER”). The court of second instance, however, does obviously not see the answer that clear. Instead, the court requested the Court of Justice of the European Union (CJEU) to give a preliminary ruling on how European antitrust rules have to be interpreted, namely article 101 TFEU and article 4 lit. b and c VBER (decision of 19.04.2016, ref. no. 11 U 96/14 [Kart]) – see the previous post “eCommerce: restrictions on distributors in Germany”.

    On 30 March 2017, the hearing took place before the CJEU:

    • Coty defended its platform ban, arguing it aimed at protecting the luxury image of brands such as Marc Jacobs, Calvin Klein or Chloe.
    • France – seat of several luxury brands such as Louis Vuitton, Chanel and Christian Dior –supported Coty.
    • The distributor instead argued that established platforms such as Amazon and eBay already sold various brand-name products, e.g. of L’Oréal. Accordingly, there was no reason for Coty to ban the resale via these marketplaces. Germany also supported this view by emphasizing the importance of online platforms for small and medium-sized enterprises (where, however, the share of distributors using online marketplaces is 62% much higher than in all other Member States, see the Staff Working Document, „Final report on the E-commerce Sector Inquiry“, para. 452).
    • Luxembourg – the seat of Amazon – considers a general platform ban to be disproportionate and therefore as anti-competitive (cf. Reuters’ article here).

    Interest in the outcome of the Coty case is widespread, as the active participation of the various EU Member States illustrates (in addition to the abovementioned countries, also Italy, Sweden, the Netherlands and Austria). Simply put, the question is whether owners of luxury brands may generally or at least partially ban the resale via internet on third-party platforms.

    Indications on how the court may decide have just appeared on 26 July 2017, with the Advocate General giving his opinion. The Advocate General proposes that the CJEU answers the questions referred to the court as follows:

    “(1) Selective distribution systems relating to the distribution of luxury and prestige products and mainly intended to preserve the ‘luxury image’ of those products are an aspect of competition which is compatible with Article 101(1) TFEU provided that resellers are chosen on the basis of objective criteria of a qualitative nature which are determined uniformly for all and applied in a non-discriminatory manner for all potential resellers, that the nature of the product in question, including the prestige image, requires selective distribution in order to preserve the quality of the product and to ensure that it is correctly used, and that the criteria established do not go beyond what is necessary.

    (2) In order to determine whether a contractual clause incorporating a prohibition on authorised distributors of a distribution network making use in a discernible manner of third-party platforms for online sales is compatible with Article 101(1) TFEU, it is for the referring court to examine whether that contractual clause is dependent on the nature of the product, whether it is determined in a uniform fashion and applied without distinction and whether it goes beyond what is necessary.

    (3 The prohibition imposed on the members of a selective distribution system who operate as retailers on the market from making use in a discernible manner of third undertakings for internet sales does not constitute a restriction of the retailer’s customers within the meaning of Article 4(b) of Commission Regulation (EU) No 330/2010 of 20 April 2010 on the application of Article 101(3) on the Treaty of the Functioning of the European Union to categories of vertical agreements and concerted practices.

    (4) The prohibition imposed on the members of a selective distribution system, who operate as retailers on the market, from making use in a discernible manner of third undertakings for internet sales does not constitute a restriction of passive sales to end users within the meaning of Article 4(c) of Regulation No 330/2010.”

    The Advocate General’s complete opinion can be found at CJEU’s website here.

    The updated overview of the procedure can be found at CJEU’s website here.

    Practical Conclusions

    1. The Coty case is extremely relevant to distribution in Europe because more than 70% of the world’s luxury items are sold here, many of them online now.
    2. The general ban to use price comparison tools shall be anti-competitive – according to the Bundeskartellamt, as confirmed by the Higher Regional Court of Düsseldorf on 5 April 2017. The last word is, however, still far from being said – see the post “Asics’ Distribution of Sporting Goods: Ban of Price Comparison Tools anti-competitive & void?!?”. Besides, also the Coty case’s outcome may influence how to see such bans.
    3. The Coty case is setting the course for future Internet sales. Depending on the decision of the CJEU, manufacturers of luxury or brand-name products can continue to ban the use of marketplaces like Amazon or eBay for the distribution of their products – or not any more or only under certain conditions. If the court follows the Advocate General’s conclusions, such platform bans appear possible, provided that the platform ban depends “on the nature of the product, whether it is determined in a uniform fashion and applied without distinction and whether it goes beyond what is necessary” (see above).
    4. For further trends in distribution online, see the EU Commission’s Final report on the E-commerce Sector Inquiry and details in the Staff Working Document, „Final report on the E-commerce Sector Inquiry“.
    5. For details on distribution networks and antitrust, please see my article „Plattformverbote im Selektivvertrieb – der EuGH-Vorlagebeschluss des OLG Frankfurt vom 19.4.2016“, in: Zeitschrift für Vertriebsrecht 2016, p. 278–283.

    Manufacturers of brand-name products typically aim to ensure the same level of quality of distribution throughout all distribution channels. To achieve this aim, they provide criteria how to resell their products. With the increase of internet sales, the use of such criteria has been increasing as well.

    Best example: Asics. Until 2010, the German subsidiary Asics Deutschland GmbH supplied its distributors in Germany without applying special criteria. In 2011, Asics launched a selective distribution system called “Distribution System 1.0“. It provided, inter alia, for a general ban on distributors to use price comparison tools in online sales:

    “In addition, the authorized B … distributor is not supposed to … support the functionality of price-comparison tools by providing application-specific interfaces (” API”) for these price comparison tools.” (translated]

    The German Federal Antitrust Authority (“Bundeskartellamt”) has determined by decision of 26 August 2015 that the ban of price-comparison tools against distributors based in Germany was void because it infringed Article 101 (1) TFEU, sec. 1 Act on Restraints of Competition (see the 196-page decision here). Reason given was that such ban would primarily aim at controlling and limiting price competition at the expense of consumers. Asics, instead, filed a complaint before the Higher Regional Court of Düsseldorf to annul the Bundeskartellamt’s decision. Asics argued that this ban was a proportionate quality standard within its “Distribution System 1.0“, aiming at a uniform product presentation.

    Now the Higher Regional Court of Düsseldorf on 5 April 2017 confirmed the Bundeskartellamt’s decision that within selective distribution systems the general ban to use price comparison tools was anti-competitive and therefore void (ref. no. VI-Kart 13/15 (V); see also the Bundeskartellamt’s press release in English):

    • In particular, the ban of price comparison tools was not exempt from Art. 101 (1) TFEU by way of teleological interpretation (“Tatbestandsreduktion”). According to the court, it was not necessary in order to protect the quality and the product image of the Asics brand (same argumentation as the Higher Regional Court of Frankfurt in its judgment of 22.12.2015, ref. no. 11 U 84/14 regarding Deuter’s functional back-up bags; the Federal Supreme Court will, however, still decide on this, ref. no. KZR 3/16). The court declared that the ban was intended to restrict the buyers, arguing that distributors would be restricted in entering into a price competition with others. The presentation of products in price comparison tools would not damage the quality or brand of Asics products. It would neither give a “flea market impression“, ostensibly also not from the simultaneous presentation of used products. Also, the ban of price comparison tools would not solve the problem of “free-riding“. In any event, the general ban of price comparison tools was not necessary and therefore unlawful.
    • The ban would also not be exempt under the Vertical Block Exemption Regulation. Instead, the court argued, the ban would limit passive sales (over the internet) to end customers, contrary to Art. 4 (c) Vertical Block Exemption Regulation (referring to the CJEU decision in the case of Pierre Fabre, 13 October 2011, ref. no. C-439/09). The “equivalence principle” (i.e. restrictions for offline as well as online sales should not be identical, but functionally equivalent) would not apply as there were no comparable functions to price comparison tools in the stationary trade.
    • Finally, the ban would also not benefit from the individual exemption under art. 101 (3) TFEU (“efficiency defence”).

     Conclusions:

    1. According to the Higher Regional Court of Düsseldorf, manufacturers might not generally prohibit their distributors from using price comparison tools. At the same time, the court also refused to grant leave to appeal against its decision – which, however, can be challenged separately by way of an appeal (sec. 74, 75 Act on Restraints of Competition).The future development of criteria limiting distributors in reselling online remains open, especially as (i) the Coty case is pending at the CJEU (see below) and (ii) the EU Commission in its sector enquiry into e-commerce currently appears to favour manufacturers of brand-name products (see below).
    2. The court has explicitly left open – arguing that they were not relevant for its decision – whether
    • the ban of search engines is anti-competitive (para. 44 et seq. of the decision);
    • the general ban of third-party platforms is anti-competitive (para. 7) – although Asics’ “Distribution System 1.0” also banned third-party platforms such as Amazon or eBay.
    1. Whether and how manufacturers of luxury or brand-name products can continue to ban their distributing via Amazon, eBay and other marketplaces in general in the future will likely be decided by the CJEU in the coming months – in the case of Coty (see our post “eCommerce: restrictions on distributors in Germany”) where a hearing has been just recently been held end of March 2017.
    2. Without prejudice to the Coty case, the EU Commission has however, in its sector enquiry into e-commerce of May 2017, declared that
    • “marketplace bans do not generally amount to a de facto prohibition on selling online or restrict the effective use of the internet as a sales channel irrespective of the markets concerned …,
    • the potential justification and efficiencies reported by manufacturers differ from one product to another …”,
    • (absolute) marketplace bans should not be considered as hardcore restrictions within the meaning of Article 4(b) and Article 4(c) of the VBER…,
    • the Commission or a national competition authority may decide to withdraw the protection of the VBER in particular cases when justified by the market situation”
      (41–43       Final Report on the e-commerce sector inquiry).

    Hence, on the basis of the EU Commission’s most recent position, there is room for arguments and creative contract drafting since even general marketplace bans can be compatible with the EU competition rules. However, the courts may see this differently in the single case. Therefore, especially the CJEU with its Coty case (see above) will likely bring more clarity for future online distribution.

    在分销合同中，制造商和供应商倾向于限制分销商在线销售商品(I.)。尽管这种做法相当普遍，但反垄断法对于是否有和有哪些限制得到允许并没有建立明确的规定(II.)，特别是有关于在选择性分销网络上销售奢侈品的情况(III.).。

    如今，上述问题将决定于欧盟司法法院（CJEU）对互联网上的销售限制的所做出的初步裁决（IV）。以此同时，出现一个问题：如何处理转售限制？(V.)。

     电子贸易销售限制

     电子贸易不断发展–在全球并且也在德国，它约占总零售额的10%（据“Handelsverband Deutschland” [德国贸易协会]2016年的数据）。同样，知名品牌制造商也试图利用电子商务的市场机遇，同时努力维护自己品牌的形象。因此，制造商对分销商进行了若干限制，特别是：

    • 全面禁止互联网销售，
    • 禁止通过第三方线上平台销售（特别是“市场”），
    • 经营一个实体店作为因特网销售的先决条件，
    • 双重定价，或
    • 互联网销售的质量标准。

     对网上转售限制的反垄断限制

    然而，反垄断当局最近对这些限制进行了审查，并在电子商务中实施反垄断规则。因此，有相当多的法院判决和反垄断当局的决定，赞成和反对这种限制的都有，例如：

    • 包（“Scout”第三方平台），
    • 运动（“ASIC”价格比较，标志条款，“阿迪达斯”第三方平台），
    • 电子（“森海塞尔”和“卡西欧”均为第三方平台），
    • 奢侈化妆品/香水（“科蒂”价格比较，第三平台），或
    • 软件（“谷歌”要求制造商预装应用程序，参见欧洲联盟委员会2016年4月20日的新闻稿）。

    现在，Coty德国奢侈化妆品案已达到欧洲水平。

    如今的科蒂案

    本案的事实如下:供应商（Coty Germany GmbH）成立了一个选择性分销网络。分销商可在以下限制下通过互联网销售。它们应:

    • 利用它们的网络商店作为其实体店的“电子商店窗口”，从而维持产品的奢侈品性质，以及
    • 禁止与第三方合作，因为这种合作是对外可见的。

    当事人的意图：供应商要特别实施最后的限制，阻止一个通过亚马逊的市场来销售供应商商品的分销商(Parfümerie Akzente GmbH)。很明显，分销商打算摆脱这种限制。

    一审法院，法兰克福区法院，根据《欧洲联盟运作条约》（“TFEU”）第101条，裁决认为通过第三方平台的销售禁令，即Regulation（EU）第330/2010（坚决豁免规定或“VBER”）第四条（C）款。然而，二审法院，法兰克福高级地方法院，显然没有给出明确的答案。因此，法院已要求欧盟法院（CJEU）对欧盟反垄断规则即《欧洲联盟运作条约》第101条和第4条（b）款和（c）款（ 19.04.2016, ref. no. 11 U 96/14 [Kart]的决定)如何解释作出初步裁决，

    提交给欧盟法院的问题

    欧盟司法法院已经为“科蒂德国”立案（reference no. C-230/16）。以下是欧盟司法法院需要回答的四个问题：

    1. 选择性的分销网络的目标在于销售奢侈品以及确保商品有“奢侈的形象”以保 持竞争，这与《欧洲联盟运作条约》第101条第一款可以共存吗？

    如果第一个问题得到肯定的回答：

    1. 在具体案例中，如果一个在零售业经商的选择性分销网络的成员被广泛禁止在公开的第三方线上平台进行网络销售，无论生产商的质量是否合法，其竞争性是否与《欧洲联盟运作条约》第101条第一款共存？

    是否欧盟法第330 / 2010第四条（b）款可被解释为，强制禁止在零售业经商的选择性分销网络的成员在公开的第三方线上平台进行网络销售，限制了零售商的消费群体有关于物品的选择？

    是否欧盟法第330 / 2010第四条（c）款可被解释为，强制禁止在零售业经商的选择性分销网络的成员在公开的第三方线上平台进行网络销售，限制了向终端用户通过物品的消极销售？

    如今如何对待限制

    在德国，关于网上销售的禁令有一些判例法，有些判决是赞成的，有些判决是反对的。网络销售的限制最近也被德国联邦卡特尔局所审查（联邦反垄断局），这种审查对反对这种限制有很关键的作用，包括对在第三方平台销售的限制。

    然而德国最高法院的判决仍旧下落不明。关于供应商和分销商是否可以有效地达成一致特别是对于奢侈品方面的问题也至今没有一个清楚的答案。欧盟司法法院的初步判决应该给予这些问题清晰的回复。

    直到欧盟司法法院初步判决下来，目前的法律现状应该特别建立在纵向限制标准2010（其不具备法律质量并且也不约束法庭，而是规定了指导欧洲委员会对纵向协议进行评估的原则，从而通过原则约束欧洲委员会本身）上：

    1. 全面禁止网络销售很难成立因为网络销售被认为是被动销售（参见纵向限制标准2010，第52段）。几乎没有一个批准是限制网络商店语言的因为这并不能改变这种销售的被动性质（参见纵向限制标准2010，第52段）。对互联网销售的营业额的限制也是如此。
    2. 然而，允许必须是，特别是
    • 对电子商务平台设计的定性要求（不造成全面禁止和不限制语言的使用）
    • 对在独占区域，或对供应商的独家客户群，或由供应商分配的另一个买家积极销售的限制（VBER第四条b款（i）项），比如在第三方网站上的区域性横幅（参见纵向限制标准2010，第53段）。
    • 成为供应商选择性分销网络成员的一般定性限制，例如要求分销商有一个或者多个实体店或陈列室（纵向限制标准2010，第54段，176）

    欧盟法院的判决将更加清晰——Legalmodo会持续更新科蒂德国案和其他对于网络分销有可能的影响。

    Agency agreements

    Agency Agreements are regulated by the Agency Agreements Law 12/1992 (which has transposed Directive 86/653/EEC into Spanish law).

    The main characteristic of the agency agreement is that through this an individual or a legal entity (the Agent) agrees with the Principal on a continuous or regular basis and against payment of a consideration to be agreed, to promote commercial acts or transactions for the account of such Principal not assuming the risk and hazard of such transactions, unless otherwise agreed.

    Commercial relationship: Agents are independent intermediaries who do not act in their own name and behalf, but rather for and on behalf of one or more Principals.

    There is no labour but commercial relationship between the Principal and the Agent.

    It is presumed that the agency relationship is as a matter of fact. On the contrary, there is a labour relationship when the agent in not entitled to organize by his own his business activity nor to fix its own timetable.

    Agents Obligations: Agents must, on his own or through his employees, negotiate and, if required by contract, conclude on behalf of the Principal, the business and transactions he is instructed to handle. Agents are subject to a number or obligations, including the following:

    • An agent cannot outsource his activities unless expressly authorized to do so.
    • An agent is authorized to negotiate agreements or transactions included in the agency agreements, but can only conclude them on behalf of its principal when expressly authorized to do so.
    • An agent may act on behalf of several principals, unless the related goods or services are similar or identical, in which case express consent is required.

    Main obligations of the Principal are:

    • To act loyally and in good faith in its relations with the agent.
    • To provide the agent with all the documentation and the information which he may need to develop his activity.
    • To pay the agreed consideration.
    • To accept or reject transactions proposed by the agent.

    The agency agreement must always be remunerated/paid. The consideration may consist of a fixed amount, a commission or a combination of both.

    Indemnity: the agent is entitled to:

    1. A damages and prejudices indemnity if the contract is terminated by the Principal without cause (not to apply when the termination takes place at the end of the agreed Term).
    2. A compensation for clientele/goodwill if the contract is terminated without cause or terminated through expiration of the agreed term provided the agent has contributed with new clients to the Principal business or increased the transactions with the Principal client portfolio and provided that the Principal can benefit in the future of such activity from the agent. Such compensation cannot exceed the average of the payments/commissions received by the agent throughout the last five years or throughout the contract effectiveness if the duration has been below five years.

    Non Competition:  non-competition provisions (i.e., provisions restricting or limiting the activities that can be carried out by the agent once the agency agreement has been terminated) have a maximum duration of two years from the termination of the agency agreement and must be: agreed in writing, limited to the geographical area where the agent has been trading and related to goods or services object of the agency agreement.

     

    ————————————-

    Need help with your International Distribution Contracts?

    Click the button below to Receive Support from our Expert Lawyers thanks to the Online Help Desk

    ————————————-

    Distribution / Concession agreements

    There is not a specific regulation for distribution agreements; therefore the Civil Code general contract regulation applies. Through this type of contract the Distributor undertakes toward the Principal – on a continuous or regular basis and against payment of a consideration to be agreed – to promote commercial acts or transactions for the account of such Principal, but assuming the risk and hazard of such transactions.

    In practice, distribution agreements are often confused with agency agreements. Nevertheless, they are different and have distinct regulations and characteristics.

    1. Under a distribution agreement, the distributor undertakes to purchase goods belonging to the other party for resale. While under the agency agreement the agent is paid a commission but not purchases and resales.
    2. Under the distribution agreement the Distributor assumes the entire risk of the transaction while under the agency agreement the risk remains with the Principal.

    Commercial relationship: under the distribution agreement the link is completely commercial; the risk of a labour relationship being declared is much lower than under the agency agreement due to the fact of the Distributor higher independency and autonomy.

    The distribution agreement may be granted under an exclusive or non-exclusive basis. The exclusive may work on both sides: the distributor could be contractually liable to only work with the principal (or not) and the Principal could be contractually bound to only work with the distributor on a given territory.

    Parties Obligations: while the Agency Agreement is governed through the Agency Agreements Law (which includes mandatory rules), Distribution Agreements are subject to the Civil Code and therefore the “freedom principle” applies in order to set forth the parties obligations regime.

    The Distributor is not paid by the Principal. He makes his benefit through the difference between purchase and sale price.

    Indemnity: although the clientele/goodwill indemnity only applies to the agency agreements, the Supreme Court has in various sentences decided that the Distributor could have the right to be paid such an indemnity provided similar provisions as those stated at the Agency Agreements law (see above) where met on an analogy basis.

    Non Competition:  non-competition provisions (i.e., provisions restricting or limiting the activities that can be carried out by the distributor once the distributor agreement has been terminated) are valid provided that they are expressly agreed through the agreement and its reasonability can be defended and sustained (in terms of territory, term and consideration).

    Commission agency agreements

    Through this type of contract, the commission agent undertakes to perform or to participate in a commercial act or agreement on behalf of the Principal.

    Commission agents may act:

    • In their own name, acquiring rights against the contracting third parties and vice versa or
    • On behalf of their principal, who acquires rights against third parties and vice versa

    Obligations of commission agents:

    1. To protect interests of the Principal as if they were their own and to perform their engagement personally. Commission agents may delegate their duties if authorized to do so and may use employees at their own liability.
    2. To account for amount that they have received as commission, to reimburse any excess amount and to return any unsold merchandise.
    3. Commission agents are barred from buying for their own account or for the account of others, without the consent of their principal, the goods that they have been instructed to buy.

    Commission: The principal undertakes to pay a commission to the commission agent, usually linked and only accrued if the Transaction is closed.

    Differences and similarities between agency agreements and commission agency agreements.

    • Main similarity: In both cases, and individual or legal entity undertakes to pay another compensation for arranging a business opportunity for the former to conclude a legal transaction with a third party, or for acting as the former’s intermediary in concluding the transaction.
    • Main difference: Agency agreements involve an engagement on a continuous or regular basis, whereas commission agency agreements involve occasional engagements.

    Franchise Agreements

    Franchise Agreements are governed through (i) the Law 7/1996, of January 15, regulations retail trade, regarding the basic conditions for the franchise activity and creating the Register of Franchisors; (ii) Royal Decree 201/2010, of February 26, regulating the exercise of the commercial activity under a franchise arrangement and the communication of information to the Register if Franchisors; and (iii) Royal Decree 378/2003, which refers to Regulations (EC) No. 2790/1999, of December 22, 1999, relating to the application of Article 81(3) of the Treaty to certain categories of vertical agreements. Through the Franchise Agreement the franchisor grants a right to, and imposes an obligation on, its individual franchisees, for a specific market, to pursue the business or commercial activity (sale of goods, services or technology) previously carried out by the Franchisor with sufficient experience and success, using the knowhow, system, trademarks, IP rights etc. defined by the Franchisor.

    The Franchise Agreement entitles and obliges the Franchisee to use the brand name and/or trade or service mark for the goods and/or services, the know-how and the technical and business methods, which must be specific to the business, material and unique, the procedures and other intellectual property rights of the Franchisor, backed by the ongoing provision of commercial and technical assistance under, and during the term of, the relevant franchising agreement between the parties, all of the above regardless of any supervisory powers conferred on the Franchisor by contract.

    Formalities: In Spain, prior to start franchising activities, Franchisors must register in a public administrative Register of Franchisors.

    Although the very short regulation of the Franchise Agreement leaves ground for the freedom principle, usually the franchisee pays a royalty to the Franchisor (commonly linked to the volume of sales but could also be a fix royalty), and a publicity royalty (so as to contribute to the Principal publicity cost of which the franchisee benefits).

    Non Competition: throughout the life of the agreement, non-competition clauses (reciprocally) are common and admissible; after the termination of the contract, the Spanish Court usually admits the validity of the one year non-competition clause but limited to the location where the franchise had been working.

    用于约束解决双方争议的方式、规定相关适用法律的契约条款通常被称为“午夜条款”。在许多契约案例中，此条款通常被书写在契约的最末几段，以至于在谈判即将结束时才被讨论，通常此时已是深夜，双方都已精疲力竭，决定在契约上签字。

    以上情况通常有两种：第一，在仓促、不谨慎的情况下作出决定。双方相信已在契约重要的问题上达成协议，所以对如何解决争议不够重视。

    第二种情况则是相反：双方就管辖权所属法院及适用法律产生矛盾。双方都坚决地要求在自己的国家实施管辖权并适用该国法律。但是，此情况大多因为原则问题和国内外的标准差别问题，而不是因为双方了解问题的实际重要性。

    上述两种情况都是棘手的，因为双方都将自己置于风险中：可导致做出错误的决定或无奈地妥协，并且可能会使将来采取的法律行动无效。

    所以，必须足够重视并慎重地考虑该条款：通过阅读以下几点思考，牢记在慎重选择契约的司法管辖权和适用法律的同时，保留对另外一篇主题与本文主题同样重要的文章——对仲裁结果进行预知的讨论。

    1）中国法官不再是禁忌

    在过去很长一段时间，外国人害怕与中国法官接触，因为中国法官曾大多是来自其他公共管理部门的国家公务员。在他们眼中，中国法官被政治化，公正性受到质疑而且一般相当无能。但是今天，至少在被国际投资覆盖多年的城市，情况已经发生变化：司法水平有了明显提高，可独立计算诉讼成本，初审耗时很短（约6个月），并且很大程度上判决公正，特别是在得到合格律师辩护的情况下。因此，考虑到未来可能发生的情况及争议，在起草契约时提出中国司法管辖权是非常必要的。

    2）资产在何处？

    判决执行的地点是决定司法管辖权最重要的因素。在起草契约时预见在商业关系中可能产生的纠纷，以及将在哪里执行判决（中国或是意大利），都是十分必要的。

    在大多数情况下，中国缔约方（以下简称中方）的资产（商品和应收账款合计）仅在中国境内。如果判决有利于外方，那么几乎可以肯定，该判决将不会被积极执行。因此，在中国执行强制执行程序是必要的。出于此原因，若在契约中规定意大利司法管辖权将会适得其反：首先需要在意大利进行耗时很长的诉讼，之后意大利法院做出的判决需要在中华人民共和国得到承认：虽然两国在1991年签订了民事司法互助条约，但是此过程非常官僚，需要判决书等所有文件的中文翻译及公正、认证。并且在承认的过程中，中方会尽全力拖延判决的承认并使其复杂化。

    若耗时若干个月的裁定结果为“不可在中国执行判决”，那么外方将会上诉至中国法院。若如此，则会耗时若干年，并将承担更高的成本和苦涩的惊喜：在程序结束时，中方消失或破产，或没有资产可供执行。很不幸，上述情况是普遍存在的。

    3）证人、鉴定报告及文件

    另一个重要的因素涉及到契约的性质和缔约双方的行为地点。若合约义务在中国执行（例如商店的管理、代理商或经销商进行促销活动或供应/组装产品），则在中国法院进行诉讼的调查、证人的听证会以及相关专家以举证为目的，对产品的核证以及必要文件的分析相对简单许多。若在上述情况下由意大利法庭进行上述操作，将及其困难，并且显然是反经济的。反之亦然。

    4）同样的法院，同样的法律

    当在不可依据第三国法院及第四国法律的情况下，打破谈判僵局的折中方法通常是选择缔约方中一方国家的法院及另一方国家的法律。

    此类的“创意”方案必须尽量避免，特别是避免选择中国司法管辖权。此做法的好处是，受理的法院是缔约双方所属国家的其中一个（理想情况下可以执行判决，如上所述），可以在法律的框架内，选择熟悉的法院及律师进行诉讼。但是，必须依据双方指定的外国法律（很少达成一致），或者任命一名专门针对该问题的法律专家顾问。最终导致诉讼程序更加复杂，耗时更久，成本显著增加。

    5）预防措施

    还有一种无法等待普通上诉程序，而是迫切需要法院立刻进行保护的紧急情况：最典型的案例是被授权人或加盟商与授权人或制造商进行不正当竞争，销售仿冒品或者在契约结束之后拒不向生产商或授权人归还商店或材料。

    在此情况下，利益被侵害方向中国法院申请旨在结束非法行为的保护程序及执行紧急措施至关重要：若契约规定由中国司法管辖或仲裁，而契约中却存在关于意大利司法管辖（即防止在中国进行预防性保护上诉）的条款，则后果非常严重——无法及时有效地在中国采取限制严重损坏商誉和形象行为的行动。

    There are two ways to enter and do business in the Dominican Republic: By establishing a separate Dominican business entity (“subsidiary”) or by registering a branch of a foreign company (“branch”). In addition, business relationships may be set up under a commercial contract in form of a joint venture, agency, distribution or similar agreements that comply with Dominican Republic legal and regulatory requirements, for the recognition and validity of business entities and commercial agreements.

    Another option consists of a Consortium agreement between foreign and Dominican companies intended to execute projects in which the Dominican State participates.

    ESTABLISHING A DOMINICAN SUBSIDIARY

    Usually start-up and medium business entities in the Dominican Republic are incorporated as a Limited Liability Company or Sociedad de Responsabilidad Limitada (S.R.L.). The Sociedad de Responsabilidad Limitada or S.R.L. is the most common and efficient form of organizing a company in the Dominican Republic and is often chosen by large foreign companies as the legal form for their subsidiaries.

    S.R.L.’s offer the following advantages: The partners receive limited liability, meaning that they only respond for company debts up to the limit of their contributed capital. Shareholders can be legal persons or individuals. SRL’s is manager managed with no board of directors required; managers must be individuals, and can be Dominicans or foreigners. Company can attract capital through the issuing of new shares which may be ordinary or preferred shares.

    SRL’s may effectuate any type of activities that are legal in trade and there are no restrictions in the Dominican Republic on the legal currency. The United States Dollar is exchanged freely with the Dominican Peso, as well as any other currency.

    SRL’s also serve as a holding company and may keep assets as their property, contributed by the partners or acquired by the same, both national and international, movable and real estate properties.

    SRL can outlive their founders. Their quotas may be freely transferred among partners, by way of succession, in case of liquidation of marital community assets, among ascendants and descendants under the rules established in the By Laws.

    The main steps in establishing a Dominican Limited Liability Company (SRL) are the following:

    1. Make a search before the Dominican Trademark Office, draft and file the request registration to obtain a trade name for the Dominican Company.
    2. Draft by-laws, minutes of incorporation meeting and related incorporation documents. These may be drafted as private documents or as a notary public act for signing by the partners and managers for legalization by notary public;
    3. Pay the incorporation taxes of one percent (1%) of the company’s registered capital before the corresponding Dominican Tax Administration (DGII);
    4. Prepare the business register application and file it along with the corresponding company incorporation documents after payment of business registration fee to obtain the company’s business registration certificate;
    5. Prepare and file the request to obtain the company’s Tax Identification Number (RNC);
    6. Register at DGII’s web page to obtain access and request fiscal invoice numbers (NCF);
    7. Enroll employees before the treasury of social security (TSS) and the ministry of labor.

    The following schedule serves as a guidance of the time required to form a new Dominican Company:

    Register of company trade name 5 to 7 days
    Drafting incorporation documents plus 2 to 5 days
    annexes (Incorporation Meeting, By-laws, Business Register application)
    Paying incorporation taxes on capital less than 1/2 day
    Incorporation Meeting of shareholders less than 1/2 day
    Legalizations by Notary Public less than 1/2 day
    Registration in Business Register 2 to 5 days
    Registration as Tax Contributor (RNC) 10 to 15 days

    The following founding documents are needed to form the company:

    1. Business Register request of registration form for Dominican Company, duly signed by the person that is authorized by the company or by an empowered attorney, for which a copy of the power of attorney shall be provided.
    2. By- Laws/Articles of Incorporation in private or notary act form containing the details required in legislation (including company name, registered domicile and purposes.
    3. Attendance List and Minutes of the Incorporation Meeting.
    4. Updated List of Partners/ Shareholders
    5. Report of the Commissary of Contributions, if applicable.
    6. Receipt of payment of the tax on the incorporation of legal entities.
    7. Photocopies of the Dominican Identity and Electoral Card and if foreign, Passport photo page or other official document with visible photo from the country of origin for the partners, managers and account commissary.
    8. Copy of the Trade Name Certificate issued by the Dominican Trademark Office.
    9. Declaration of acceptance of the appointments by the managers if this is not apparent from the by-laws and minutes of the incorporation meeting.

    REGISTERING A DOMINICAN BRANCH

    Foreign companies interested in doing business in the Dominican Republic (DR) may register a branch in the DR. Under Dominican law, a registered foreign company branch office can enter into contracts and execute and settle transactions in its own name, and can sue and be sued at its place of business.

    In order to successfully complete a DR branch registration, the foreign company documents shall prove its valid incorporation and existence, contain all general and specific information as well as proper authorizations; corporate documents shall be certified, notarized and duly legalized by all applicable foreign and local authorities according to local and international law. The Dominican Republic is a member of the 1965 convention of The Hague or Apostille.

    The registration of a foreign company branch before local authorities will enable the owners of the foreign entity to conduct business in a similar way and equal rights as a DR business entity.

    Branches of foreign corporations are in general treated the same way as legal entities for tax purposes. They are however not subject to issuance stamp tax upon formation. Profits of a Dominican branch office are exempt from taxation (Dominican withholding tax) in the partner-nation under the double-taxation agreements which Dominican Republic has signed.

    To register a branch in the DR, it is necessary to provide certified company incorporation, shareholder and manager verification and a power of attorney to qualified attorneys who will draft, prepare and file the request of branch registration at the business register and request a Taxpayer Identification Number (TIN) in the Dominican Republic.

    Usually, the registration of a branch to pursue general, unregulated and taxed commercial activities may be accomplished by pursuing the following:

    1. a) Business Registry: The Company should be registered in the Business Registry of the Chamber of Commerce where its local domicile will be located. A registration fee is calculated based on the authorized capital. In order to obtain this registry, the company must file all documents which evidence its proper incorporation in the home country and that representatives are fully authorized to register the foreign company branch.
    2. b) TIN: Issued by the Tax Administration. It is a number that shall serve for identifying the business’s taxable activities and for the control of the duties and obligations derived therefrom. To obtain such registration, the company shall file copy of the Business Registry and the corporate documentation that may be required by such Tax Administration. It shall also present a valid corporate domicile in the DR which may be subject to verification.

    USING DOMINICAN COMMERCIAL AGENTS AND DISTRIBUTORS

    A foreign supplier of goods and services may choose to enter the Dominican market by selling his/her products through Dominican agents and distributors or representatives. The different channels of selling are subject to different legal frameworks.

    Contracts involving Dominican agents and distributors are generally governed by the Civil Code of the Dominican Republic, whose freedom of contract principle allows the parties to choose freely the form, terms and conditions of their agreement as well as by the Code of Commerce and general commercial practices and rulings interpreting the scope of agency, unless said agreement is registered under Law 173 Protecting Importing Agents of Merchandises and Products of April 6, 1966, as amended (“Law 173”).

    Local agents and distributors often want to register their Agreements with foreign enterprises under Law 173, while foreign companies that do not have a free trade agreement with the Dominican Republic, are often unaware of this possibility and without adequate previous legal counsel, may later find out a Law 173 registration has been made.

    Once registration has been obtained, the relationship of the local licensee (a.k.a. “concessionaire”) with its grantor becomes governed by the provisions of Law 173 of 1966, which provides the local concessionaire with the following rights:

    • The right to initiate legal actions against the grantor or a third party for the purpose of preventing them from directly importing, promoting or distributing in Dominican Territory the registered products or services of the grantor;
    • The right to file suit for damages against both the grantor and any new appointee for substitution of the local concessionaire, including the right to be indemnified for unjust termination in accordance with the formula and for the concepts provided by Article 3 of Law 173.
    • The right to an automatic renewal of the contract or a mandate of continuation of the relationship existing thereof, even if the termination clause of a registered contract provides otherwise.
    • Unilateral termination by the grantor of the local concessionaire’s rights under Law 173 of 1966 is only possible if made for a “just cause”, pursuant to the definition of just cause provided by Law 173 of 1966.
    • The Law provides exclusive jurisdiction to the courts of the Dominican Republic.

    Law 173 protects Dominican agents and distributors of foreign enterprises. Its objective is to protect exclusive and non-exclusive agents, distributors and representatives from being unilaterally substituted or terminated without just cause by foreign entities, after favorable market conditions have been created for them in DR.

    Law 173 defines as grantor the individuals or legal entities who the Dominican agents and distributors (i.e. concessionaires) represent, who conduct business activities in the interest of the grantor or of its goods, products or services, whether the contract is granted directly by grantor, or by means of other persons or entities, acting in grantor’s representation or in their own name but always in its interest or of their goods, products or services.

    The author of this post is Felipe Castillo.

    Agency (regulations, duration, termination, indemnities – if any)

    Instead of direct distribution (by setting up a branch, a subsidiary or via e-commerce), one can also distribute ones’ products and / or services indirectly. Indirect distribution especially includes agents, distributors, franchisees or commission agents.

    Self-employed commercial agents solicit customers and can (but do not have to) have the authority to conclude a contract on supplier’s behalf. The supplier sells directly to end customers and bears the distribution risk, but may also control the margins. Contrary to employees, the agent’s remuneration (“commission”) can be exclusively profit-oriented, i.e. remunerated only in case of successfully soliciting customers, and in relation to the turnover. Commercial agents have to provide detailed market reports. If the commercial agent acts in the EU, protective agency law applies, including the indemnity claim.

    An agent would be treated as a supplier’s employee if the agent does not act independently. An agent acts independently if the agent – according to the overall picture of contractual rules and factual activity – freely organizes his activities and working time (sec. 84 (1) 2 HGB). This goes mutatis mutandis for other types of distribution partners. The treatment as employee especially has the following consequences:

    • employee protection, e.g. limited right of termination under Dismissal Protection Act;
    • continued payment of salary during public holidays, illness and holidays;
    • minimum wage under Minimum Wage Act of 11 August 2014;
    • obligation to pay contributions to social security;
    • income tax on salary;
    • adherence to worker participation and collective bargaining agreements if applicable.
    • exclusive competence of labour courts if the employee has, during the last 6 months of activity, earned an average amount which does not exceed EUR 1,000 per month.

    ————————————-

    Need help with your International Distribution Contracts?

    Click the button below to Receive Support from our Expert Lawyers thanks to the Online Help Desk

    ————————————-

    Agency contracts are governed by sec. 84–92c German Commercial Code (HGB). The commercial agent is, next to the employee, strongly protected, e.g. by mandatory rules on remuneration, minimum notice periods, and goodwill indemnity. As regards remuneration, the agent is entitled to

        • “del credere commission” if the agent assumes liability for fulfilment of businesses (sec. 86b HGB);
        • an advance on commission once the principal has performed its obligation (sec. 87a para. 1 HGB);
        • accounting within maximum periods of three months (sec. 87c (1) HGB);
        • commission irrespective of delivery and payment, unless the principal is not responsible for non-delivery (sec. 87a ( 3) HGB);
        • request information, statements of account, an excerpt from the books, and inspection by an auditor (sec. 87c HGB).

    These rules are mandatory and cannot be contracted out. Further details on the payment of commission (if not agreed otherwise) are set in sec. 86b et seq. HGB.

    Besides, both parties have to safeguard each other’s interests (sec. 86, 86a, 90 HGB and sec. 242 BGB). Theagent is especially obliged to

      • check the customers’ creditworthiness,
      • inform the supplier immediately about any business procured,
      • keep confidential any information obtained during his activity, and
      • abstain from acting for the supplier’s competitors.

    Agency agreements can be terminated without cause if contractually agreed. However, mandatory notice periods have to be observed, staggered pursuant to the contractual term: from one month in the first year to six months after five years (sec. 89 ( 1) HGB). The notice periods cannot be shortened, and, in case of extension, the supplier’s notice period must not be shorter than the agent’s one (sec. 89 (2) HGB). A cause is only required if the agreement is terminated without notice period (sec. 89a HGB). It is given if the terminating party cannot reasonably be expected to continue the relationship until ordinary termination (considering all circumstances of the single case and weighing the interests of both parties).

    The agent is entitled to indemnity if the agent has brought new customers or has significantly increased the business volume with existing customers, which results in benefits for the principal, and if such payment of indemnity is equitable under the given circumstances (sec. 89b HGB). Indemnity is calculated on basis of the commission earned during the last 12 months of activity, earned with new customers, and existing customers towards whom the agent has substantially increased the sales. Indemnity is capped to a maximum of the past five year’s average annual commission (sec. 89b HGB). The claim cannot be waived before termination, but is excluded if the agent has not notified the principal within one year following termination. Indemnity is not payable if

    • the agent terminated the contract (unless justified by circumstances attributable to the principal or because of the agent’s age or illness),
    • the principle has terminated the contract because of default attributable to the agent (which would justify immediate termination for cause), or
    • the agent, with the principal’s agreement, assigns and transfers its rights and duties under the agency contract to another person.

    Indemnity cannot be contracted out, unless the agent acts outside EEA (sec. 92c HGB).

    Antitrust law does generally not apply to the agent-relationship, provided that the principal bears the commercial and financial risks related to selling and purchasing the products or services (Guidelines on Vertical Restraints of 10/05/2010, para. 12 et seq., 18, 49). Therefore, suppliers can control the price for which they sell the products / services via agents. Special limits apply only to post-contractual non-compete-obligations if concluded before termination. They must be limited to a two-year-maximum, to the agent’s territory or customers, and to the contractual products or services. Further, they must be done in writing and delivered to the agent. The principal has to pay an indemnity for the non-compete obligation’s term (sec. 90a HGB).

    Generally, the parties are free to choose the applicable law (art. 3 Rome-I-Regulation). If, however, all elements relevant for the choice of law are located in another country than that of the chosen law, the choice of law shall not prejudice the provisions which cannot be derogated from by agreement (art. 3 (3) and (4) Rome-I-Regulation).

    Overriding mandatory provisions of the forum’s law cannot be avoided by choosing another law. The courts may also give effect to overriding mandatory provisions of the country where the contractual obligations have to be performed (cf. art. 9 Rome-I-Regulation). Overriding mandatory rules are especially most of the protective agency law provisions. If, therefore, the agent acts within the EU, the agent’s claim for goodwill indemnity (based on the EU Directive on self-employed commercial agents of 1986) can hardly be contracted out – even if the parties choose a foreign law (cf. European Court of Justice, decision of 09/11/2000 [“Ingmar”], concerning, however, the former Rome Convention on Law Applicable to Contractual Obligations of 1980). Arguments against applying the same principles under the Rome-I-Regulation exist, but there is yet no case law which favors such interpretation.

    Generally, the parties are free to choose a court, especially if

    Besides, the parties may also choose arbitration (sec. 1029 et seq. ZPO, and art. 1 (2)d Brussels-Ia-Regulationand art. 1 (2)d Lugano-II-Convention).

    However, a choice of court or arbitration can hardly avoid overriding mandatory provisions, as ruled by the Higher Regional Court in Munich (decision of 17/05/2006), and confirmed by the BGH (decision of 05/09/2012).

    Suppliers and distribution partners are free to use any means of dispute resolution, especially out-of-court-negotiation, mediation, arbitration, litigation. Restrictions exist only insofar as overriding mandatory provisions can hardly be avoided by means of dispute resolution (see above). Suppliers and distribution partners can expect fair treatment in German courts since the judges are well-trained, have been determined beforehand, and the parties are entitled to due process of law (art. 101, 103 German Constitution). Advantages of resolving disputes in Germany are (inter alia) that court rulings are quite foreseeable and that court proceedings are quite quick (8.2 months for proceedings in the district courts according to the latest statistics).

    Distribution or Concession of sale

    Distributors buy and sell products on their own behalf. Consequently, they bear distribution risks, and, in return, gain profit from the difference between purchase and resale price, while suppliers’ margins are rather low. The distributor is obliged to market and distribute the supplier’s products, and to safeguard the supplier’s interests. Distributors are less protected than commercial agents (exceptions: see below). The supplier is obliged to assist and take care of his distribution partner, subject, however, to the supplier’s economic freedom.

    Distributorship contracts are – as in most EU member states – not explicitly regulated by statutory law. However, there is extensive case law, e.g. whether the supplier has to take back products unsold at termination of contract. Agency law applies by analogy if the distributor is:

    • integrated into the supplier’s sales organization; and
    • obliged (due to agreement or factually) to forward customer data during or at termination of contract.

    Further, distributorship contracts have to conform to antitrust law. Generally, the antitrust law of any affected market applies (art. 6 (3a) Rome-II-Regulation). Agreements which aim at or result in restraints of competition are prohibited by antitrust law, namely by the German Act Against Restraints of Competition (“GWB”) andart. 101, 102 Treaty on the Functioning of the EU (“TFEU”). Unless agreements contain hardcore restrictions, asafe harbor is provided by the De Minimis Notice of 30/08/2014 and the Vertical Block Exemption Regulation no. 330/2010 [“VBER”]). Hardcore restrictions are generally prohibited, regardless of the parties’ market shares, especially price fixing, restricting the geographic areas or categories of customers, or cross-supplies between distributors within a selective distribution system. If one party’s market share exceeds 30%, any restriction of competition can only benefit from the individual exemption under the strict criteria of art. 101 (3) TFEU(“efficiency defense”). Here are the most relevant types of clauses.

    As regards non-compete-obligations, they are enforceable if they conform to antitrust law:

    • Such agreements between non-competitors are safe if each party’s market share does not exceed 15% on any relevant market affected. If one party’s market share exceeds 15%, but none exceeds 30%, a non-compete-obligation during the contractual term is valid if limited up to 5 years at most. Where products are sold on premises owned or leased by supplier from third parties, the five-year maximum does not apply. However, the non-compete obligation cannot exceed the term the buyer is occupying the premises.
    • After the contractual term, a non-compete obligation where one party’s market share exceeds 15%, but none exceeds 30%, is valid if it is necessary to protect know-how transferred to the distributor, and if limited to competing products, the concrete distributor’s premises, and a 1-year-term.

    A supplier can generally not fix a resale price or price level at which its distributors or franchisees resell (except for suppliers that manufacture newspapers, magazines and books, sec. 30 GWB). An agreement or behaviour that aims at establishing such resale price maintenance is treated as hardcore restriction and thereforegenerally void (cf. Guidelines on Vertical Restraints of 10/05/2010, para. 48, 223). By way of – rare – exception, the supplier can plead the efficiency defense (e.g. when introducing a new product or a coordinated short term low price campaign).

    However, resale prices can be influenced by recommending resale prices or setting maximum resale prices:Recommending resale prices or setting maximum resale prices is exempt from antitrust law if the parties’ market shares do not exceed 30% (beyond, there is only room for the efficiency defense), and only if it does not result in a minimum or fixed sale price because of pressure or incentives from one party (art. 101 (1) TFEU andart. 4 (a) VBER).

    Establishing a minimum advertised price policy is exempt if it works as mere recommendation. If, however, it results in minimum resale prices or a fixed or minimum price level, it can only be exempt under the efficiency defense.

    By contrast, a supplier shall not announce not to deal with distributors or franchisees that do not follow its pricing policy because it will be treated as fixing the selling prices (see above).

    Most-favored nation or most-favored customer clauses are those which specify that the supplier’s price to the distributor will be no higher than its lowest price to other customer. Such clauses are enforceable if agreed between non-competitors and if none of the parties’ market shares exceeds 30% (beyond, there is only room for the efficiency defense).

    The distributor on its side can generally charge different prices to different customers because of freedom of contract. However, a seller

    • may have to charge the same prices if it holds a dominant or similarly strong market position(sec. 19, 20 GWB and art. 102 TFEU);
    • may generally not charge different prices on grounds of race or ethnic origin. The same goes ongrounds of sex, religion, disability, age or sexual orientation if the respective sales contract is typically concluded without or with low importance of the buyer’s person, especially in “bulk business”. An exception exists if different treatment is based on objective grounds, especially where it serves to avoid threats, prevent damage etc. (sec. 19, 20 Anti-Discrimination Act, “AGG”).

    A supplier may not restrict the territory into which, or the customers to whom its distribution partner sells (art. 101 (1) b TFEU). Exempt are, however, restrictions of:

    • active sales into the exclusive territory or an exclusive customer group reserved to the supplier or another distribution partner;
    • sales to end users if the distribution partner operates at wholesale level;
    • sales from members of a selective distribution system to unauthorised distributors in the system’s territory; and
    • selling components, supplied for incorporation, to customers who would use them to manufacture the same kind of products (art. 4 (b) VBER).

    Active sales mean actively approaching individual customers (e.g. by direct, unsolicited mail, e-mail, visits) or a customer group in a specific territory trough promotions specifically targeted at that group. Passive sales mean responding to unsolicited requests from individual customers, including general advertising which reaches customers in other exclusive territories or customer groups if done reasonably. This also applies to the internet: sales via webshops cannot be excluded. A supplier may only, however, require its distribution partner to fulfil certain quality standards, especially in selective distribution (Guidelines on Vertical Restraints of 10/05/2010, para. 51, 54).

    At the end of the distribution chain, consumer protection laws apply, namely between the seller and the buying consumer. Statutory law grants a 2-year-warranty that products are free from defects at the passing of risk. In case of defect, the buyer is entitled to claim subsequent performance (remedy of defect or delivery of a defect-free product), alternatively price reduction or withdrawal (all regardless of fault), and, damages, provided that the seller has acted with fault (sec. 437, 280 et seq. BGB). Though fault is generally assumed by law, the seller can exculpate itself, especially if the seller has not manufactured the good (but its sub-supplier). Towards consumers, these rights cannot be contracted out (sec. 474, 475 BGB). Each seller within the distribution chain is entitled to have recourse against its own supplier if the product has already been defective at the respective delivery (sec. 478, 479 BGB). In order to maintain these rights, however, the buyer (unless consumer) already has to check at delivery if products are defective, and inform the seller accordingly (sec. 377, 378 HGB).

    Besides, special information duties towards consumers exist in:

    Statutory law also limits the fees which the consumer shall pay beyond for means of payment or consumer hotlines etc. (sec. 312a (3–5) BGB). Finally, the consumer has a right of withdrawal regarding distance and off-premises contracts (sec. 312g, 355 BGB).

    These consumer rights are similar throughout the EU because they are influenced by the EU Directives 1999/44/EC on the sale of consumer goods and 2011/83/EU on consumer rights.

    A supplier may limit the warranty rights granted by statutory law towards its distribution partners. In general, there are few limits to individual agreements: they must not contradict statutory prohibitions (sec. 134 BGB) and public policy (sec. 138 BGB), and must not limit or exclude liability for willful intent, fraudulently concealing defects, where a guarantee has been given, or according to product liability law (sec. 202, 276, 444, 639 BGB). If the product has been found defective at the consumer, and the defect has already been existing between the distribution partners, a limitation of warranty can only be enforced if the supplier provides another compensation of equal value (sec. 478 (4) BGB).

    In standard business terms, however, one may hardly deviate from statutory law – even in B2B-contracts (sec. 310 (1) and 307 BGB). One may only

      •  modify the rules of subsequent performance (time, place, number of attempts);
      • exclude liability for slightly negligent breaches of non-cardinal duties; and
      • limit liability for slightly negligent breaches of cardinal duties to the typical damages foreseeable at conclusion of contract.

    The same goes for warranties provided to each downstream customer, unless the customer is a consumer because a consumer’s statutory rights cannot be contracted out.As regards product recalls, statutory law does not set any requirements. According to case law, a manufacturer must keep its products under surveillance and, when detecting risks for legally protected goods (as health), adopt the necessary preventive measures.Extent and time of such measures depends on the single case, especially the good at risk and the extent of possible damage (BGH, decision of 16/12/2008). Distribution agreements can delineate which party isresponsible for a recall and its costs. Individual agreements are not subject to specific limits. Standard business terms, however, are subject to a strict review in court: they can be unenforceable if they are incompatible with essential statutory principles, if they limit essential contractual rights and duties, if they are surprising or ambiguous (sec. 310 (1), 307, 305c BGB). Therefore, such terms should consider who would typically be responsible for recall and costs, depending on the product (ready-made, or not, etc.).

    Distributor agreements with indefinite term can be terminated (sec. 314, 573, 620 (2), 723 BGB); the notice period depends, however, on the single case, considering also the distributor’s investments. E.g., one-year periods have been accepted in automotive distribution (BGH, decision of 21/02/1995 [Citroën]). In rare cases, antitrust law may demand a renewal of the relationship.

    The distributor can claim indemnity only by analogue application of agency law (see above). The distributor’s indemnity can amount to the distributor’s average annual net margin.As regards applicable law / choice of lawand details on dispute resolution (choice of court, choice of arbitration / mediation), please see above in the section on agents.

    Franchising

    Franchisees buy and sell products on their own behalf. The franchisee acquires licences of intellectual property rights (trademarks and know-how) from the supplier (franchisor) for using and distributing the products or services. The franchisee is entitled and obliged to design its shop according to the franchisor’s concept and corporate design, and use the management-/system-specific know-how. In return, the franchisee pays royalties. The franchisor is precontractually obliged to disclose the key risks and issues for running the franchise, and subsequently often provides assistance on know-how and business.

    Franchise contracts are not explicitly governed by statutory law (unlike e.g. in Italy). They combine elements of licensing, sales, and management of another’s affairs. Generally, agency law applies by analogy (cf. German Federal Court of Justice [“BGH”], decision of 17/07/2002).

    Within franchisee relationships, the same antitrust rules apply as within distributor relationships: generally, agreements which aim at or result in restraints of competition are prohibited by antitrust law, namely by the German Act Against Restraints of Competition (“GWB”) and art. 101, 102 Treaty on the Functioning of the EU (“TFEU”). For details, please see above in the section on distributors.

    Franchise agreements can be terminated according to agency law (mutatis mutandis). However, longer periods can apply in the specific case, e.g. if the franchisee made considerable investments due to the supplier’s product.

    The franchisee can likely claim indemnity based on analogue application of agency law, but this has not yet been ruled out (BGH, decision of 23 July 1997, Benetton). No indemnity, however, can be claimed where the franchise concerns anonymous bulk business and customers continue to be regular customers only de facto (BGH, decision of 5 February 2015).

    Trademark license

    If a company owns a brand or design, such trademark owner can also distribute the product or service bygranting a trademark license to another party (“licensee”). By way of such license agreement, the trademark owner (“licensor”) allows the licensee to make use of its trademark.

    The license agreement should especially cover:

    • the trademark;
    • the goods and/or services which the licensee is entitled to offer under the trademark and details on the use of the trademark (with or on the goods and/or services, promotion material);
    • the territory where the licensee is entitled to use the trademark;
    • any exclusivity of the license (if applicable);
    • royalty (in return for the license);
    • quality control (e.g. approval of samples prior to mass production and audit rights as regards the licensee’s facilities, the raw materials used and the final products);
    • the license’s term; and

    the usual boilerplate clauses (written form, no waiver, severability, choice of law, choice of court etc.).

    Selling via e-commerce (required licences, if any)

    Selling via e-commerce does not require special licenses in Germany. However, certain requirements have to be observed as regards the webshop, especially providing clearly

    • the basic information about the entity behind the webshop (“Contact“, “Imprint” or “Legal Notes”);
    • the terms and conditions of sale; and
    • the privacy policy (it should mention which kind of personal identifiable data [“data”] is stored, how data, cookies and web-tracking are used, and explain the customer’s right to inform about, correct and delete data, cf. sec. 13 German Telemedia Act).

    Relevant anti-trust regulations

    According to the effects doctrine, the antitrust law of any affected market applies (art. 6 (3a) Rome-II-Regulation). Within the European Economic Area (“EEA”), Agreements which aim at or result in restraints of competition are prohibited by antitrust law, namely by art. 101, 102 Treaty on the Functioning of the EU (“TFEU”) and in Germany also by the German Act Against Restraints of Competition (“GWB”). Unlessagreements contain hardcore restrictions, a safe harbor is provided by the De Minimis Notice of 30/08/2014 and the Vertical Block Exemption Regulation no. 330/2010 [“VBER”]). Hardcore restrictions are generally prohibited, regardless of the parties’ market shares, especially price fixing, restricting the geographic areas or categories of customers, or cross-supplies between distributors within a selective distribution system.

    Details are explained above with each kind of distribution channel.

    Javier Gaspar

    业务领域

    • 仲裁
    • 分销协议
    • 特许经营
    • 诉讼
    • 体育
    联系方式 Javier