What is a distribution agreement and when to use it

A distribution agreement allows a supplier to provide goods to a distributor, who then resells them independently under their own name and responsibility.
This is not franchising or agency, but an independent business relationship.

Typical examples:

• manufacturer appoints a national or regional distributor

• exclusive supply agreements for shops, e-commerce or wholesale

• product launch with a local commercial partner

Legal framework

Distribution agreements are not specifically regulated in Czech law.
They are unnamed contracts under Section 1746(2) of the Civil Code.
They often include elements of purchase, logistics, marketing and exclusivity.

Key elements of a distribution agreement

• Parties and identification of products

• Territory and customer scope

• Order and delivery terms

• Pricing and payment terms

• Marketing duties and brand use

• Quality and defect liability

• Competition and exclusivity clauses

• Duration and termination terms

• Jurisdiction or arbitration clause

Common mistakes

• Misunderstanding the nature of the relationship

• No exclusivity defined (or assumed without basis)

• Undefined brand usage rights

• No mechanism for complaints or product returns

• No reporting, cooperation or marketing support

Recommendations

Supplier:

• Require reporting and minimum purchase commitments.

• Clearly limit the distributor’s rights to brand or materials.

Distributor:

• Secure territory or customer exclusivity.

• Avoid liability for manufacturing defects.

Practice tip

Always clarify IP rights and marketing obligations.
The supplier should define how their logo and content may be used, and the distributor should request proof of product origin and support.

Distribution agreement template – available for a symbolic fee

If you need a basic distribution contract template (manufacturer–distributor), I can send it by e-mail for a symbolic fee.

Ideal for Czech or cross-border B2B partnerships.
For complex networks or brand licensing, I can prepare a custom version.

Just send me a message or use the form – quick and professional.

FINAL THOUGHTS – WHAT NOW?

A distribution agreement isn’t just a formality – it’s a legal shield, if drafted properly. And a trap, if not.

Do you want to be sure your contract will hold up even in a crisis? Get in touch and let’s schedule a meeting.