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Secrets of International Trade

Drafting an Export Agency or Distributor Agreement?


Part 1

Part 2



"When an export contract is made quickly and informally some of the conditions are either assumed or clarified later which may lead to dispute and misunderstanding"


Incoterms is one particular kind of General Standard Conditions... if the exporter and buyer agree on an F.O.B. price -- it has a clear defined Incoterms meaning and is legally binding.


7. Relationship of Parties

  • The Sales Representative agrees to keep the Company notified of any change of ownership, control, or management and agrees not to use anyone other than a principal officer, or regular employee of its firm, to sell the company's products (i.e. no sub-contracting).

  • Acknowledges its legal status as an independent contractor to the Company and not a legal representative or agent and cannot enter into legally binding contracts on behalf of the Company.



8. Expiration or Termination

The contract will expire at the end of the stated period unless renewed by written agreement of both parties.


9. Termination

  • The Agreement may be terminated earlier by 60 days' notice in writing, with or without cause, by either party to the other or if the Sales Representative attempts to assign the Agreement to someone else without written consent.

  • If there is a change in the control or management that is unacceptable or uses the services of anyone unacceptable, if the Representative stops doing business or becomes insolvent.

10. Obligation on Expiration or Termination
  • The obligations of both parties under the Agreement continue with regard to customer orders received before termination or orders received within six months of termination, commission is payable if the order is the result of the Representative's efforts.

  • No other liability exists between the Company and the Sales Representative.
11. Private Information

The Sales Representative agrees to hold in confidence and safeguard all business and technical information that it receives from the Company.



12. Company Trademarks and Trade Names

The Sales Representative agrees to abide by the Company's regulations regarding its trademarks and trade names and agrees not to do anything detrimental to them or the Company's reputation or its products.


13. Limitations of Liability

Neither party is to have any liability to the other party in the contract, except as provided under the terms of the agreement.


14. Release of Claims

The Sales Representative, on signing of the Agreement, releases the Company from any claims it might have.


15. Failure to Enforce

If either party fails to enforce any provision of the Agreement at any time, the exporter still retains the right to do so later on.

16. Notices

These may be sent to the other party by: registered Airmail, telegram, cable, fax, Email or telex at the stated address.


17. Execution and Modifications

This provision states that this is the only and entire Agreement between the parties when duly executed with regard to sales representation in the specified country.

It also states how the Agreement may be modified, if and when necessary.


Part 1/ 2
How to Draft an Export Agency Agreement? Key Points of an Export Agency Agreement

Part 2/2 <This Page
Obligations on Expiration and Termination. Neither party is to have any liability to the other party in the contract

Recommended further reading...

Export sales contract can be informal or formal, depending on the foreign buyer.

Incoterms standardized contract terms that permit the parties to refer to a pre-established set of rules that can be incorporated into the contract or agreement.


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