If you have other legal requirements, check out our full list of customizable service contracts for each industry. Other names for this document: Retail Contract, Dealer Agreement Similarly, a supplier can usually make a unilateral decision to cancel or reduce the sale of a product to Retailer C based on the retailer`s discount policies. However, if the supplier`s action follows a complaint by another retailer or previous discussions between the supplier and retailer C about the latter`s pricing policy, the supplier`s act may very well be considered anti-competitive. In addition, in a selective distribution system, distributors are usually prevented from operating in retail stores that have not been authorised by the supplier. However, the selected distributors must be free to supply the contract products to any end user. The usual concern of suppliers is that these platforms exert even greater downward pressure on retail prices, that the presentation of products could fall below the quality standards desired by suppliers, and that it facilitates “parasitism” – which undermines the investments of the supplier and other authorized resellers to improve the quality and image of products. A distribution agreement is a legal agreement between a supplier of goods and a distributor of goods. The supplier can be a manufacturer or even a merchant who resells someone else`s goods. Distribution agreements may conflict with UK and EC competition law, so caution should be exercised when drafting them.

This backgrounder summarizes some of the key considerations to consider when preparing a distribution agreement. Binding enforcement and dispute resolution mechanisms will ensure that the rights of businesses, consumers and individuals are respected. This means that eu and UK companies compete fairly and prevent either party from using its regulatory autonomy to provide unfair subsidies or distort competition. The agreement provides for the possibility of adopting compensatory, compensatory and protective measures. Suppliers and retailers should generally not discuss resale prices with their competitors or disclose details of their current and future resale prices. The agreement of a price element with a competitor constitutes a serious breach of EU and UK competition law and risks civil and criminal penalties. This license to use retail space in a store (concession agreement) should be used when the owner or tenant of a retail store wishes to allow another retailer to trade from the store. As a buyer, you will likely also buy the property or at least take over a lease. Many of these agreements involve the transfer of a lease and/or an agreement to purchase a property.

If the market share of the supplier and the buyer does not exceed 30 %, these restrictions are automatically exempted under the block exemption in the EU Vertical Agreements (EU VABE). In any event, however, RSOs or maximum retail prices may not be disguised as minimum resale prices or fixed resale prices. In particular, retailers must be allowed to resell products at prices below RSOs or maximum resale prices. However, a supplier may issue non-binding RSOs for its products or impose maximum prices beyond which its retailers or distributors may not resell the products, provided that the MSRP or maximum price does not constitute a fixed or minimum resale price due to pressures or incentives. In practice, a competition authority or tribunal is likely to be sceptical of such an argument and to conclude that there is an infringement. In the circumstances described, it may be difficult for an accused to prove his or her innocence. Similar considerations would apply to a situation where information about a retailer`s future prices was transmitted through a competing retailer through a third party, a . B from a common intermediary or supplier. A vertical agreement is concluded between companies operating at different levels of the economic supply chain and includes, for example, agency and franchise agreements and distribution agreements.

Another hot topic is whether suppliers can prevent retailers from selling on online platforms and marketplaces such as Amazon and eBay as well as through price comparison portals. As an indication, a supplier should only discuss the level of RSOs with its retailers in exceptional circumstances. B for example when the supplier introduces a new product range and wants to know how to price it appropriately for the market. Even then, the process must be managed very carefully in the form of a series of independent bilateral consultations between the supplier and each retailer. To reduce this risk, Retailer A should make it very clear in its approach to Supplier B what it wanted and what it did not want from supplier in response. According to Retailer A`s approach, it may be difficult in practice for Retailer A to refute a claim that it initially linked the supplier to that objective. In addition, it is likely to be contrary to competition law if a supplier requires retailers not to advertise a specific price online, or if they have been prevented from promoting online discounts from the supplier`s RSOs. Nor can a supplier impose a complete ban on online sales and cannot discourage or punish the retailer for doing so, for example by charging higher wholesale prices for goods sold online, threatening to suspend deliveries, withdrawing or applying different discounts, or by setting quotas or restrictions on the number of goods that can be sold online rather than offline. It is not uncommon for a retailer (retailer A) to complain to a supplier (supplier B) about the low prices charged by a competing retailer (retailer C) with the intention or hope that the supplier will pressure retailer C to increase its prices or punish C in any way.

The risk that an anti-competitive agreement would be taken for granted would be even greater if the exchange were bilateral. In other words, if retailers A and C had both disclosed their future pricing intentions to Supplier B, in circumstances where each of the retailers intended to pass them on from the supplier to the other retailer in order to influence market conditions, and Supplier B did so. Note: Not suitable for selling shares of a company. Instead, use our sales contracts for these companies. EU and UK competition law generally prohibits an agreement between a retailer and a supplier under which the retailer agrees to resell goods or services at a price: there are different types of distribution agreements. Here are some of the most common examples: Given the increasingly intense price competition that results from selling online, a seller may want to try to control the prices charged or advertised online by their retailers. However, the pricing rules described above apply both to a situation where the retailer sells online and to sales from physical points of sale. While it is common for online retailers to independently use algorithms to monitor competitors` prices and make price adjustments accordingly, automatically or manually, the European Commission has warned that these algorithms should be designed in such a way that they cannot agree and that companies are held accountable for the operation of their automated systems (see separate report). www.out-law.com/en/articles/2017/march/concern-over-collusion-through-algorithms-raised-by-eu-competition-regulator/).

This suggests that online retailers may need to use these systems more cautiously in the future. In addition, if retailer C changes its pricing policy according to the supplier`s approach, it may very well be considered part of a tripartite anti-competitive agreement with retailer A and supplier B. If a distribution agreement contains a “hardcore” restriction, it generally does not benefit from the safe havens created by EU competition law, including the block exemption of vertical agreements. A hot topic is the increasing use of algorithms used by online retailers to monitor competitors` prices and automatically adjust prices to competitors` price changes. Just as it would be anti-competitive for two competing retailers to discuss or agree on actual prices, it would likely be illegal for those retailers to discuss or agree on the algorithms with which they would adjust their respective online prices. Similarly, it could raise competition concerns if competing online retailers outsourced their pricing decisions to the same third-party provider. Imagine Retailer A`s defense that when it complained to Supplier B about Retailer C`s pricing policy, it did not intend for the supplier to act in an anti-competitive manner – even if that supplier did so and even if Retailer A acknowledged that it was reasonably foreseeable that the supplier would respond to the complaint in that way. Are you ready to see your products on the shelf? A dealer contract establishes the business relationship between a wholesaler and a retailer.

With a good dealer agreement, both parties can be. Companies involved in anti-competitive behaviour may find that their agreements are unenforceable and risk being fined up to 10% of their global turnover for particularly harmful behaviour and expose themselves to potential claims for damages by customers. .