Law Applicable to Exclusive Distribution Agreements

Exclusive distribution agreements allow manufacturers to enter foreign markets through a single distributor who buys the goods in its own name and resells them in a defined territory. Our Turkish article examines how such agreements are treated under Turkish private international law.

The article first sets out the main features of an exclusive distribution agreement: its continuing nature, the distributor acting in its own name and for its own account, the distributor's role in promoting the manufacturer's products and the exclusive right granted for a specific territory. It then distinguishes these agreements from similar arrangements such as agency, dealership, commission and franchising.

It goes on to discuss the validity of exclusive distribution agreements under Turkish law, including freedom of contract and its limits, form requirements and the possibility of an agreement being formed tacitly, as well as the rights and obligations of the manufacturer and the distributor.

Finally, it considers which law governs an exclusive distribution agreement with a foreign element. As the governing law affects matters such as termination and compensation, it is advisable to agree on it clearly in the contract.

This is a short English summary of our article published in Turkish.