Korean Distribution Agreements: So you Want to Work with a Korean Distributor

We have noted, on a number of occasions, that the drafting of a Korea-centric distribution agreement and a good deal of due diligence of the anticipated distributor/agent is necessary for avoiding the issues that will require our litigation services.  Some of the articles on Due Diligence matters may be found below:

I have been informed by one of my more frugal of clients that his company would appreciate a basic rundown of a decent distribution agreement (I know you will be drafting this on your own – don’t) – so here we go.

The basic clauses we include in most of our Korean Distribution Agreements are as follows:

  • Exclusivity:  Exclusive/Non-exclusive
  • Territory & Products
  • Term of Agreement
  • Renewal/Termination
  • Pricing & Payment Terms
  • Report Requirments
  • End-User Disclosure
  • Sales Methods Allowed
  • Sales Performance
  • Legal Compliance (FCPA etc.)
  • Competition
  • Warranty/Defects
  • Technical & Sales Support
  • Marketing Materials
  • Intellectual Property – protection of trademarks, copyrights, trade secrets, patents etc.
  • Damages – Liquidated Damages
  • Breach – Material Breach
  • Dispute Resolution -Venue, Arbitration, Choice of Law
  • Standard Clauses related to integration, language etc.

This is a decent start.  Please, however, don’t take this as enough to just start drafting on your own or picking a draft off the internet.  I know many lawyers that screw this up – please get the basics done at the start and you can avoid the hourly rates of my retired judge partner. 

Other articles that may be of interest

    Sean Hayes may be contacted at: [email protected]

    Sean Hayes is co-chair of the Korea Practice Team at IPG Legal. He is the first non-Korean attorney to have worked for the Korean court system (Constitutional Court of Korea) and one of the first non-Koreans to be a regular member of a Korean law faculty. He is ranked, for Korea, as one of only two non-Korean attorneys as a Top Attorney by AsiaLaw.

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