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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 following is, only, intended to be a guide for a client reviewing a distribution agreement that was drafted by a Korean-based attorney.
The basic clauses we include in most of our Korean Distribution Agreements are as follows:
- Exclusivity: Exclusive/Non-exclusive
- Territory & Products
- Term of Agreement
- Pricing & Payment Terms
- Report Requirements
- End-User Disclosure
- Sales Methods Allowed
- Sales Performance
- Legal Compliance (FCPA etc.)
- Return Policies
- Technical & Sales Support
- Marketing Materials & Press Releases
- Intellectual Property – protection of trademarks, copyrights, trade secrets, patents etc.
- Damages – Liquidated Damages
- Breach – Material Breach and ramifications for Breach
- Dispute Resolution -Venue, Arbitration, Choice of Law
- Terms of Sales
- 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. Please, this is no pitch. The few bucks up front getting this done right, goes a long way in not having substantial cost and stress in the future.
Other articles that may be of interest
- Distribution Agreements in Korea: Crawl Before you Walk
- Finding a Distributor or Agent to Sell your Products in the Korean Market
- Beware the Grey Market Trap in Korea: Due Diligence, Agreements & Street Smarts
- Finding a Korean Distributor: Top Ten Musts
- Entering into a Joint Venture/Partnership in Korea
- Independent Contractor Obligations in Korea: Amcham Speech
- Drafting of Korean Distribution Agreements for your Distributor in Korea.
- Distribution Agreements in Korea: Crawl before you Walk
- Korean Distributor Sales Territory or Customer Restrictions in Korea: Korean Distributor law Agreements in Korea
- Distribution Agreement in Korea: Factors to Always Keep in Mind
- Jurisdiction and Choice of Law Issues in Agency Agreements
- Liquidated (Penalty) Damages Necessary in Most Korean NDA and Non-Compete Agreements
- Finding a Distributor or Agent to Sell/Market Your Products in the South Korean Market
- How to Successfully Manufacture OEM in Korea: First Break Products Down to the Threads
- Expiration Versus Termination of a Distribution Agreement in Korea: Korean Distributor Basics
- A “Tasty” Exclusive Agent Agreement for Artists & Entertainers in Korea: Entertainment Law Basics in Korea