Drafting of Korean Distribution Agreements for your Distributor in Korea.

Drafting of a Korea-centric distribution agreement and a good deal of due diligence of the anticipated distributor/agent is necessary for avoiding issues that may require the litigation services of a law firm. Some of the articles posted by IPG Legal on Due Diligence may be found at:

• Doing Business in Asia: Due Diligence, Agreements, Attorneys and Street Smarts
• Listen to My Mother: JVs in Korea (Translated from Korean)
• Debt Collection Cases in Korea on the Rise: Due Diligence Brother

I have been informed by one of my more frugal 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
• Renewal/Termination
• Pricing & Payment Terms
• Report Requirements
• End-User Disclosure
• Sales Methods Allowed
• Sales Performance
• Legal Compliance (FCPA etc.)
• Competition
• Warranty/Defects
• 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 costs 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

You may schedule an initial free consultation with our Attorney at: Schedule a Call with an Attorney in Korea.