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HOW TO DRAFT CLAUSES WHICH COMPLY WITH REGULATION 330/2010

Fabio Bortolotti. HOW TO DRAFT CLAUSES WHICH COMPLY WITH REGULATION 330/2010. Distribution contracts. 1) Clause prohibiting active sales Clause on duration (5 years) Clause on resale prices Clause on sales to unauthorized distributors (selective distribution). Prohibition of active sales.

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HOW TO DRAFT CLAUSES WHICH COMPLY WITH REGULATION 330/2010

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  1. Fabio Bortolotti HOW TO DRAFT CLAUSES WHICH COMPLY WITH REGULATION 330/2010

  2. Distribution contracts • 1) Clause prohibiting active sales • Clause on duration (5 years) • Clause on resale prices • Clause on sales to unauthorized distributors (selective distribution)

  3. Prohibition of active sales • «The Distributor agrees not to actively promote sales (e.g. through advertising, establishing branches or distribution depots) into the territories reserved by the Supplier exclusively for himself or allocated by the Supplier to other exclusive distributors or buyers.»

  4. Clause on duration • «This contract enters into force on the day of its signature and shall remain in force until terminated according to Articles 9 or 10, but shall in any case expire (if not terminated earlier) after a period of five years from the date of its entry into force. The parties agree to meet at least three months before the end of the five years' period in order to discuss the possibility of entering into a new contract after its expiration.»

  5. Cause on resale prices • «The Supplier has established a list of recommended resale prices which are made known to the public. However, the Distributor remains free to decide his pricing policy, provided he does not practice excessively high prices which may negatively affect the volume of sales.»

  6. Prohibition of sales to unauthorized distributors(selective distribution) • «The Distributor agrees to sell the Products only to end users or to authorized distributors belonging to the selective distribution network in the territory where the selective distribution system is currently operated and in the territories reserved by the supplier to operate that system in the future.»

  7. Agency contracts falling under Article 101 • Clause on active sales • Clause on resale prices • Clause on maximum duration ?

  8. Clause on active sales • «The Agent agrees not to actively promote sales (e.g. through advertising or visiting customers) in the territories reserved by the Supplier exclusively for himself or allocated by the Supplier to other exclusive distributors or buyers. • He may take unsolicited orders from customers established outside the Territory, which the Principal is free to accept or refuse.»

  9. Clause on resale prices • «The Agent has the right to grant discounts on the part of the price representing his commission. • The Principal will deduct such discount from the commission paid to the Agent.»

  10. Clause on five years’ duration • It is strongly recommended not to include a clause of this type in an agency agreement, since it would warrant the agent’s right to indemnity at the end of the five years period. • Also excluding post-contractual non-competition clauses is not appropriate. • The conclusion is that it makes no sense to apply Article 5 of regulation 330/2010 to agency agreements.

  11. Thank you for your kind attention! Fabio Bortolotti

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