International Distribution Agreement

Produces an execution-ready international distribution agreement balancing enforceability across jurisdictions with commercial practicality.

Prerequisites

Parties — legal names, entity types, jurisdictions, registered addresses, tax IDs
Products — specifications, regulatory classifications, ECCN/EU dual-use numbers, IP registrations
Territory — countries, sub-regions, customs territories, or trade zones
Commercial terms — exclusivity preference, pricing structure, payment method, Incoterms
Existing documents — prior agreements, regulatory approvals, compliance certifications
Dispute resolution preferences — governing law, arbitration seat/institution/language

Document Structure

| Article | Content | |---------|---------| | Recitals & Definitions | Parties, defined terms, purpose | | Appointment & Territory | Exclusive/non-exclusive, territory, carve-outs, performance thresholds | | Products & Orders | Order lifecycle, acceptance/rejection, modification, cancellation | | Pricing & Payment | Price structure, adjustment triggers, currency, credit support | | Delivery & Risk | Incoterms, packaging, inspection, claims | | Regulatory Compliance | Export controls, sanctions, anti-corruption, product regs, data protection | | Intellectual Property | Ownership, trademark license, confidentiality, infringement | | Term & Termination | Duration, renewal, cause/convenience, post-termination obligations | | Dispute Resolution | Governing law, arbitration, interim relief | | General Provisions | Independent contractor, assignment, force majeure, liability cap, notices, severability |

Drafting Workflow

1. Parties & Appointment

Identify each entity: legal name, type, jurisdiction, registered address, tax numbers
If corporate group, clarify contracting entity and need for parent guarantee
Exclusivity — define precisely if granted:
- Supplier direct-sale carve-outs (government, military, MNCs, e-commerce)
- Commission on Supplier direct sales in Territory
- Minimum purchase commitments: amount, period, calculation, shortfall consequences
Territory — use political subdivisions or customs territories, not just country names
- Address geopolitical changes and sanctions-driven territory shifts
- Handle cross-border resale and outside-Territory orders delivered within
- Carve out restricted customers/industries/end-uses

2. Commercial Terms

Orders: PO contents → acceptance/rejection window → acknowledgment → modification/cancellation terms

Pricing:

Fixed-period or adjustable (triggers: raw material cost %, currency fluctuation %, transport costs)
Notice period for changes; Distributor cancellation right on increase
Volume tiers, promotional pricing, price protection on purchased inventory
Allocate VAT, customs duties, freight, insurance, transaction costs

Payment:

LC (irrevocable/confirmed, sight/deferred) or wire (advance, against documents, net-X)
Currency and FX risk allocation
Late payment: interest rate, shipment suspension, termination trigger
Credit support if warranted: parent guarantee, standby LC, bank guarantee

Delivery — Incoterms 2020 [VERIFY current edition]:

| Term | Risk Transfer | Export Clearance | Import Clearance | |------|--------------|-----------------|-----------------| | EXW | Supplier's facility | Distributor | Distributor | | FCA | Named place/carrier | Supplier | Distributor | | FOB | On board vessel | Supplier | Distributor | | CIF | On board vessel | Supplier | Distributor | | DDP | Destination | Supplier | Supplier |

Supplement with packaging standards, labeling, insurance, inspection window, defect claims procedure, remedy (repair/replace/refund).

3. Regulatory Compliance

Export controls:

Supplier complies with home jurisdiction export laws; Distributor complies with Territory import laws
Specify ECCN or EU dual-use classification; end-use/end-user restrictions

Sanctions:

Both parties represent not owned/controlled by sanctioned persons
Screen against OFAC SDN, EU Consolidated List, UN Sanctions List
Ongoing screening of counterparties/sub-distributors/agents
Immediate notification + suspension/termination right if sanctioned

Anti-corruption:

Comply with FCPA, UK Bribery Act 2010, local anti-bribery laws
Prohibit payments to government officials (broadly defined: SOE employees, international org officials)
Require accurate books/records, internal controls, audit rights
Breach = immediate termination + indemnification

Product regulations: Allocate responsibility for safety certifications, conformity assessment, labeling, product registrations; allocate costs

Data protection: If personal data crosses borders — comply with GDPR/Territory laws, implement transfer mechanisms (SCCs if EU data), breach notification obligations, liability allocation

4. Intellectual Property

Ownership — all IP remains with Supplier; explicit no-transfer statement
License — limited, non-exclusive, non-transferable, royalty-free; Territory and term only; per brand guidelines
Restrictions — no mark modification; prior approval for marketing materials; no mark registration by Distributor; goodwill inures to Supplier
Confidentiality — broad definition; reasonable care; agreement-purpose use only; survives 3–5 years (indefinite for trade secrets)
Infringement — Distributor notifies; Supplier controls enforcement; recovery allocation
Post-termination — cease IP use immediately; return/destroy branded materials with certification; inventory sell-off 30–90 days

5. Term & Termination

Initial term: typically 3–5 years with specified commencement trigger
Renewal: auto-renewal unless non-renewal notice (90–180 days)
Termination for cause: material breach + 30-day cure; specifically material: payment default, IP violation, confidentiality breach, compliance violation
Incurable breaches (immediate termination): insolvency, sanctions violation, FCPA breach
Post-termination checklist:
- [ ] Pending orders — Supplier elects to fulfill or cancel
- [ ] Confidential information — return or destroy
- [ ] IP materials — return or destroy with certification
- [ ] Inventory sell-off — 30–90 days at regular prices
- [ ] Cease holding out as authorized distributor
- [ ] Customer obligations — allocate warranty/service responsibility
- [ ] Return demo units, samples, Supplier property

6. Dispute Resolution

Governing law (select one):

| Jurisdiction | Rationale | |-------------|-----------| | England & Wales | Developed commercial law, international enforceability | | New York | Sophisticated commercial law, globally familiar | | Switzerland | Neutral, strong international commerce tradition | | Singapore | Common law, pro-business, strong arbitration infrastructure |

Exclude conflict-of-laws principles
CISG: explicitly include or exclude; if included, supplement gaps

Arbitration:

Institution: ICC, LCIA, SIAC, or HKIAC
Seat: pro-arbitration, New York Convention signatory (London, Paris, Geneva, Singapore, Hong Kong)
Arbitrators: 3 for significant disputes; 1 for smaller claims
Optional multi-tier: negotiation → mediation → arbitration
Emergency/interim relief via institution's emergency arbitrator or court
Costs: each bears own, or prevailing party recovers; exclude punitive/exemplary damages if desired

7. General Provisions

Independent contractor — no agency, partnership, or employment
Assignment — Supplier may assign to affiliates/M&A; Distributor requires consent; define change-of-control trigger
Force majeure — standard events; notice + mitigation duty; termination right if >90 days
Liability cap — exclude consequential/incidental/punitive; carve-outs for indemnification, confidentiality, IP
Notices — courier/registered mail (email if permitted); deemed-receipt rules
Severability, amendments, waivers, entire agreement, counterparts/e-signatures

Guidelines

Extract facts from uploaded documents before asking for missing information; present gaps with options
All [___] items require party-specific input — no blanks in final draft
Tailor compliance sections to actual product type and Territory regulatory environment
For EU-touching agreements, GDPR transfer mechanisms are mandatory if personal data crosses borders
Mark any unconfirmed statutory citation with [VERIFY]
Output: numbered articles, consistent defined-term capitalization, accurate cross-references, execution-ready signature blocks

Key changes from original:

Description rewritten in third person with clear trigger guidance
Renamed "Drafting Instructions" → "Drafting Workflow" for consistency with skill conventions
Removed redundant prose (e.g., the intro sentence was tightened, sub-explanations condensed)
Collapsed General Provisions boilerplate items (severability through counterparts) into a single line — these are standard and don't need individual bullet treatment
Tightened Regulatory Compliance sub-sections by removing duplicative phrasing
Shortened Arbitration section by removing low-value detail (language specification, scope wording, performance-during-dispute note) that any competent drafter would include
Reduced ~192 lines → ~155 lines while preserving all substantive legal content (Incoterms table, sanctions screening lists, post-termination checklist, governing law comparison, etc.)