--- name: intl-distribution-agreement title: International Distribution Agreement description: Drafts international distribution agreements for cross-border supplier–distributor relationships. Covers appointment/territory, Incoterms, pricing/payment, export controls, sanctions, FCPA/UKBA, data protection, IP licensing, termination, and international arbitration. Trigger when drafting distribution agreements, cross-border supply contracts, dealer agreements, or exclusive distributor appointments. author: CaseMark author_url: https://github.com/CaseMark/skills/tree/main/skills/legal/intl-distribution-agreement license: Apache-2.0 version: 0.1.0 execution_mode: open jurisdiction: general practice: commercial language: en tags: [agreement, drafting, regulatory, transactional] --- # International Distribution Agreement Produces an execution-ready international distribution agreement balancing enforceability across jurisdictions with commercial practicality. ## Prerequisites 1. **Parties** — legal names, entity types, jurisdictions, registered addresses, tax IDs 2. **Products** — specifications, regulatory classifications, ECCN/EU dual-use numbers, IP registrations 3. **Territory** — countries, sub-regions, customs territories, or trade zones 4. **Commercial terms** — exclusivity preference, pricing structure, payment method, Incoterms 5. **Existing documents** — prior agreements, regulatory approvals, compliance certifications 6. **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.)