Course 7: Export Legal Considerations

Module 4: Contracts of Agency and Distributorship

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This module serves as an essential role in your understanding of pivotal export legal considerations in international trade, with a particular focus on contracts of agency and distributorship. It starts with an important question: “What is the difference between a market entry strategy and an international distribution strategy”, assuming you have completed the previous modules on international marketing, you should have a strong understanding of the former.The module continues to explore the international distribution strategy, with a break down of the purpose of said strategy, which explores topics like creating value for customers and increasing export product accessibility. The module continues to highlight the importance of an international distribution strategy, with a breakdown of the factors to be considered when developing one.This is followed by more important questions to be considered during this process, like “what level of control over the distribution of my products do I wish to have over the various channel members?” The module rounds off the topic with a distinction between an international sales agent and an international distributor.

The next topic further explores the difference between a sales agent and a distributor, with a focus on their respective roles and responsibilities. This topic delves deeper into how each party may influence your export administration functions, and how they are featured in the main sales contract. This topic also covers the responsibilities of the various parties involved with each, covering who bears the burden of liability in each case and all the nuanced considerations that may influence your decision making in contracting an agent or distributor. Another important topic to consider is the difference in the relationship between the exporter, agent and distributor. Which is highlighted by the critical differences between the agreements associated with a potential agent and a potential distributor.

The module continues to highlight the importance of an international distribution strategy, with a breakdown of the factors to be considered when developing one. This is followed by more important questions to be considered during this process, like “what level of control over the distribution of my products do I wish to have over the various channel members?”

The final topic covers the nuances of negotiating a contract with a sales agency and a distributor. With a particular focus on the effectiveness of a sales agent, and how to protect your export business from signing a contract with a potentially compromising international sales agent. One of the ways this can be circumvented is through contractual periods, and contract extension conditions on specific achievements or conditions. The topic also goes into what makes for a strong international sales agent, which is a vital reference in protecting your company from a bad contract of agency.