Distribution agreements in Austria: exclusivity, termination and compensation

Austria has no statute for distributors, yet its Supreme Court (OGH) has for decades granted a distributor the commercial agent's end-of-contract compensation by analogy, when the distributor works inside the supplier's sales organisation and leaves its customer base behind. That one line of case law shapes most of what an Austrian lawyer will ask you to change in a first draft.

Putting it simply: a distribution agreement in Austria is governed by general contract law (the ABGB) and by EU and Austrian competition law. The agency statute, the Handelsvertretergesetz (HVertrG), applies to agents only, but the OGH borrows its compensation rule for a distributor whose contract looks like an agency in substance. Unless the contract gives more, the claim is capped at one year's remuneration, calculated from the margin, and notice periods fall to the contract and the courts. This is general information, not legal advice; have the draft reviewed by a lawyer qualified in Austria.

For how the Austrian market buys, see Entering Austria through distributors.

Which law governs the agreement

At EU level, two frameworks matter. Competition law: Commission Regulation (EU) 2022/720, the Vertical Block Exemption Regulation (VBER), exempts distribution agreements where neither the supplier's nor the buyer's market share exceeds 30% (Article 3), unless the agreement contains a hardcore restriction listed in Article 4. It applies until 31 May 2034. Protection law: the Commercial Agents Directive 86/653/EEC covers self-employed intermediaries who negotiate sales on behalf of a principal (Article 1(2)). A distributor buys and resells in its own name, so its protection is left to national law.

Austria's competition rules run in parallel. Section 1 of the Kartellgesetz 2005 prohibits agreements that restrict competition and declares them void, and Section 2 contains the exemption criteria and a de minimis rule (no more than 15% market share each for non-competitors, provided the agreement does not aim at fixing sale prices, limiting output or sales, or sharing markets).

On private law, the OGH applies the agency rules to a distributor (Vertragshändler) when the contract is so close to an agency that its agency elements predominate, or when refusing the claim would run against the purpose of the statute (RS0062580). In its standing formula, the distributor must be integrated into the supplier's sales organisation so that it performs, economically and to a considerable extent, tasks comparable to an agent's, and must hand over its customer base when the contract ends; the court treats it as equivalent if the supplier is simply able, in fact, to keep using that customer base (RS0109284; the OGH still referred to this line in January 2026, 8 Ob 159/25b). In 1 Ob 10/09s (5 May 2009) the OGH confirmed that both conditions must be met cumulatively and that it weighs the elements as a "flexible system": individual missing elements do not rule out integration if the agency elements predominate overall.

Choice of law and forum. Under Rome I (Regulation 593/2008), the parties may choose the governing law (Article 3). Without a choice, a distribution contract is governed by the law of the country where the distributor has its habitual residence (Article 4(1)(f)), so an Austrian distributor brings Austrian law with it unless you agree otherwise. Overriding mandatory provisions of the forum still apply whatever law is chosen (Article 9). For agents, the Court of Justice held in Ingmar (C-381/98, 9 November 2000) that the Directive's indemnity rules apply where the agent works in a Member State even if the contract chooses the law of a non-member country. As of 8 November 2026 we could not find an OGH decision that extends this international mandatory effect to the analogous claim of a distributor, so a foreign choice of law does not reliably remove the risk.

On jurisdiction, Brussels I bis (Regulation 1215/2012) lets the parties choose a court in a Member State, and that choice is exclusive unless agreed otherwise (Article 25). Without a choice, a distributor can sue at the place where the services are provided (Article 7(1)(b)); in Corman-Collins (C-9/12, 19 December 2013), ruling on the same rule in the predecessor Regulation 44/2001 (Article 5(1)(b)), the Court of Justice treated an exclusive distribution agreement that contains specific terms on the distribution of the goods as a contract for services for this purpose, which in practice points to the distributor's territory.

Exclusivity and territory

Austrian law has no special rules on exclusivity, so the VBER sets the frame. If you appoint an exclusive distributor for Austria, you may restrict its active sales into territories or customer groups reserved to you or allocated exclusively to up to five other exclusive distributors (Article 4(b)(i)). You may not restrict its passive sales, meaning unsolicited orders from outside its territory, and you may not prevent the effective use of the internet to sell (Article 4(e)), although other restrictions of online sales and of online advertising remain possible.

Selective distribution is also covered: you can forbid sales to unauthorised resellers within the territory where the system operates, but not cross-supplies between authorised members (Article 4(c)). Exclusivity also has a second effect in Austria: the OGH counts an exclusive sales right among the indications that a distributor is integrated into the supplier's organisation (1 Ob 10/09s, citing RS0018335).

Term, termination and notice

A fixed-term agreement ends when the term expires; for agents, Section 20 HVertrG turns a fixed-term contract that both parties continue into an indefinite one, so state in the contract what happens if you carry on.

For agents, Section 21 HVertrG sets minimum notice for indefinite contracts: one month in the first year, rising by one month for each started contract year to six months from the sixth year, with notice to the end of a calendar month unless agreed otherwise. Shorter periods are ineffective, and if longer periods are agreed, the principal's period may not be shorter than the agent's.

For distributors the position is judge-made. In 9 Ob 2065/96h (17 December 1997) the OGH refused to apply the short agency notice period of the former law to a car dealer because of the dealer's high investments, decided by general legal principles instead, and drew on the six months of Section 21 HVertrG and on the then motor-vehicle block exemption to require one year's notice for that dealer and workshop contract (RS0109285). For a draft: agree notice that is reasonable for the distributor's investment, and expect a court to use the six-month agency scale as a benchmark that it may exceed.

Termination for good cause is available for any long-term contract: in a line of decisions going back at least to 1961, the OGH holds that such contracts can be ended for an important reason without observing notice periods, as a rule without first setting a deadline to remedy (RS0018305). List the events you treat as good cause. No registration is required, and under Section 883 ABGB a contract is binding without a particular form, though a written contract is the only practical option.

Compensation at the end

Section 24 HVertrG gives an agent an appropriate compensation (Ausgleichsanspruch) after the contract ends if, and to the extent that, it brought new customers or substantially expanded existing business, the principal can expect substantial benefits from those relationships afterwards, and payment is equitable in view of all circumstances, in particular the commissions the agent loses. The claim is excluded where the agent terminated without a reason attributable to the principal (age, illness or infirmity excepted), where the principal terminated for the agent's culpable serious breach, or where the agent transferred the contract to a third party by agreement. Unless the parties agreed terms more favourable to the agent, it amounts to at most one year's remuneration, calculated from the average of the last five years, or of the whole term if the contract lasted less than five years (Section 24(4)), and is lost if not notified within one year of the end (Section 24(5)). Under Section 27, Sections 21(1) and (3), 23 and 24, among others, cannot be excluded or limited in advance to the agent's detriment.

For a distributor that meets the integration and customer-base conditions, the OGH applies Section 24 by analogy. The calculation starts from the distributor's trade margin plus any special payments attributable to its agent-like intermediary activity, less payments it receives for services outside that typical role; the pull of the brand and the risk that customers drift away reduce the amount (RS0116277). The court rejects fixed formulas, including the "Münchner Formel", and decides case by case (RS0116276). As of 8 November 2026 we could not find an OGH headnote stating expressly that Section 27 makes an advance waiver void for a distributor; because the claim rests on analogy to a mandatory rule, treat a blanket waiver as unreliable and price the claim in instead.

Other clauses the local lawyer will look at

• Non-compete during the contract. Under Article 5(1)(a) VBER a non-compete obligation is exempted only for up to five years; an indefinite one falls outside the exemption. A non-compete is also one of the agency elements the OGH weighs (1 Ob 10/09s), so it increases the compensation risk.
• Non-compete after the contract. Section 25 HVertrG makes a post-term restriction on an agent void. We found no OGH headnote applying Section 25 to distributors; the VBER allows a post-term non-compete only for one year, limited to the premises, competing goods and know-how protection (Article 5(3)).
• Minimum purchases and targets. Common; tie them to loss of exclusivity or termination rather than penalties.
• Stock buy-back. The HVertrG has no rule on it; agree who buys back saleable stock, at what price and within what time.
• Trade marks and domain names. Keep registrations in your name; the distributor uses them under licence and transfers any local registrations on termination.
• Prices. You may set maximum or recommended resale prices, not fixed or minimum ones (Article 4(a) VBER); Section 1(4) Kartellgesetz treats price recommendations that restrict competition as a cartel unless they are expressly non-binding and not enforced by pressure.
• Standard terms. If you use your general terms, an unusual clause that disadvantages the distributor, and that it had no reason to expect, does not become part of the contract unless you pointed it out specifically (Section 864a ABGB), and a clause that is not a main obligation is void if it grossly disadvantages the other party (Section 879(3) ABGB).
• Language. We found no rule requiring a business-to-business contract in German; product documents and safety information are a different matter (see the playbook).
• Invoicing. If the distributor resells to federal buyers, it may need e-invoices through e-Rechnung.gv.at; the playbook explains the platform.
• Disputes. Choose a court or arbitration seat expressly.

A first-draft checklist

• State the governing law and forum (or arbitration) expressly.
• Define the territory, exclusive or not, and limit restrictions to active sales.
• Do not restrict passive sales or the effective use of the internet to sell.
• Use recommended or maximum resale prices only, marked as non-binding.
• Keep any in-term non-compete at five years or less.
• Agree a notice period that increases with the length of the relationship and reflects the distributor's investment; our recommendation (not a statutory rule) is six months as a floor for a mature relationship.
• List the events that count as good cause for immediate termination.
• Decide whether the distributor must share customer data or hand over the customer base; both point towards a compensation claim.
• Budget for a compensation of up to one year's margin if the relationship looks like an agency, rather than relying on a waiver.
• Set out stock buy-back, trade mark use and return of materials on termination.

What this means for a manufacturer

In Austria, the more you control a distributor (exclusivity, targets, reporting, non-compete, customer data), the more likely an Austrian court is to treat the end of the relationship like the end of an agency, with up to a year's margin as compensation. Decide what level of integration you need and write the notice and compensation terms to match. This is general information, not legal advice; have the draft reviewed by a lawyer qualified in Austria.

Where Cresques fits

Cresques shows which companies already win Austrian public contracts in your product category, with the award notices as evidence, so you can choose a distributor that already sells what you make. For each company it can draft a first message in German and English for the lawful channel in Austria. Start from the Austria market page and the Austria playbook.