Distribution agreements in Italy: exclusivity, termination and compensation

Italy has no statute on distribution agreements. The Italian distribution contract (contratto di concessione di vendita) is an unnamed contract built from the general part of the Civil Code, the duty of good faith and the case law of the Corte di Cassazione, which decides how a contract of indefinite term can end and what an abusive termination costs.

Putting it simply: in Italy the agreement you sign carries most of the weight. Exclusivity, territory, term, notice and the end of the relationship are what the contract says, read in good faith. The Commission's rules on vertical agreements set the outer limits on territorial protection and resale prices. Italian case law has so far kept the commercial agents' goodwill indemnity away from distributors, but it can award damages when a termination clause is used abusively. Standard terms that favour you need a second, specific signature.

This is general information, not legal advice. Have the draft reviewed by a lawyer qualified in Italy. For the market itself (sector associations, buying groups, public purchasing), see Entering Italy through distributors.

Which law governs the agreement

The EU frame

EU competition law applies whatever law you choose. Commission Regulation (EU) 2022/720, the Vertical Block Exemption Regulation, exempts supply and distribution agreements where neither the supplier's nor the buyer's market share exceeds 30% (art. 3), unless the agreement contains a hardcore restriction listed in art. 4, such as fixing a minimum resale price or restricting the territory into which an exclusive distributor may sell, beyond the exceptions the regulation allows. The regulation expires on 31 May 2034. Italian competition law applies alongside it: art. 2 of Law 287/1990 prohibits agreements that appreciably restrict competition in the national market, giving as examples fixing purchase or sale prices and sharing markets, and art. 1(4) says the law is interpreted according to EU competition principles.

Distributor protection is national. Directive 86/653/EEC harmonises the rules for commercial agents, defined as intermediaries who negotiate sales on behalf of a principal. A distributor buys and resells in its own name, so the Directive does not cover it.

Italian law and the forum

Under Rome I (Regulation 593/2008), the parties may choose the governing law (art. 3). Without a choice, a distribution contract is governed by the law of the country where the distributor has its habitual residence (art. 4(1)(f)): an agreement with an Italian distributor that is silent on the point falls under Italian law.

Under Brussels I bis (Regulation 1215/2012), a written choice of court is respected (art. 25). Without one, contractual claims go to the courts of the place of performance (art. 7(1)). In Case C-9/12 Corman-Collins (19 December 2013), ruling on the same rule in the predecessor Regulation 44/2001, the Court of Justice held that an exclusive distribution agreement containing specific terms on the distribution of the supplier's goods falls under the rule for the provision of services; the place where those services are provided is usually the distributor's territory.

Italy has no distribution statute that overrides a foreign choice of law. Whether the ban on abuse of economic dependence described below applies whatever law you choose is a question for your lawyer.

Exclusivity and territory

The Cassazione has described the distribution contract as close to the supply contract (somministrazione) while remaining an atypical framework contract (Cass. 18 September 2009, n. 20106). Two supply rules show how an Italian judge reads exclusivity:

• Exclusivity for the distributor (art. 1568): the supplier may not, in the zone and for the term of the contract, make the same kind of supplies there, directly or indirectly. A distributor that undertakes to promote sales in its zone is liable in damages if it fails to do so, even when it has bought the agreed minimum quantity.
• Exclusivity for the supplier (art. 1567): the buyer may not obtain goods of the same kind from third parties nor, unless agreed otherwise, produce them itself.

Under the VBER, you may stop an exclusive distributor from actively selling into territories or customer groups that you reserve to yourself or allocate exclusively to up to five other exclusive distributors (art. 4(b)(i)). Passive sales, meaning unsolicited orders, cannot be restricted, save for the narrow exceptions listed in art. 4(b). Active sales include targeted online advertising and websites with a country domain or language aimed at another territory (art. 1). A clause that has the object of preventing the effective use of the internet to sell is a hardcore restriction (art. 4(e)). The 30% market-share threshold applies to both parties.

Term, termination and notice

Fixed and indefinite term

A contract has the force of law between the parties and can be dissolved only by mutual consent or for causes the law allows (art. 1372). A fixed-term agreement ends on its date. If you want either party to be able to leave early, write the right of withdrawal (recesso) into the contract: art. 1373 allows it, and in contracts of continuing performance withdrawal does not affect performance already made or in progress.

For an agreement of indefinite term, the closest statutory rule is the one on supply contracts: each party may withdraw by giving notice in the agreed period, or in the period set by usage, or failing both "in a reasonable period" (termine congruo) having regard to the nature of the supply (art. 1569). As of 8 November 2026 we could not open a Cassazione decision that sets a notice period for distributors; Italian commentary reports that the courts weigh the length of the relationship and the distributor's investment. Give a notice period in the contract, and scale it to the years of the relationship.

Withdrawal must be exercised in good faith

Every contract must be performed in good faith (art. 1375), and both parties must act fairly (correttezza, art. 1175). In Cass. 18 September 2009, n. 20106, a car maker had terminated its dealers under a clause allowing withdrawal at will (recesso ad nutum). The Court did not strike down the clause, but held that its exercise can be reviewed for good faith and abuse of right: the judge must ask whether withdrawal was used in a manner or for aims beyond those for which it was granted, and an abusive withdrawal can give rise to damages. A court may therefore scrutinise how you use a termination clause in your favour.

Termination for cause

Art. 1456 lets the parties agree that the contract terminates if a named obligation is not performed, once the innocent party declares it relies on the clause. Name the obligations: minimum purchases, payment, non-compete, trade-mark use.

Abuse of economic dependence

Art. 9 of Law 192/1998 prohibits a firm from abusing the economic dependence of a client or supplier firm, including by "arbitrary interruption of existing commercial relations" or unjustifiably burdensome terms; an abusive term is void, and the Competition Authority may also act where the abuse matters for competition (art. 9(3-bis)). The law concerns subcontracting, but art. 9 speaks of any client or supplier firm. As of 8 November 2026 we could not open the Cassazione decision on whether art. 9 applies to distribution generally; your lawyer will know the current position.

We found no registration requirement for a distribution agreement in Italy.

Compensation at the end

Italian law gives a goodwill indemnity to agents: art. 1751 entitles an agent who brought new customers or significantly developed business to an equitable indemnity capped at one year's average remuneration over the last five years, and the rule cannot be waived to the agent's detriment. Art. 1750 sets minimum notice for agents of one to six months depending on the year of the contract.

There is no equivalent statutory right for distributors. In Cass. 20106/2009 the Court said, as a side remark, that extending the agency indemnity to distributors appeared "of doubtful practicability", because the distribution contract is a framework for purchase and resale whose structure seems to place it outside the area of affinity with agency. Commentary reports that later case law has generally followed that line. The risk for a manufacturer lies elsewhere: damages for abusive termination, for insufficient notice, or under art. 9 of Law 192/1998. A clause on what happens at the end (notice, stock buy-back, handover of customer data) reduces that risk.

If your Italian partner takes orders in your name instead of buying and reselling, it may be an agent, with art. 1750 and art. 1751 applying in full.

Other clauses the local lawyer will look at

• Non-compete. Under art. 2596 a non-compete agreement must be proved in writing and is valid if limited to a zone or activity; it may not exceed five years, and a longer or indefinite term is reduced to five years. The VBER is stricter: a non-compete of indefinite duration or over five years falls outside the exemption (art. 5(1)(a)), and a post-term non-compete is exempt only if it covers competing goods, is limited to the distributor's premises, is indispensable to protect know-how and lasts no more than one year (art. 5(3)).
• Standard terms and the double signature. Under art. 1341, standard conditions prepared by one party that, among other things, limit its liability, give it a right of withdrawal or suspension, restrict the other party's freedom to deal with third parties, provide for tacit renewal, arbitration or a different court, have no effect unless specifically approved in writing. Art. 1342 extends this to forms. Italian practice is a separate signature under a list of those clauses.
• Minimum purchases and targets. State them per year, with the consequence of a miss (loss of exclusivity, termination under art. 1456).
• Prices. You may recommend or cap resale prices; a fixed or minimum resale price is a hardcore restriction (VBER art. 4(a)), and price fixing is among the examples of prohibited agreements in Law 287/1990, art. 2(2)(a).
• Stock at the end. Agree whether you buy back saleable stock, at what price, and for how long the distributor may sell off the rest.
• Trade marks and domain names. Register your mark for Italy in your own name, and keep the .it domain and social accounts in your name.
• Language. Italian is not required for a contract between businesses. Information intended for consumers and users must be given at least in Italian (Codice del consumo, art. 9); agree who translates labels and manuals.
• Invoicing. Businesses resident or established in Italy must issue electronic invoices through the Exchange System (SdI) for transactions with other Italian residents; your distributor already does this. Your own cross-border invoices follow your country's rules. See the Italy playbook.
• Disputes. Name the governing law and the court or arbitral institution, and include those clauses in the double-signature list.

A first-draft checklist

• Define the products, the territory (region by region if useful) and the customer groups you keep.
• State whether exclusivity runs one way, both ways or not at all, with reference to art. 1567 and art. 1568.
• Separate active and passive sales and write the online rules to fit VBER art. 4.
• Choose a fixed term with renewal by written agreement, or an indefinite term with a notice period that grows with the years.
• List the breaches that allow immediate termination under art. 1456.
• Set yearly minimum purchases and the consequence of missing them.
• Limit any non-compete to five years during the contract and to one year after it, within VBER art. 5.
• Agree stock buy-back, sell-off period and the handover of customer and product data at the end.
• Keep trade marks, domain names and marketing accounts in your name.
• Prepare a separate signature block approving the clauses listed in art. 1341.
• Name the governing law and forum, and state the language of the contract.
• Assign responsibility for Italian labelling and product information.

What this means for a manufacturer

Italy leaves most of the terms to the contract, so the drafting carries the risk. A court may review how you use your termination clause, and while there is no statutory indemnity for distributors, damages for abusive or abrupt termination remain possible. Write a notice period that reflects the distributor's investment, use the double signature, and keep the competition limits in view.

Where Cresques fits

Cresques shows which companies already win public contracts for your category in Italy, with the award notices as proof, and researches whether each one is an independent distributor or a manufacturer's subsidiary. It drafts a first message in Italian for the lawful channel. Start from the Italy market page and the Italy playbook. This page is general information, not legal advice: have your agreement reviewed by a lawyer qualified in Italy.