Distribution agreements in Europe: what US manufacturers should know before signing
EU distributors can claim notice and end-of-contract pay that a New York law clause will not remove. Eight countries compared, with a first-draft checklist.
Elena Marchetti · Compliance desk
Updated 8 November 2026 · 10 min read
In most US distribution deals, the contract is the whole story: the UCC fills gaps, and a dealer that loses the line usually has only the claims the contract or a state dealer statute gives it. In several European countries a distributor has rights at the end of the relationship that the contract cannot fully remove, and a New York governing-law clause will not always switch them off.
Putting it simply: before you sign with a European distributor, expect four things US practice does not prepare you for. Notice periods that grow with the length of the relationship. In some countries, a goodwill payment when you end the deal. EU competition rules that limit how you can protect territories and set prices. And a choice of US law that gives way to mandatory local rules. This page compares eight countries and gives you a first-draft checklist. It is general information, not legal advice; have the draft reviewed by a lawyer qualified in the distributor's country.
Why your usual template does not travel
Choice of law. Under the Rome I Regulation, the parties may choose the law that governs their contract (Article 3). Without a choice, "a distribution contract shall be governed by the law of the country where the distributor has his habitual residence" (Article 4(1)(f)). A choice of New York law is valid, but Article 9 keeps "overriding mandatory provisions" of the court hearing the case in play whatever law the parties chose. Belgium's distribution statute is the clearest example: it applies notwithstanding any contrary clause, and it tells a Belgian court to apply Belgian law.
Choice of court. Brussels I bis, Article 25, makes a written clause choosing the courts of an EU member state effective "regardless of their domicile". A clause choosing a court in New York is a different matter: the EU court the distributor goes to applies its own national rules to it. Enforcing a US judgment in Europe is also less automatic than many expect. According to the Hague Conference status tables we checked on 8 November 2026, the United States has signed the 2005 Choice of Court Convention and the 2019 Judgments Convention but ratified neither, while the EU is bound by both.
Arbitration as the usual compromise. The United States and all 27 EU member states are parties to the 1958 New York Convention on the recognition and enforcement of arbitral awards, which is why many transatlantic distribution agreements choose arbitration with a neutral seat. Arbitration does not make mandatory protection disappear, and in Belgium whether a distribution dispute can go to arbitration abroad has long been litigated. Agree the clause with counsel in the distributor's country.
Agents and distributors are different animals
A commercial agent negotiates sales on your behalf and earns a commission. A distributor buys your goods and resells them in its own name. The difference decides which rules apply.
Agents are covered by an EU directive. Directive 86/653/EEC defines the agent as a self-employed intermediary with continuing authority to negotiate sales "on behalf of" the principal (Article 1(2)), requires member states to give agents an indemnity or compensation after termination (Article 17) and forbids derogating from those rights to the agent's detriment before the contract expires (Article 19). In Ingmar (C-381/98, 9 November 2000), the Court of Justice held that these rights "must be applied where the commercial agent carried on his activity in a Member State although the principal is established in a non-member country" and the contract chose that country's law. The principal in that case was a California company, and the California choice of law did not help it.
Distributors have no EU statute. Their protection is national, sometimes written in law, more often built by judges who borrow the agency rules by analogy. That is why the eight countries below differ so much. One practical warning applies everywhere: if your "distributor" in fact takes orders in your name or earns commission, a court may treat it as an agent.
The competition law frame
Every distribution agreement in the EU sits under Article 101 TFEU. Regulation (EU) 2022/720, the Vertical Block Exemption Regulation (VBER), in force until 31 May 2034, gives a safe harbor when neither supplier nor buyer has more than 30% of the relevant market (Article 3), unless the agreement contains a hardcore restriction listed in Article 4. The Commission's Guidelines on vertical restraints (2022/C 248/01) explain how it applies.
- Exclusive distribution. You may allocate a territory or customer group to one distributor and restrict other buyers' active sales into it. Active sales means targeting customers by visits, emails, targeted ads or a website aimed at that territory. You may not ban passive sales, meaning responses to unsolicited requests, and the VBER counts "participating in public procurement" as passive.
- Selective distribution. You may choose resellers on criteria and forbid sales to unauthorized resellers within the territory where the selective system operates.
- Online sales. Preventing "the effective use of the internet" to sell is hardcore (Article 4(e)). Quality standards for online sales are allowed.
- Resale prices. Fixed or minimum resale prices are hardcore (Article 4(a)). Recommended and maximum prices are allowed if they do not become fixed through pressure or incentives. US companies used to minimum advertised price programs should have them reviewed.
- Non-compete. A non-compete during the agreement is exempted only up to five years (Article 5(1)(a)); after the agreement it is generally excluded, with a narrow one-year exception tied to the distributor's premises (Article 5(3)).
Eight countries compared
Each row links to the full country page. Cells are short and simplified; where the rule is case law, conditions apply.
| Country | Statutory distributor protection? | Notice rule | End-of-contract compensation | One thing US firms miss |
|---|---|---|---|---|
| Germany | No statute; courts apply agency rules (§§ 89, 89b HGB) by analogy | Federal Court of Justice has applied the agency scale (1 to 6 months, § 89 HGB) to distributors integrated like an agent | Goodwill indemnity by analogy if the distributor is integrated like an agent and must hand over its customer base; § 89b(2) caps it at one year's commission or other annual remuneration, averaged over the last five years | Where German law governs and those conditions are met, the indemnity cannot be waived in advance, even for a distributor working elsewhere in the EEA (BGH VII ZR 102/15); cases are heard in German unless an English-language Commercial Court is used (§ 184a GVG, since 1 April 2025) |
| France | No distribution statute; Code de commerce art. L442-1 II covers every established commercial relationship | Written notice reflecting the length of the relationship; 18 months ends disputes about length | No statutory indemnity; damages if notice was too short | Non-renewal of a fixed-term contract is a "break-off" too; notice is still needed |
| Italy | No distribution statute; the Civil Code's agency rules are written for agents | No statutory period for distributors; failing a contract term, a reasonable period by analogy with the supply rule (Civil Code art. 1569), and withdrawal must be exercised in good faith | No statutory indemnity; the agents' indemnity (art. 1751) is not extended to distributors as a rule (Cassazione doubted it in 20106/2009, in passing); damages possible for abusive or abrupt termination | If the partner negotiates in your name, agency rules apply in full |
| Spain | No statute; Supreme Court borrows from the Agency Act (Ley 12/1992) case by case | No statutory period; courts look to good faith, and the Agency Act benchmark of one month per year, up to six (art. 25), is the practical guide | Clientele indemnity by analogy with art. 28 where the distributor built a customer base you keep using; not automatic | Missing notice can cost damages even in an oral exclusive deal |
| Netherlands | No statute; Hoge Raad case law on reasonableness and fairness | Open-ended contract is terminable in principle, but reasonableness may require notice or an offer of compensation | No statutory right; agency compensation (art. 7:442 BW) is for agents; compensation possible under the termination case law | Without a termination clause, a judge fills the gap |
| Belgium | Yes: Code of Economic Law, Book X, Title 3, for exclusive or quasi-exclusive deals, or where you impose significant obligations (art. X.35) | Reasonable notice or fair compensation, set by agreement at termination or by the judge (art. X.36) | Additional equitable indemnity for clientele, costs and staff severance (art. X.37) | After two renewals of a fixed term, any further extension counts as indefinite (art. X.38) |
| Poland | No statute; unnamed contract under the Civil Code | If the contract is silent, an open-ended deal ends "promptly after notice" (art. 365¹) | No statutory indemnity; agency compensation (art. 764³) is for agents | Your notice clause is the only protection on either side |
| Austria | No statute; Supreme Court (OGH) applies agency law (HVertrG) by analogy | Agency scale of 1 to 6 months (§ 21 HVertrG) as a benchmark; the OGH has required longer for a heavily invested dealer | Compensation by analogy with § 24 HVertrG for an integrated distributor, capped at one year's remuneration, calculated from the margin | Do not rely on a waiver signed at the start; price the claim in |
Customer data at the end
Distributors hold customer data, and the agreement should say who controls it. If the distributor processes data only on your instructions, it is your processor and Article 28 GDPR requires a contract with set terms; usually each party decides its own purposes and is an independent controller, and where you decide together, Article 26 requires a joint-controller arrangement. Any transfer of that data to the United States needs a basis under Chapter V, such as the EU-US Data Privacy Framework if your company is certified, or standard contractual clauses. In Germany, the customer-data clause also drives the goodwill indemnity, so draft it with both laws in mind.
Export controls and sanctions
US-origin items remain subject to the EAR wherever they are (15 CFR 734.3), so a European distributor that re-exports your goods carries your compliance risk. For items on the Commerce Control List, other than EAR99, 15 CFR 758.6 requires a destination control statement on the commercial invoice. The EU side adds its own layer: since 20 March 2024, Article 12g of Regulation (EU) No 833/2014 requires EU exporters of listed goods to third countries to contractually prohibit re-export to Russia. A distribution clause should commit the distributor to US and EU export control and sanctions law, to screening its customers and to informing you of a breach, with a right to terminate.
Product liability
Directive (EU) 2024/2853 replaces the 1985 product liability regime for products placed on the market after 9 December 2026. For a manufacturer outside the EU, the importer and the authorized representative are liable alongside the manufacturer (Article 8(1)(c)), and where no EU-based liable operator can be identified, a distributor that fails, within one month of a request, to name one or its own supplier becomes liable itself (Article 8(3)). Your European distributor is often the importer, so expect it to ask for an indemnity, insurance and product documentation. The product safety side is covered in the GPSR guide for non-EU manufacturers.
A first-draft checklist
- State that the distributor buys and resells in its own name and does not negotiate for you.
- Choose governing law and an arbitration seat or EU court together, and ask local counsel what survives that choice.
- Pick a fixed term with an explicit renewal rule, or an indefinite term with notice that grows with the relationship.
- Write notice periods at least as long as the local benchmark in the table, equal for both sides.
- Define the territory and customer groups; restrict only active sales and leave passive, online and tender sales free.
- Use recommended or maximum resale prices only.
- Keep any non-compete within five years during the term and the VBER limits after it.
- Decide who controls customer data at the end, and document the GDPR roles.
- Agree minimum purchases, stock buy-back and the return of trademarks, domain names and materials.
- Add export control, sanctions and product liability clauses with indemnities and insurance.
- Budget for end-of-contract compensation in Germany, Austria, Belgium and possibly Spain, instead of relying on a waiver.
What this means for a US manufacturer
Treat the distributor's country, not your home state, as the starting point for the exit terms. Write the notice and compensation you are willing to accept into the first draft, because a European court will apply its own floor anyway. Keep competition rules in mind from day one: territorial protection and price control work differently here. A one-hour review by a lawyer in the distributor's country costs far less than an indemnity you did not price in.
Where Cresques fits
Cresques helps with the step before the contract: finding the distributors that already sell your category in a European country, with the public contract award notices that name them as proof, and drafting a first message in their language. Start with the page for US manufacturers or browse the country markets.
This page is general information as of 8 November 2026, not legal advice. Have your agreement reviewed by a lawyer qualified in the distributor's country.
