Trading Companies

Sales Agent and Distributor Agreements

When a trading company enters into a contract as a distributor or sales agent, it must maintain a firm awareness of its own risk, even as it aims to facilitate transactions and increase added value. If the trading company does not stand between the supplier and the buyer and skillfully distribute the various risks, such as claim risks and collection risks, between the trading company itself, the supplier, and the buyer, there is a risk that the trading company itself will bear an excessive burden and put its own survival at risk. Examples of such situations include the case in which the trading company is forced to pay compensation to the buyer while being unable to claim compensation from the manufacturer (supplier), or a case in which, even if the buyer files a lawsuit or seeks arbitration, the trading company will not be able to obtain support or cooperation from the supplier.

On the other hand, when a manufacturer appoints a distributor or agent overseas, it needs to prepare a contract that takes into account local competition legislation and legislation for the protection of distributors and sales agents, while giving the distributor or agent the incentive to expand their business at their own responsibility, and also to anticipate the termination of the contract if the distributor or agent performs poorly, or the termination of the contract if the company withdraws from the region or transaction.

Based on our experience in various forms of dispute resolution in various countries and legal fields, our attorneys can propose tailor-made solutions using a variety of contractual mechanisms and clauses.