INTERNATIONAL AND DOMESTIC AGREEMENTS
The firm prepares a variety of agreements
dealing with the importation and distribution of beverage alcohol
throughout the United States. The agreements are tailored to
our clients specific needs which include among the following:
minimum sales goals, marketing and funding, product formulation
and compliance, terms of sales, intellectual property, franchise
law issues.
Below is a general checklist covering foreign supplier concerns
when considering an import arrangement.
- The supplier appointed should specify whether the importer
is appointed exclusively or non-exclusively.
- Importer should provide that it is licensed to
import and distribute the alcoholic beverages provided to
the territory
specified.
- A specified geographic territory should be reviewed
and if the importer is non-exclusive the supplier should
direct that the importer will not sell outside its area or
sell to
another distributor who will in turn sell outside its area.
- Duration - Generally, the agreements are anywhere
from one to several years, which can either be renewed on
an automatic basis or renewed if the supplier actively provides
for written renewal.
- Terms of payment - Discuss F.O.B. terms, exchange
rate on the US dollar, payment within thirty to sixty days
from date of shipment or based on irrevocable letter of credit.
Also discuss the passage of title and risk of loss.
- The contract should provide for distributor obligations
including efforts to service the brand, maintaining licensing,
cooperating with suppliers’ programs, maintaining inventory,
furnishing inventory reports, product liability insurance and
conforming to local regulations.
- Most contracts have supplier obligations, care
should be exercised as to any warranties of merchantability
or liability.
- Termination clause may be effected by specific
state franchise laws which prohibit termination or cancellation
or
non-renewal without good cause. The terms of termination
and the process of return of product must be reviewed.
- Intellectual property - Generally, the importer
has a non-exclusive right to use the intellectual property
and
must advise the supplier if issues arise.
- Choice of law - Supplier must consider which law
will govern and whether disputes will be resolved with an
arbitration service or in court.
- Miscellaneous restrictions such as termination
of the contract if the importer is sold or if there is a
change
in key management or officers as well as whether supplier
wishes to provide importer with a right of first refusal
over any
current or future products (addition to product line in the
territory).
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