CHAPTER XXVII OVERSEAS AGENTS/ DISTRIBUTORS

1
CHAPTER XXVII OVERSEAS AGENTS/ DISTRIBUTORS
AGENCY AGREEMENTS

• International Partner Search Service
• Agency Agreement With a U.S. Manufacturer
• Agency Agreement With an Overseas Agent

2
Overseas Agents/Distributors

• Agents Distributors are essential
• Time cost for locating reliable agents and
  distributors are too high for small businesses.
• One of reasons why most U.S. manufacturers are
  not engaged in export business

3
International Partner Search Service

• U.S. Commercial Service of USDC locates the most
  suitable agents, distributors, joint-venture
  partners, licensees provides up to 5
  prequalified partners
• Save time and money by working only with
  pre-qualified partners
• Obtain market information on marketability and
  sales potential
• Receive complete contact information on key
  officers and on the companies, and a statement
  from each potential partner on the marketability
  of U.S firms products or services
• Get all information within 30 business days

4
Agency Agreement with U.S. Manufacturer

• Manufacturers appointment of an EMC as an
  exclusive sales agent or export department for a
  certain territory all foreign countries or a few
  countries
• Compensation Commission or salary, salary plus
  comm.
• EMCs right to appoint overseas agents and
  distributors
• EMCs minimum performance requirement
• Jurisdictional clause
• Arbitration clause
• Contract period
• Contract termination clause

5
Agency Agreement with Overseas Agent

• ICC Model Commercial Agency Contract ICC
  Publication No. 644F
• Agent shall not have business dealings with
  competitive firms.
• Not reveal any confidential information in a way
  that would prove injurious, detrimental, or
  competitive to the U.S. firm.
• Not enter into agreements binding the U.S. firm
  without prior approval.

6
Agency Agreement with Overseas Agent

• Refer all inquiries received from outside
  designated sales territory to the U.S. firm.
• Apply the utmost skill and ability to the sale of
  the product for the compensation named in the
  contract.
• Meet the minimum sales requirement per year.
• Jurisdictional clause Which countrys or States
  law to govern the agency contract

7
Agency Agreement with Overseas Agent

• Arbitration clause
• Settlement of future possible disputes
• American Arbitration Rules
• ICC Arbitration Rules
• Contract termination clause
• Contract terms How many years?
• Just causes for termination before expiry date

8
Agency Agreement with Overseas Agent

• Foreign laws restraining termination of Agency
  Agreements
• Foreign countries national laws giving
  extraordinary protection to U.S. Firms foreign
  agents or distributors at the expense of the
  principals and making termination of the contract
  difficult or costly without legal justification.
• Goodwill indemnity One years potential
  commission for 5-year agency contract in EU
  countries