Distribution Agreements In Argentina: Basic Regulations No Distributor May Risk To Ignore

Author:Mr Mario Eduardo Castro Sammartino
Profession:Castro Sammartino & Pierini

Until the new Civil and Commercial Code of the Nation (Código Civil y Comercial de la Nación or CCCN) became in force on August 1, 2015, distribution agreements had not had statutory regulation in Argentina.

The CCCN has set forth that the concession contract's provisions will also govern the distribution agreement as far as those provisions are relevant to the distribution contract (CCCN, Article Number 1,511, Sub-article b)). Therefore, the following provisions will apply to the distribution agreements in Argentina:

Exclusivity: Unless otherwise agreed upon, exclusivity applies to both parties within the assigned territory. Therefore, the grantor of the distribution may not appoint another distributor, nor may the distributor, directly or indirectly, sell the goods beyond the territory or perform competitive activities (CCCN, Article Number 1,503, Sub-article a)). Notwithstanding the above explained, the grantor may reserve for itself certain direct or special sales (CCCN, Article Number 1,504, Sub-Article b); Goods and products included: provided the parties do not stipulate on the contrary, the distribution agreement includes all goods manufactured or commercialized by the grantor of the distribution, including new models; (CCCN, Article Number 1,503, Sub-article b); Grantor's obligations Further to the additional obligations the parties may agree on, the CCCN establishes the following grantor's obligations: To provide the distributor with the minimum quantity of products to adequately meet the selling expectations within the territory, consistent with the payment, financing and collateral patterns foreseen in the agreement (CCCN, Article Number 1,504, Sub-Article a); To observe the territory granted to the distributor (CCCN, Article Number 1,504, Sub-Article b); To provide the distributor with technical information and, where appropriate, with manuals and the personal training needed (CCCN, Article Number 1,504, Sub-Article c) and to supply spare parts for a reasonable term (CCCN, Article Number 1,504, Sub-Article d); To allow the use of trademarks, brand names and other distinctive elements, to the extent necessary to commercialize and advertise in the territory (CCCN, Article Number 1,504, Sub-Article e); Distributor's obligations Additionally to what the parties may particularly agree upon, under the CCCN the distributor's obligations are: To exclusively buy the products from the grantor of the distribution and...

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