Agency and Distribution Agreements in Spain

If you are selling goods and services in Spain, it is important to understand the legal implications of agency and distribution agreements.

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    If you are selling goods and services in Spain, it is important to understand the legal implications of agency and distribution agreements.

    At Scudamore Law, our commercial team can advise corporations on international contracts if they are trading in Spain. We are highly experienced in English and Spanish business law and know what is required for cross-border transactions.

    We can help you establish agency and distribution agreements for cross-border trading between another country and Spain.

    Agency Agreements

    An agency agreement is a contract between two legal entities or persons whereby the agent carries out transactions on behalf of the principal.

    Protection for Agents

    Agency agreements in Spain are regulated by the Agency Agreements Law 12/1992. There are a number of protections for agents under the law, including:

    • a minimum notice period of one month for every year that the agreement is in place (up to a total of six months),
    • right to an indemnity for client growth or increase in sales with existing customers over the duration of the agreement, and
    • rights concerning the payment of commission.

    Jurisdiction and governing law

    Parties to a contract with a cross-border element typically have the freedom to choose what law will govern the agreement, as well as which country’s court will have jurisdiction over any future disputes. However, the Spanish Agency are those of the domicile of the agent (in this case, Spain). This is to ensure that the interests of the Spanish agent are protected and a principal benefiting from the knowledge of a local agent in Spain acts in good faith. Obtaining specialist advice from a bi-lingual team can ensure that your agreement reflects your wishes and is in accordance with Spanish Agency Law.

    Does the agreement have to be in Spanish?

    While contracts do not have to be written in Spanish, it is recommended to do so or, at least, in dual-language format. If a dispute arises, the contract will need to be translated to be invoked in Spanish court. As such, having the agreement in Spanish will bestow greater certainty on the relationship between the parties and ensure that the terms of the agreement object of the dispute are those that were agreed by the parties and not subject to distortion or misinterpretation by a translator.

    Distribution Agreements

    A distribution agreement is a contract between a distributor and manufacturer in which the distributor agrees to purchase goods from the manufacturer and resell them. Distribution agreements are not specifically regulated in Spain, therefore Civil Code general contract regulations apply.

    Protections for distributors

    The distributor (also known as the reseller) assumes the risk of the sale and therefore exclusivity provisions are commonly found within distribution agreements, these may be:

    • Exclusive distributorship: the manufacturer agrees only to sell the goods to one distributor within a specified territory
    • Non-exclusive distributorship: the manufacturer can sell to more than one distributor or end user in the agreed territory

    How are disputes handled?

    Disputes involving distribution agreements are based on the terms of the contract and when deciding a case, the Spanish courts may apply the Commercial Agency regulations to the contract by analogy in respect of the calculation of the indemnity payable by the manufacturer or the period of notice of termination.

    How Scudamore Law can help

    These types of agreements are multi-faceted, and if you are a foreign business trading in Spain, it is important that your company establishes best business practice in line with Spanish corporate law.

    Based in London, Madrid and Almería, our team can provide specialist advice and guidance for all your business needs. We pride ourselves on putting our clients first and will always strive to obtain the best outcome for your circumstances.

    Contact our English-Speaking Spanish Business Lawyers Today

    Our highly experienced legal professionals are bi-lingual and experts in both English and Spanish company law. We can help you establish agency and distribution agreements for cross-border trading between another country and Spain.

    Get in touch with us through our enquiry form, or contact us at our offices in London or Madrid.

    Why Choose Scudamore Law?

    20+ experience

    We anticipate your needs, obviating the time and expense of corrective action later on.

    We communicate in native English

    Our dual-qualified English/Spanish lawyers are expert in Spanish and English company law.

    Reliability

    Professional ethos of the English Bar.

    Highly personalised service

    We keep our clients informed and confident that their matters are well managed and under control.

    Flexible, commercial approach

    We put ourselves in the client’s place and strive to achieve the best outcome.

    Price transparency

    No hidden cost.

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      Email: mail@scudamorelaw.com

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