Distribution Agreements in Israel

The Information contained at this web site is not intended to be relied upon a legal advice. Persons seeking legal advice should consult a licensed Israeli advocate.
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DISTRIBUTION AGREEMENTS IN ISRAEL

By Eitan Adasha, Advocate

Distribution agreements are agreements that are usually established between distributors and manufactures for the distribution of goods or services created by manufacturers and distributed by distributors.

The applicable legal rules which govern this area are the various Contract Law rules which have been established by the relevant statutes and case law.

Not only oral agreements but also written agreements are enforceable under the Israeli law and therefore even oral terms or terms contained in documents other than the formal agreement are binding and enforceable.

Parties to distribution agreements can avoid disputes by paying attention to the following:

1. The parties should sign a written contract that contains the various terms.

2. The various terms of should be drafted using a clear language.

3. The contract should contain a termination mechanism, namely, a mechanism by which a party to the contract can terminate the contract.

4. The length of the contract and the circumstances pursuant to which the contract will be renewed.

5. The geographic areas in which the distributor is allowed to operate.

6. The contract should clearly define the nature of the exclusivity rights (if granted).

In conclusion distribution agreements should be clearly documented using a formal contract that covers the main terms and various situations the parties may face during the contract period.