AGENT V' DISTRIBUTORSHIP

1
AGENT V. DISTRIBUTORSHIP

• AGENT
• (A.)
• A. does not have title to the goods
• A. usually paid salary or commission
• Risk remains with manufacturer
• A. generally cannot bind manufacturer

• DISTRIBUTORSHIP (D.)
• D. takes title
• D. receives any profit from the sale
• Risk of being unable to sell passes to D.
• D. does not act on behalf of manufacturer - only
  resells its goods

2
AGENT V. DISTRIBUTORSHIP

• AGENT
• (A.)
• Agency law may be extensive
• Arrangement may not be subject to antitrust laws
• A. may be required by local law
• Agent may be required to be a host country
  national

• DISTRIBUTORSHIP (D.)
• Less legal control over manufacturer
• Likely to be subject to antitrust laws
• D. probably not preferred by local law
• Distributor may be required to have majority
  local ownership

3
AGENT V. DISTRIBUTORSHIP

• AGENT
• (A.)
• Manufacturer likely able to set retail price
• Agent likely cannot appoint sub-agents
• Labor laws may not apply but local agency laws
  may provide similar protections

• DISTRIBUTORSHIP (D.)
• Manufacturer likely not able to set the retail
  (resale) price
• Distributor likely can appoint sub-agents
• Local labor laws do apply

4
AGENT V. DISTRIBUTORSHIP

• AGENT
• (A.)
• A. might subject manufacturer to local
  jurisdiction
• Manufacturer able to control where product is sold

• DISTRIBUTORSHIP (D.)
• D. less likely to subject manufacturer to local
  jurisdiction
• Manufacturer may not be able to control sales
  territory