Distribution Agreement
"What should be included in a distribution agreement for Turkey?"
Quick Answer
Distribution agreements typically address territory, exclusivity (if any), ordering and supply terms, recommended (non-binding) resale prices, minimum purchase targets (if lawful), IP/brand use, product compliance/warranties, termination, and competition law compliance.
Legal Framework in Turkey
Distribution agreements are not regulated under a single named contract type in Türkiye. They are generally governed by the Turkish Code of Obligations (Law No. 6098) and, depending on the structure, may also implicate the Turkish Commercial Code, competition law rules on vertical restraints, IP/brand protection rules, and product/compliance requirements.
Key Points to Remember
- Define territory, channels, and any customer/account carve-outs (including online sales).
- If exclusivity is granted, tie it to measurable performance targets and reporting.
- Set clear supply & logistics terms (forecasting, lead times, Incoterms, returns, defective goods).
- Regulate IP/brand use and marketing approvals (trademarks, signage, digital ads).
- Add product compliance and after-sales obligations (labeling, warranties, recalls, service).
- Include competition law safeguards (avoid resale price fixing; limit non-compete scope/duration).
- Draft termination and post-termination rules (notice, sell-off period, stock/marketing materials).
- Include compliance clauses (anti-corruption, sanctions, data protection if relevant).
Drafting Considerations
In Turkey-facing distribution arrangements, parties should clearly allocate (i) payment and credit risk (currency, late interest, security), (ii) product warranty/returns and regulatory compliance, (iii) exclusivity and non-compete limits, (iv) marketing/IP permissions, and (v) termination and post-termination sell-off. If bilingual, specify the prevailing language to avoid interpretation disputes.
Competition Law Notes (High-Level)
Turkish competition law closely monitors vertical agreements. To ensure enforceability and avoid fines:
- Resale Maintenance: Resale prices (RPM) must be recommended or maximum only; fixed or minimum prices are generally prohibited.
- Exclusivity: Exclusivity and non-compete obligations must be proportionate and typically time-limited (e.g., often max 5 years under block exemptions).
- Passive Sales: Restrictions on passive sales (unsolicited requests from outside the territory) are generally restricted.
- Justifications: Document legitimate commercial reasons for any channel or customer group restrictions.
Need Expert Legal Guidance?
Our experienced attorneys can help you draft and negotiate a distribution agreement under Turkish law.
Schedule a Consultation