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The Exclusive Distribution Letter is used when companies wish to establish a formal but streamlined exclusive distribution relationship under German law. It is particularly suitable for situations where parties prefer a more concise format than a full distribution agreement while still requiring legal certainty. The document typically comes into play when a manufacturer or supplier wants to grant exclusive rights to a distributor in a specific territory, while ensuring compliance with both German commercial law and EU competition regulations. It includes essential elements such as appointment terms, territorial scope, duration, commercial conditions, and party obligations. This format is often chosen for initial distribution relationships that may later be converted into more comprehensive agreements, or for straightforward distribution arrangements where the full complexity of a traditional distribution agreement isn't necessary.

1. Parties: Identification of the supplier/manufacturer and the exclusive distributor

2. Background: Brief context of the business relationship and purpose of the exclusive distribution arrangement

3. Definitions: Key terms used throughout the letter including Territory, Products, and Exclusivity Period

4. Appointment and Territory: Clear statement of exclusive distributor appointment and definition of the geographical territory

5. Duration: Term of the exclusive distribution arrangement, including start date and initial period

6. Distribution Rights: Specific rights granted to the distributor, including exclusivity provisions and any reserved rights

7. Obligations of Distributor: Key responsibilities including minimum purchase requirements, marketing efforts, and reporting obligations

8. Supplier Commitments: Supplier's obligations regarding product supply, support, and territory protection

9. Commercial Terms: Basic pricing structure, payment terms, and delivery conditions

10. Termination Rights: Circumstances under which either party may terminate the arrangement