Document background
The Distributor Settlement Agreement is a critical document used when parties decide to terminate their distribution relationship, whether by mutual agreement or due to specific circumstances. This agreement, governed by Hong Kong law, serves multiple purposes: it formally ends the existing distribution arrangement, settles any outstanding obligations or disputes, manages the transition period, and establishes future obligations and restrictions. The document typically becomes necessary during business restructuring, market exit strategies, or when distribution relationships need to be terminated due to performance issues or strategic changes. It incorporates key elements of Hong Kong commercial law and typically includes provisions for financial settlements, inventory management, intellectual property rights, confidentiality obligations, and mutual releases. The agreement is particularly important in Hong Kong's dynamic commercial environment, where international trade and distribution relationships frequently require careful unwinding with clear legal documentation.
