A buying company in South Africa, having worked with a Chinese factory for several years, has been highly satisfied with their fully developed and self-produced patented hardware products. To secure exclusive distribution rights in the South African market and eliminate local competition, the company sought to establish a distributor agreement with the factory.
To safeguard their competitive advantage and prevent the factory from selling the patented products to other clients in South Africa, the South African enterprise contacted Sandy Tan’s legal team at Yingke Law Firm’s Shenzhen office. The client requested comprehensive due diligence, drafting of the exclusive distributor agreement in both English and Chinese, and assistance in executing the agreement. They also sought to include necessary terms and measures to mitigate risks and unforeseeable circumstances.
Upon accepting the commission, our professionals conducted thorough interviews with the Chinese factory’s management team to understand their operational processes and confirm their commitment to the exclusivity agreement. We meticulously reviewed contracts and other transaction documents the factory had signed with their suppliers, ensuring that the factory had not entered into any agreements that would allow other South African clients to purchase the targeted product line. This step was crucial to verify that the exclusivity sought by our client would be honored without conflicts.
We then customized the distributor agreement to align perfectly with the client’s specific needs. This involved detailing the liabilities in case of a breach of contract, outlining the procedures for dispute resolution, and specifying the applicable laws governing the agreement. Our goal was to create a robust legal framework that would protect our client’s interests, provide clear guidelines for both parties, and minimize the risk of legal disputes. The agreement included comprehensive clauses to address potential issues such as product quality standards, delivery schedules, and financial obligations, ensuring a smooth and transparent business relationship between the South African client and the Chinese factory.
After several rounds of negotiation and adjustment, we successfully assisted the client in executing the distributor agreement with their counterpart. We concluded the commission by protecting the interests of the commissioning party, emphasizing the commitments and obligations of the commissioned party.
