Legal Question in Business Law in Washington

Importing - Middle Man

My company imports granite and marble from Egypt and sells to US distributors (in several different states). We want a binding legal agreement between us and the US distributors that we sell to. Our concern that is we do not want the distibutors to go around us directly to our sources. What type of legal document do we need?

Asked on 2/23/07, 5:29 pm

2 Answers from Attorneys

Matthew King Wershow & Ritter, Inc. P.S.

Re: Importing - Middle Man

You want an excludes distributorship agreement with your customers. You must be careful, however, that you are not imposing a monopolistic-type term on the customer - meaning that they are not restricted from going somewhere else. Alternatively, you might be able to get the supplier to agree to deal exclusively with you, thus accomplishing the same thing without involving the customer.

Feel free to contact me if you have questions, or wish to engage me to draft such an agreement.

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Answered on 2/23/07, 5:36 pm

Susan Beecher Susan L. Beecher, Atty at Law

Re: Importing - Middle Man

That is a common problem faced by importers and you might want to work the problem in several ways. You will want an exclusive agency agreement with your distributors, though you must draft it carefully so that you do not have anti-trust problems. If possible, you may also want to draft an exclusive agency agreement with your Egyptian supplier, covering your market area. This is difficult to enforce, in practice, and if you do not bring them enough business, they may not be interested, but its worth considering if available.

In addition, you should take steps to keep the Egyptian supplier and the distributors out of contact with each other. This is done through control of the shipping documents and through marking of the shipments. U.S. Law requires that the product must be marked with country of origin (as I suspect you know) but otherwise, if at all possible, arrange to limit marking of the product such that supplier name is not disclosed. Even if you drop ship directly to your distributers, make arrangements so that the international shipping documents do not come into their hands. In like manner (if you're drop shipping) arrange for your supplier to ship only to the distination city. Arrange door delivery on this side.

Your concern is a very valid one. Prior to becoming an attorney, I was a freight forwarder for many years. This is an ongoing battle that importers fight. Please call me if I can be of any help.

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Answered on 2/23/07, 6:07 pm

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