Report on
Distribution Agreement · Miele × [Distributor]
Distribution · Buyer side · Counterparty: Miele & Cie. KG
Gütersloh, Germany · miele.com
74 / 100
74/100
Executive summary
Standard German-law distribution agreement, balanced on delivery + minimum-purchase terms but seller-friendly on liability cap (capped at 12 months of net fees) and termination for convenience (only Miele has the right). Recommend redlines on three clauses before signing.
Assessment matrix
1. Liability — 'Liability capped at 12 months of net fees paid'
The liability cap equals 12 months of net fees, which for a first-year distributor equal…
Severity: HIGH2. Termination — 'Manufacturer may terminate for convenience with 90 days notice'
Only the manufacturer has the right to terminate without cause, leaving the distributor…
Severity: HIGH3. Minimum purchase — 'Annual minimum purchase commitment of 500 units'
500-unit minimum is at the high end for a first-year distributor without a proven track…
Severity: MEDIUM4. Force Majeure — 'Standard force majeure clause'
Well-drafted, symmetrical, covers strikes and government action. No changes needed.
Severity: LOW5. Governing law — 'German law, jurisdiction Bielefeld'
Convenient for German + EU distributors. For a non-EU distributor, consider requesting I…
Severity: INFOFindings
1. Liability — 'Liability capped at 12 months of net fees paid'
Severity: HIGHThe liability cap equals 12 months of net fees, which for a first-year distributor equals the invoice value. This is tight for a premium appliance line where a supply gap or defect could result in significant downstream loss (customer refunds, warranty exposure, reputation damage).
Redline: Increase liability cap to 2x annual fees OR carve out gross negligence, wilful misconduct, and IP infringement from the cap entirely.
2. Termination — 'Manufacturer may terminate for convenience with 90 days notice'
Severity: HIGHOnly the manufacturer has the right to terminate without cause, leaving the distributor exposed to abrupt product-line withdrawal. This is asymmetric and out of line with multi-year distribution norms.
Redline: Make termination for convenience mutual, OR add a minimum-12-month supply commitment after notice so the distributor can transition inventory and customer relationships.
3. Minimum purchase — 'Annual minimum purchase commitment of 500 units'
Severity: MEDIUM500-unit minimum is at the high end for a first-year distributor without a proven track record. Missing the target risks contract termination or lost volume rebates.
Redline: Propose a graduated ramp — 250 units year 1, 400 units year 2, 500 units year 3 — with volume-bonus incentives above target.
4. Force Majeure — 'Standard force majeure clause'
Severity: LOWWell-drafted, symmetrical, covers strikes and government action. No changes needed.
5. Governing law — 'German law, jurisdiction Bielefeld'
Severity: INFOConvenient for German + EU distributors. For a non-EU distributor, consider requesting ICC arbitration in Paris or Zurich as an alternative.