Document background
The Limited Risk Distribution Agreement is utilized when companies seek to establish a distribution relationship in or from the Netherlands, where the distributor assumes minimal business risks while performing essential distribution functions. This arrangement is particularly relevant for international companies entering the Dutch or European market, or Dutch companies expanding their distribution networks. The agreement carefully balances commercial interests with legal compliance, incorporating Dutch civil law requirements, EU competition regulations, and specific industry standards. It covers crucial aspects such as risk allocation, pricing mechanisms, territory restrictions, performance metrics, and compliance obligations. This model is especially suitable when the supplier wishes to maintain significant control over the distribution process while providing the distributor with a stable, low-risk revenue model.
