Direct answer
Define the route to market before drafting clauses: who buys and resells which products, in which territory and channels, under what performance conditions, and who owns each regulatory and customer obligation. Exclusivity should be tied to measurable conditions and a workable exit, not treated as a label.
Preparation sequence
- Define the parties, products, territory, customer segments, permitted channels, appointment, and any reserved accounts or direct-sales rights.
- Record whether exclusivity depends on targets, forecasts, launch milestones, minimum purchases, reporting, cure periods, and loss-of-exclusivity consequences.
- Set order, acceptance, forecast, stock, shortage, price, discount, currency, tax, delivery, title, risk, return, and payment mechanics.
- Allocate marketing approval, brand use, product information, import and sector approvals, anti-bribery and sanctions controls, customer complaints, warranty, recall, and recordkeeping.
- Set positions for product liability, insurance, indemnities, confidentiality, IP, data, audit, term, termination, sell-off, stock repurchase, customer transition, governing law, forum, and notices.
Decisions to record
What does the appointment cover?
Name the products, territory, customers, channels, online sales, reserved accounts, affiliates, sublicensing limits, and whether the distributor buys and resells or acts in another role.
When is exclusivity earned or lost?
Use measurable targets, reporting periods, forecast assumptions, cure rights, and a stated consequence such as conversion to non-exclusive status rather than an undefined best-efforts promise.
Who carries product and regulatory risk?
Allocate import approvals, product information, storage, marketing claims, warranties, returns, recalls, insurance, customer complaints, and regulator contact using the real supply chain.
What happens to stock and customers at exit?
Decide final orders, sell-off period, repurchase basis, brand removal, customer notice, warranty support, data return, unpaid amounts, and continuing restrictions.
Evidence to organize
- Product, territory, channel, reserved-account, and customer-segment schedule
- Sales forecast, target method, order history, pricing approvals, delivery terms, and inventory plan
- Brand guidelines, marketing approval route, licences, import evidence, product files, and compliance owners
- Warranty, return, complaint, recall, insurance, and product-liability records
- Termination scenario, stock count, sell-off or repurchase assumptions, customer communications, and transition owner
Example decision record
Issue: territory exclusivity. Business fact: the distributor requests Singapore and Malaysia but has a launch plan only for Singapore. Proposed position: Singapore exclusivity after the first purchase and quarterly target; Malaysia remains non-exclusive. Fallback: a six-month Malaysia milestone with automatic conversion to non-exclusive status if it is missed.
Use the result responsibly
This guide does not select a legal mechanism, determine compliance, validate a contract, calculate a legal deadline, or predict an outcome. Laws, procedures, facts, and provider terms change. Check the official sources and obtain qualified advice where the business decision requires it.
Official reference points
Reviewed 2026-09-02. These sources are starting points, not a complete statement of applicable law. The UNIDROIT Principles are non-binding general principles unless the parties choose them or another applicable rule gives them relevance.