Commercial contracts · Foreign suppliers

A foreign supplier is ready to appoint a Romanian distributor. The commercial team has agreed a territory and a margin, but the draft contract still leaves open who owns the customer relationship, which online sales are permitted and what happens to inventory if the appointment ends.

This guide is for a supplier negotiating a business-to-business distribution arrangement for goods sold into Romania. It is a negotiation guide rather than a standard form. Regulated products, sector-specific networks and a contract involving a non-EU jurisdiction may require additional analysis. Where a purchase order, agency appointment or franchise arrangement is being labelled “distribution”, first identify what the parties will actually do.

Is this a distributor, an agent or a reseller under individual purchase orders?

The label is not enough. Ask who buys the goods, who invoices the Romanian customer, who bears stock and credit risk, and whether the local business may bind the foreign supplier.

A distributor generally purchases goods and resells them in its own name and for its own account. The commercial risk, margin and customer contract can sit with the distributor, although the supplier may still have product-related obligations. An intermediary who has continuing authority to negotiate or conclude sales on another party’s behalf may instead be a commercial agent. That distinction matters at exit: Directive 86/653/EEC and the Romanian Civil Code regulate the agency agreement in Articles 2072–2095, including the conditions for a post-termination indemnity under Article 2091. An Article 2091 termination indemnity is conditional, including on new customers or substantially increased business with existing customers, continuing substantial benefits for the principal and an equitable assessment. The indemnity is subject to a statutory maximum based on the average annual remuneration received by the agent during the relevant reference period; the amount payable is determined by the statutory conditions and the circumstances of the case, and is not automatically equal to one year’s remuneration. Those rules do not automatically give an independent distributor an equivalent statutory payment. If the parties only exchange separate purchase orders without an enduring market-development commitment, a supply framework may be the better description. The differences affect remuneration, customer data, liability and potentially the legal consequences of termination.

Do not assume that calling a contract “independent distribution” settles the classification. Review the actual authority granted to the local party, ownership of inventory, ability to negotiate price with customers, marketing commitments and risk of non-payment. The European Commission’s Guidelines on Vertical Restraints also distinguish genuine agency from independent distribution for competition analysis by looking at the agent’s relevant financial and commercial risks. A hybrid arrangement deserves close review before the parties adopt clauses copied from either model.

What should the exclusivity clause actually cover?

Define the products, territory, customer groups, channels, reserved accounts and supplier’s direct-sales rights separately. “Exclusive in Romania” leaves too many commercial questions unanswered.

A foreign supplier may wish to retain existing multinational accounts, direct e-commerce, government tenders or sales to a particular industry. The distributor may expect protection for its investment in local staff, stock and marketing. Put those expectations into a schedule that names the protected customer category and the channels where the distributor is expected to invest. Clarify whether the supplier may appoint another distributor, whether an affiliate may sell directly and whether exclusivity is conditional on performance.

Sales restrictions require more than careful wording. Under Regulation (EU) 2022/720 on vertical agreements, the vertical block exemption (VBER) offers a conditional safe harbour. Among its conditions, the supplier and the buyer must each stay at or below 30% on the relevant market identified for that party, and the agreement must avoid the hardcore restrictions in Article 4. Crossing 30% does not itself make an agreement unlawful. Article 8(d) preserves the exemption for two consecutive calendar years after the year in which a party first exceeds 30%, where its share was initially no more than 30%; thereafter an individual assessment may be needed. An Article 4 hardcore restriction generally removes the benefit of the block exemption for the entire agreement, rather than just that clause. Loss of the exemption is not itself proof of an Article 101 TFEU infringement: the agreement and any possible individual exemption require a separate competition-law assessment. Article 4 contains distinct exceptions for exclusive, selective and other distribution systems. Under the Regulation, an exclusive territory or customer group may be allocated to the supplier itself or to no more than five buyers; a permitted active-sales restriction may in certain circumstances extend to the buyer’s direct customers. That does not create a general right to prohibit passive sales responding to unsolicited demand.

Link exclusivity to a realistic implementation plan. State when the distributor must launch, which products it must carry, what information it must report and what follows if an agreed target is missed. A shortfall might trigger a negotiated cure or conversion to non-exclusivity, if the contract so provides. Avoid a clause that promises permanent market protection while leaving the minimum effort, supplier stock availability and target measurement undefined.

Can the supplier control resale prices and online sales?

The distributor’s resale pricing and its ability to use the internet need a separate EU competition review. A target margin or brand policy does not justify fixing the distributor’s minimum resale price.

Article 4(a) of Regulation 2022/720 treats restrictions on the buyer’s ability to determine its sale price as a hardcore restriction for the block exemption. A supplier may set a maximum or recommend a resale price only if the arrangement does not operate as a fixed or minimum resale price through pressure or incentives. That means the clause, emails, discount approvals, monitoring and threatened consequences all matter. A “recommended” price list backed by penalties can create a different legal picture from a genuinely non-binding recommendation.

Online sales also need a clear channel map. Will the distributor run its own Romanian website, sell through marketplaces, advertise on search engines, or fulfil an order from a customer in another EU Member State? Article 4(e) addresses restrictions that prevent the effective use of the internet for selling the contract goods or services. A proportionate marketplace condition is not necessarily equivalent to an effective ban on internet selling; restrictions on the distributor’s own website, online advertising channels and cross-border passive sales must be examined separately. The effects and distribution model determine the analysis. State brand, service and presentation standards without copying an absolute online-sales ban.

If the supplier sells directly to Romanian customers as well as through the distributor, it should also examine its own distribution activities and any sensitive information exchanged with a downstream competitor. Under Article 2(5) VBER, the dual-distribution exemption does not cover an exchange of information unless it is directly related to implementing the vertical agreement and necessary to improve production or distribution of the contract goods or services. A competition assessment cannot be reduced to checking the distributor’s signature on a standard territorial appendix. Romanian Competition Law no. 21/1996 and the role of the Romanian Competition Council (Consiliul Concurenței) also matter; where trade between Member States may be affected, EU and national competition rules can be applied in parallel.

How long can a non-compete obligation last?

An exclusive appointment is not automatically the same as a non-compete obligation. Check whether the distributor is barred from competing products or required to source more than 80% of its relevant purchases from the supplier.

Under Article 5 of the VBER, a non-compete obligation of indefinite duration or more than five years is generally excluded from the block exemption. This is an exclusion of that obligation, not the same rule as an Article 4 hardcore restriction that removes the exemption for the entire agreement. The Commission’s Vertical Guidelines explain that a tacit renewal beyond five years can still benefit where the buyer can effectively renegotiate or terminate on reasonable notice and at reasonable cost, allowing it to switch supplier. There is also a limited exception for supplier-owned or qualifying supplier-leased premises. Do not state an automatic five-year ban without examining the arrangement.

A post-contract non-compete receives the block exemption only under narrower cumulative conditions, including a one-year limit, a restriction to the premises and land from which the buyer operated, and necessity to protect the supplier’s transferred know-how. Continuing confidentiality protection for non-public know-how is a separate question. Review these obligations with the exit plan rather than adding an unrestricted ban to the template.

Which commercial terms deserve the most negotiation time?

Price and territory are prominent, but the difficult disputes often come from the mechanics of ordering and performance. The table below turns a draft into a decision list. It is a negotiation tool, not a statement that every item is mandatory in every distribution relationship.

In particular, identify which document controls if a framework, quotation, purchase-order acknowledgement and distributor terms conflict. A list of “standard terms” attached after negotiations can reverse the agreed allocation of risk. Version the annexes and make the order of precedence deliberate. Where Romanian law governs, Article 1202(3) of the Civil Code gives individually negotiated clauses priority over standard clauses. Article 1203 may require express written acceptance of certain unusual standard clauses, depending on the circumstances. Applicable-law, arbitration and jurisdiction clauses must also satisfy the specific formal and substantive requirements of the applicable international, EU and national rules.

For payment terms, consider Law no. 72/2013 where it applies. Article 5(1) uses 60 calendar days as the general B2B maximum, subject to an expressly agreed longer term that is not abusive under the detailed provisions of the Law. Articles 3 and 4 address when late-payment interest accrues and the applicable statutory interest where no rate was agreed. Discuss credit limits, advance payment, a bank guarantee or a carefully documented retention-of-title arrangement when the distributor carries substantial stock. A retention-of-title clause needs a separate review of identification, applicable property and security rules, third-party effect and insolvency exposure. Check the chosen law and cross-border enforceability before relying on a form clause.

Who handles product compliance, complaints and recalls?

Allocate operational tasks in the agreement, but first establish each party’s legal role in the supply chain. A contract cannot remove duties imposed directly by applicable product law.

For consumer products within its scope, Regulation (EU) 2023/988 on general product safety, applicable from 13 December 2024, imposes obligations on manufacturers, importers and distributors. A Romanian business established in the EU that places a product from a third country on the EU market may be an importer even if the commercial agreement calls it a distributor; simply reselling goods already placed on that market does not automatically give it that role. Whether the Romanian business is an importer depends on the applicable definition and the actual supply-chain arrangements, including who places the product on the Union market and who is identified in the relevant import and compliance documentation. A business that markets a product under its own name or trademark, or substantially modifies it, may assume manufacturer obligations. Article 16 requires an economic operator established in the EU to be responsible for specified tasks for products covered by the Regulation. Products intended exclusively for professional or industrial use require their own regulatory assessment, but goods reasonably foreseeable for consumer use can fall within the GPSR even if also sold to professionals. Sector-specific legislation may also apply. The contract should identify the entity responsible for relevant product documentation, language of instructions, traceability, handling a safety alert, notifying the other side and contacting authorities when legally required.

The distributor needs a reliable path to escalate complaints and stop affected stock from moving while facts are checked. The supplier needs batch, shipment and customer information sufficient to trace affected products, subject to the applicable law and the information actually held by the parties. Agree who controls consumer-facing statements and who pays for transport, inspection, replacement or a recall when responsibility is established. Financial indemnities and insurance should be tested against the actual legal roles and the available cover, not inserted as a blanket promise that one party will absorb every event.

For non-safety complaints, specify the first response owner, the evidence record and the approval path for customer communications. If the Romanian seller is approached by ANPC or a competent sector-specific market-surveillance authority, the contract should support prompt access to product and transaction records and identify who coordinates any legally required notification or corrective measure. If an actual contravention report is issued, our guide to challenging an ANPC fine addresses that separate sanction stage.

How should the contract handle the brand and customer information?

A distributor needs permission to present the products, but that does not require ownership of the supplier’s trademark or unrestricted use of brand assets. Specify permitted marks, approved materials, translations, domain names, social accounts, quality controls and who may register or renew a local domain. Prohibit registration of the supplier’s trademark in the distributor’s own name without express consent, and agree how control of local domains and accounts is transferred at exit. Describe what happens to signs, listings and marketing assets on termination. A local distributor should not be left with an unclear right to keep using a supplier’s mark after the appointment ends.

Customer data deserves its own practical map. If each business decides independently why and how it processes personal data, an automatic “processor” label is unreliable. If one party processes information on the other’s documented instructions, a data-processing agreement may be required under Article 28 of the GDPR. If the parties jointly determine purposes and means, Article 26 may require a joint-controller arrangement instead. Transfers of personal data to a country outside the EEA require a separate Chapter V analysis where applicable. Determine which company collects the customer’s details, who sends marketing, who keeps complaint and warranty records, whether information crosses borders and what may be transferred at exit. The site’s data-processing agreement guide covers the role distinction in more detail.

A customer list is also a commercial asset. Define access to leads generated by the supplier and those developed by the distributor, and the rights to use them after termination. This needs to fit competition, confidentiality, data-protection and actual customer-contract arrangements. A contractual claim to “own all Romanian customers” is too crude to answer any of those questions.

What must be agreed about duration and exit?

State the term, renewal process, notice route, breach remedies and the fate of accepted orders and inventory. The supplier’s right to appoint someone else after exit is only useful if the transition can be carried out in practice.

A fixed term may support launch investment, but management should see the renewal and break points on a calendar. An indefinite-term arrangement requires a different notice analysis. Under Article 1277 of the Romanian Civil Code, either party may unilaterally end an indefinite-term contract with reasonable notice. Reasonableness depends on the relationship, its duration, investment, replacement arrangements and the practical transition; there is no universal 30-day rule. Article 1277 treats a contrary clause, or a payment required merely in exchange for exercising that withdrawal right, as unwritten. This does not erase accrued invoices, accepted orders or liability for a separate breach. Article 1276 regulates the exercise of a contractual or statutory right of unilateral withdrawal (denunțare unilaterală) where such a right exists; it does not give either party a general right to abandon a fixed-term contract.

The contract should also say what constitutes a serious breach, whether a cure opportunity applies, where notices must be sent and when they are effective. Under Romanian law, breach-based termination (reziliere) and its notice mechanics should be distinguished from unilateral withdrawal; Articles 1550–1553 of the Civil Code address available routes and express termination clauses (pacte comisorii). An Article 1553 clause should identify the obligations whose non-performance triggers termination and should state whether termination operates automatically or requires notice, subject to the Civil Code and the wording of the clause. Rights must be exercised in good faith under Articles 15 and 1170. A negotiated penalty or damages clause needs its own assessment rather than being treated as a fee for exercising Article 1277. The supplier should plan for accepted orders, returns, spare parts, warranties, prepaid promotions, demonstration stock, tooling, customer communications and the removal of its branding. The distributor may need an orderly stock solution rather than an abrupt write-off; the supplier may need protection against damaged or obsolete inventory being returned at full price.

An independent distributor has no automatic Romanian statutory goodwill indemnity equivalent to the agency indemnity in Article 2091. A genuine agency relationship may engage that rule only if its conditions are met, subject to its statutory cap; an “independent distributor” label will not resolve a different factual arrangement. The parties may negotiate stock buy-back, transition payments or other exit arrangements expressly; a separate claim based on breach or abusive exercise of rights depends on its own facts and legal basis. The classification and governing law require a document-specific assessment. Our separate supplier contract exit guide explains early termination routes after a relationship is already underway.

Which law and court will govern a cross-border dispute?

Choose governing law and the dispute forum deliberately. Under Rome I Regulation, Article 3, the parties can generally choose the law applicable to contractual obligations. If they make no effective choice, Article 4(1)(f) provides a specific connecting rule for a distribution contract: the law of the country of the distributor’s habitual residence. For a company, Article 19 generally locates habitual residence at its central administration, with a branch-related rule in specified cases; classification and Article 4(3) may displace the default if the contract is manifestly more closely connected with another country. Rome I also preserves the role of overriding mandatory provisions in Article 9 and, in the intra-EU circumstances covered by Article 3(4), EU rules that cannot be derogated from. A Romanian distributor may therefore bring Romanian law into the analysis even when the supplier’s template assumes its home law will apply by default.

The chosen law does not by itself decide which court hears a dispute. An EU cross-border jurisdiction clause should be assessed under Regulation (EU) 1215/2012, including Article 25 where applicable. A jurisdiction agreement must meet Article 25’s consent and form requirements, which include writing or an equivalent electronic communication providing a durable record. Article 25 does not require a general factual connection between the selected Member State court and the parties. Exclusive jurisdiction rules and other applicable limits still require checking. Without an effective choice, Article 7(1)(b) may be relevant to the place of performance; the Court of Justice’s Corman-Collins judgment (C-9/12) treated a distribution arrangement involving characteristic distribution obligations as a supply of services for the predecessor rule. That classification depends on characteristic obligations in the actual agreement; the place of performance must be established on its facts. Arbitration has a different framework. Consider where the distributor’s assets and records are, where performance occurs, language and evidence costs, and how a judgment or award would be enforced. The choice of foreign law cannot simply switch off overriding mandatory rules or EU competition provisions that apply to conduct in the market.

When does monthly legal support make sense?

A single distribution appointment may be handled as a defined drafting or review matter. Ongoing counsel is more useful where the supplier repeatedly appoints dealers, changes pricing and marketing programmes, adds product lines, reviews exclusivity targets or manages several customer and compliance escalations in Romania. The recurring work might include contract amendments, order-term consistency, brand-use approvals and a response process for product complaints. It should have a named business owner and an agreed scope, not an assumption that every dispute and authority proceeding is included.

Atrium’s monthly legal support for companies can be discussed once the expected volume and type of work are clear. The first step remains the concrete contract in front of management. It can reveal whether the business needs one negotiated agreement, a reusable set of distributor terms or continuing assistance across several relationships.

What should management send for a first review?

Start with a short description of the products, the intended Romanian territory and the proposed local partner. Attach or identify the current agreement and annexes, price and rebate schedule, distribution plan, product-compliance documents available for review and any existing customer or online-channel commitments. Note the proposed signing date and the issues that are still disputed. If some files are confidential or too large for the initial enquiry, describe them first and agree a suitable transfer route.

A lawyer’s first review can then identify whether the appointment is really distribution, map mandatory and negotiable issues, mark clauses that conflict with the commercial model and identify a small number of decisions for the supplier. The work product may be a clause mark-up, a negotiation matrix and an implementation note on notices, sales-channel controls and product responsibilities. This is a scope to agree, not a promise about the distributor’s acceptance or the outcome of negotiations.

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