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Distribution Contracts under Turkish Law
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Att. Berna Asik Zibel
Legal Nature of Distribution Contracts
Distribution contracts are qualified as
sui-generis
contracts under
Turkish law. A distribution contract may contain the features of a sales
and purchase contract, but it differs from the same as it consists of mul-
tiple sale and purchase transactions; and it envisages strong connection
and loyalty features between the parties, such as exclusivity (unless
otherwise agreed) and the permanent character of the performance.
Distribution contracts have some common features with agency
contracts in terms of loyalty and the permanent character of the per-
formance. However, a distribution contract differs from an agency con-
tract due to the ability of the distributor to act independently in its own
name and on its own account. In addition, a distributor generates prof-
it from the difference between the purchase price and the sale price,
whereas an agent is paid a commission for the sales conducted by the
principal.
The main characteristics of a distribution relationship are:
(i) permanence;
(ii) the distributor’s ability to act on his own behalf and for his
own account, independently from the supplier; and
(iii) the distributor’s duty to perform activities aimed at increasing
the sales.
The distributor sells the contracted products to its own customers,
after purchasing them from the supplier. In this respect, the ownership
of contracted goods is transferred to the distributor. The profits
generated as a result of the sale and all financial and actual risks
pertaining thereto shall therefore lie with the distributor. The distributor
is not a representative of the supplier but a legally and economically
LAW OF OBLIGATIONS
291
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Article of December 2012