Distribution Agreement in Brazil: Template, Key Clauses and Local Law (2026)

A distribution agreement is a contract where a supplier (the principal) appoints an independent business (the distributor) to buy its products and resell them, in its own name and for its own account, inside a defined territory. The distributor takes title to the goods and carries the stock and credit risk, which is what separates it from a commercial agent, who only solicits orders for a commission and never owns the goods. In Brazil, unlike many countries, distribution is regulated directly in the Civil Code. The contract is still shaped by general contract law and competition law, but the Code sets out specific rules on exclusivity, notice and the effects of termination. This guide sets out the local law that actually bites, the clauses a Brazil distribution agreement should contain, and a section-by-section skeleton you can adapt. It is general information, not legal advice; confirm the detail with qualified Brazilian counsel before you sign. ## Brazil: the local law that shapes your agreement Brazil regulates distribution directly: Articles 710 to 721 of the Civil Code (Law No. 10.406/2002) cover the agency and distribution contract, including exclusivity, territory, remuneration and the effects of termination. Exclusivity is not presumed and must be stated expressly. For an open-ended contract, a party that wants to end it must give reasonable notice (the Code points to a 90 day notice compatible with the nature of the business and the investments made), and a distributor can claim damages where the supplier cuts off or starves supply without just cause. Customer (goodwill) indemnity for distributors is still lightly developed in Brazilian case law. Vehicle distribution is a special case governed by its own statute, Law No. 6.729/1979 (the Ferrari Law). ### Competition law Brazil is not part of any EU-style single market. Antitrust is governed by the Brazilian Competition Law (Law No. 12.529/2011) and enforced by CADE, the Administrative Council for Economic Defense. Imposing a fixed or minimum resale price on a distributor is treated as a serious violation, so pricing and exclusivity clauses need care. ## The clauses a Brazil distribution agreement should contain A workable distribution agreement sets out the commercial deal and the legal protections together. The core clauses are: - Appointment and territory. Name the parties and products, define the territory, and say whether the appointment is exclusive (only this distributor), non-exclusive, or selective (resellers chosen against set criteria). In Brazil exclusivity must be stated expressly, as it is not presumed.

• Products and changes. Define the product range precisely and say what happens when the supplier adds, discontinues or reformulates a product.
• Sales targets and minimums. Minimum purchase or sales targets, how they are measured, and the consequence of a miss (often loss of exclusivity rather than automatic termination).
• Pricing and payment. The supplier may set its own wholesale price and recommend a resale price, but it must not fix or impose a minimum resale price. Set payment terms, currency, taxes and credit limits.
• Orders, delivery and risk. The ordering process, lead times, delivery terms (an Incoterms rule), and when title and risk pass.
• Intellectual property and brand. A limited licence to use the supplier's trade marks for resale only, with brand and quality standards, and a clear statement that no goodwill in the marks transfers to the distributor.
• Marketing and online sales. Marketing commitments, and the rules on website and marketplace selling, which competition law limits what the supplier can restrict.
• Warranties, product liability and recalls. Who stands behind the product, how claims and recalls are handled, and the indemnities between the parties. Note Brazil's consumer protection regime (the CDC) where goods reach consumers.
• Term, renewal and termination. Fixed or open-ended term, renewal mechanics, and termination for cause, insolvency and change of control, with the notice each requires. Build in the reasonable notice the Civil Code expects.
• Post-termination. Stock buy-back, run-off sales, return of materials, survival of confidentiality, and how any damages or indemnity claim is handled.
• Confidentiality, data protection and non-compete. Confidentiality, a data protection clause fit for the territory (Brazil's LGPD), and any post-term non-compete, which must be reasonable in scope and time.
• Governing law, language and disputes. The governing law, the court or arbitration seat, and the contract language. ## A distribution agreement skeleton you can adapt Use this running order as a drafting checklist. It is a skeleton, not a finished contract, and it is not legal advice. 1. Parties and recitals

2. Definitions
3. Appointment, territory and exclusivity
4. Products and product changes
5. Distributor obligations (targets, stock, promotion, standards)
6. Supplier obligations (supply, support, training, materials)
7. Pricing, orders, delivery, title and risk
8. Intellectual property and trade mark licence
9. Marketing, online selling and resale conditions
10. Warranties, product liability, recalls and insurance
11. Confidentiality and data protection
12. Term and renewal
13. Termination and notice periods
14. Consequences of termination (stock, run-off, damages, non-compete)
15. Governing law, jurisdiction or arbitration, and language
16. Boilerplate (assignment, force majeure, notices, anti-bribery, entire agreement) ## Common mistakes to avoid - Treating a cross-border template as plug and play. A clause that is fine in one country can be void in another, especially on resale pricing, territorial restrictions and termination.

• Ignoring the goodwill or indemnity question. In several countries a distributor can claim compensation at the end of the relationship even when the contract is silent or tries to exclude it. Price that risk in before you sign.
• Vague termination terms. Unclear notice periods and renewal mechanics cause most distribution disputes. Say exactly how and when either side can exit.
• Over-restricting online sales. Competition law limits how far a supplier can stop a distributor selling online; a blanket ban can cost the whole agreement its protection.
• Keeping no records. Targets, price changes, renewals and notice deadlines all need tracking. A missed renewal or a late notice undoes careful drafting. ## Keeping the agreement alive after signing The work does not stop at signature. A distribution agreement sets minimum targets to track, a term and renewal date to diarise, price lists that change, and termination notice windows you cannot afford to miss. Most disputes come not from a badly drafted clause but from a renewal that auto-extended unnoticed or a notice served a week too late. That is the case for keeping drafting, review, version history and obligation tracking in one place rather than spread across email, a shared drive and a spreadsheet. Adira is one such AI workspace: you draft from your own templates, see each clause flagged as favourable, neutral or unfavourable to you, edit clauses in plain English, and keep a live timeline of every version, renewal and obligation, built on Anthropic's Claude. Adira is India-first today; deeper support for Brazilian law is on its roadmap rather than live, so treat it as a workflow layer here and keep local counsel for the legal substance.