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A commercial distribution agreement constitutes one of the most common forms of commercial cooperation in modern business practice. It is a construct of the contemporary economy, designed to serve complex transactional needs. In particular, exclusive distribution agreements are widely encountered in sectors such as the automotive and spare parts industry, pharmaceuticals and medical technology, technology and industrial equipment, as well as in shipping and broader industrial sectors, where market development relies on specialized clientele and requires substantial promotional investment.
Distribution agreements present significant economic and legal interest, as they functionally resemble commercial agency agreements, a fact that entails critical consequences—particularly regarding the level of compensation upon termination.
A. When Can a Distribution Agreement Be Characterized as Exclusive and When Does It Resemble a Commercial Agency Agreement?
An exclusive distribution agreement is a sui generis, continuous contractual relationship of commercial cooperation, under which one party (producer or wholesaler) undertakes to sell specific goods exclusively within a defined territory to the distributor. The latter resells these goods to third parties in its own name, on its own behalf, and at its own business risk.
It differs from a commercial agency agreement in that the exclusive distributor contracts with third parties in its own name and for its own account, assuming full entrepreneurial risk, whereas the commercial agent performs an auxiliary intermediary function in the name and on behalf of the principal.
However, despite this distinction, a specific exclusive distribution agreement may, in substance, resemble a commercial agency agreement.
Greek case law has developed a set of indicative criteria demonstrating a high degree of dependence of the distributor on the supplier, thus suggesting functional equivalence with commercial agency:
- Exclusivity of distribution: The distributor is the sole channel for the products in a specific market.
- Non-compete obligation: The distributor undertakes not to sell competing products.
- Additional obligations: Promotional duties, participation in exhibitions, maintaining stock levels, etc.
- Intensive supervision and control: The supplier provides instructions, monitors performance, and evaluates the distributor.
- Reporting obligations: Continuous updates on market conditions, clientele, and sales.
- Investments by the distributor: Significant costs for promotion and market development, often under supplier guidance.
- Use of supplier’s trademark: The distributor’s activity is outwardly identified with the supplier’s brand.
- Access to clientele: The supplier gains full knowledge of the customer base developed by the distributor.
These criteria are not cumulative; the final assessment is conducted ad hoc by the competent court (see Supreme Court Plenary Decision No. 16/2013).
A recent decision (No. 1543/2025 of the Athens Court of Appeal) further clarifies the distinction between exclusive and simple distribution agreements, emphasizing that the absence of exclusivity and independence in pricing policy indicates a simple distribution agreement, which does not fall within the scope of Presidential Decree 219/1991.
B. Legal Consequences of Characterization as Exclusive Distribution – Analogical Application of Presidential Decree 219/1991
A key legal issue addressed by Greek case law is whether the provisions of Presidential Decree 219/1991 (governing commercial agency agreements) may apply analogically to exclusive distribution agreements.
The courts have accepted such analogical application, based on the existence of a legislative gap, in conjunction with general provisions of the Civil Code and for reasons of legal consistency. This approach was later codified in Article 14(4)(b) of Law 3557/2007: “The provisions of P.D. 219/1991 shall apply analogically to exclusive distribution agreements, provided that, as a result of such agreement, the distributor acts as part of the supplier’s commercial organization.”
The most significant consequence of this analogical application is the distributor’s right to claim goodwill indemnity (clientele compensation) upon termination of the agreement, provided that:
- The distributor has brought new customers to the supplier
- The clientele remains with the supplier after termination
- The supplier continues to derive benefits from this clientele
- The indemnity is equitable under the circumstances
Furthermore, pursuant to Article 9(1)(c) of P.D. 219/1991, the granting of such indemnity does not exclude additional claims under the Civil Code, such as:
- Loss of profits
2. Compensation for moral harm
These claims may be pursued cumulatively.
However, this analogical application does not extend to simple distribution agreements, particularly where the distributor sells competing products and lacks a non-compete obligation. In such cases, the essential element of integration into the supplier’s commercial organization is absent, and therefore no goodwill indemnity arises (see Supreme Court decisions 814/2019, 804/2015, 1909/2013).
C. Conclusion
An exclusive distribution agreement, when it exceeds the limits of a simple commercial relationship and incorporates elements of dependence and integration into the supplier’s network, may be functionally equated with a commercial agency agreement.
In such cases, the analogical application of P.D. 219/1991 leads to the recognition of goodwill indemnity, provided that the distributor has substantially contributed to the development of the supplier’s market. At the same time, the distributor retains claims under the Civil Code.
The legal assessment is always case-specific and requires careful evaluation of both the contractual terms and the actual performance of the agreement, as well as meticulous handling of evidentiary material.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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