Drafting Ironclad Distribution Agreements for South American Importers

If you’re a South American business importing goods into the U.S., or working with U.S. distributors, there’s one document you can’t afford to get wrong: the distribution agreement. This contract governs how your product enters the market, how it’s sold, and what protections those doing business in South America have if something goes wrong.

At Ayala Law, we’ve helped numerous international clients, especially from Latin America, structure their U.S. distribution relationships in a way that’s clear, enforceable, and protective of their long-term interests. This blog post explains what should go into a strong distribution agreement and why it’s essential for importers in South America doing business in Florida or the U.S. at large.

What Is a Distribution Agreement and Why Does It Matter?

A distribution agreement is a contract between a supplier (the exporter/importer) and a distributor (typically based in the destination market). It outlines the terms of sale, delivery, marketing, pricing, territory, and more.

For South American companies importing to the U.S., this agreement is especially important because:

• U.S. law differs greatly from legal systems in South America
• Distributors in the U.S. may have different expectations about exclusivity, liability, and performance
• Without clear contract terms, you risk product mismanagement, financial loss, or even litigation

What Should Be Included in a U.S. Distribution Agreement for South American Businesses?

Here are the essential components to consider:

1. Territory and Scope

Clearly define where your distributor can sell your products. Is it just Florida? All of the U.S.? Only online sales? This prevents overlap and channel conflict.

2. Exclusivity (or Non-Exclusivity)

Be explicit about whether the distributor is exclusive. If not addressed, this can lead to disputes down the line about whether you’re allowed to sell through other parties.

3. Minimum Purchase Requirements

Protect your business by including minimum purchase thresholds. This ensures the distributor is motivated to move your product and not just holding onto distribution rights.

4. Pricing and Payment Terms

Clarify who sets the prices, what discounts (if any) are allowed, and how and when payment is due. Be specific, unclear pricing terms are a frequent source of disputes.

5. Product Returns and Warranty Obligations

Address what happens when products are returned. Who handles warranty claims? Who pays for return shipping? Be sure to include language that limits your exposure where appropriate.

6. Marketing and Branding Restrictions

If you’ve built a brand in South America, you’ll want to protect that brand in the U.S. market. Set clear guidelines about how your name, logo, and marketing materials can be used.

7. Intellectual Property Protection

Make sure your trademarks, patents, and proprietary materials are protected. You should retain full ownership and control over your intellectual property.

8. Termination Clause

How and when can either party end the agreement? What happens to unsold inventory or unpaid invoices? Termination rights need to be fair, but also protective of your position.

Do You Need to Register Your Distribution Agreement in Florida?

Unlike some South American countries, Florida does not require distribution agreements to be registered with a government body. However, it’s critical to:

• Ensure the agreement complies with U.S. federal and state commercial laws
• Draft it in English, or as a bilingual contract, to avoid misinterpretation
• Make it enforceable in Florida courts if that’s where the distributor is located

Working with a U.S.-based attorney ensures your agreement isn’t just valid, it’s enforceable.

Common Legal Issues Importers in South America Face Without a Strong Contract

We’ve represented several Latin American clients who ran into serious problems due to weak or poorly drafted contracts. Common issues include:

• Distributors refusing to pay invoices on time
• Unauthorized changes to marketing and branding
• Sub-distributors selling outside the agreed territory
• Disputes over defective or returned products
• Distributors attempting to claim partial ownership of the brand or product rights

These risks can be minimized, or avoided entirely, with a well-crafted agreement tailored to your business goals.

Choosing Florida Law as Your Governing Jurisdiction

If you’re importing through Miami or working with Florida-based distributors, choosing Florida law and venue in your contract is often a smart move. It gives you a clear legal framework and ensures that disputes are resolved close to your point of entry into the U.S.

At Ayala Law, we frequently draft contracts that:

• Specify Florida law as the governing law
• Designate Miami-Dade County as the exclusive jurisdiction for disputes
• Include arbitration or mediation clauses to avoid prolonged litigation

This provides clarity, reduces costs, and protects you from facing lawsuits in far-away jurisdictions.

Why Work With a U.S. Attorney Familiar With South American Business Culture?

Having a legal team that understands both U.S. commercial law and Latin American business culture is crucial. Our founder, Eduardo A. Maura, is a Peruvian-born attorney who understands the nuances of cross-border transactions and what matters most to international clients.

We help clients:

• Translate their business model to a U.S. legal structure
• Avoid common pitfalls in cross-border agreements
• Draft contracts that reduce uncertainty and protect their long-term interests

Ready to Draft Your U.S. Distribution Agreement?

A generic contract template won’t offer the protection you need, especially across borders.

At our law firm, we can help you:

• Draft or revise your distribution agreement
• Advise you on U.S. commercial law and international trade matters
• Represent you in case of disputes or enforcement issues

If you’re an importer in South America planning to sell your products in Florida or the broader U.S. market, contact one of our experienced business attorneys in Florida at (305) 570-2208.

You can also contact business litigation attorney Eduardo A. Maura at eduardo@ayalalawpa.com.

You can also schedule a case evaluation here.