The following summary is provided for educational purposes, and not meant to be legal advice.
Territorial or customer allocations involve restricting a distributor from selling to certain customers or territories. Generally, a company must not partition markets by territories or customers.
Examples of territorial or customer restrictions: Company (a) specifies one price to a distributor if that distributor is selling in its own territory and another if the distributor intends to export to another country, (b) bans a distributor from exporting out of its territory altogether, (c) limits a distributor from purchasing products from other appointed distributors or forces the distributor to purchase from a given source.
Despite the general rule, there are permitted strategies, such as providing product price discounts or requiring distributors to make geographic investments, that encourage distributors to focus on specific territories and customers.
Comment Preview