Part 1: Legislative framework
Q1. Please specify the legislative framework generally applicable to the conclusion and execution of distribution agreements (a)? Please include a link to the official publication of the applicable rules (e.g., relevant link to the Official Gazette) (b) and, if available, to the English translation of the legislative framework (c).
a. Legislative framework:
Croatian Competition Act
(Official Gazette number 79/09, 80/13, 41/21)
Croatian Obligations Act
(Official Gazette number 35/05, 41/08, 125/11, 78/15, 29/18)
Vertical Agreements Block Exemption Regulation
(Official Gazette number 37/2011)
Distribution and Motor Vehicles Service Agreement Block Exemption Regulation
(Official Gazette number 37/2011)
b. Link(s) to official publication:
The Croatian Competition Act is available via these links: 810, 1671 and 1877.
Croatian Obligations Act is available via these links: 586, 1495, 1382 and 707.
Vertical Agreements Block Exemption Regulation is available via this link.
Distribution and Motor Vehicles Service Agreement Block Exemption Regulation is available via this link.
Q2. Other than for agency agreements pursuant to Directive 86/653 (EEC) on the coordination of the laws of the Member States relating to self-employed commercial agents, are there specific rules depending on the distribution format (e.g. franchising, exclusive distribution)?
Q3. Other than general contract law and competition law, are there other rules which may generally restrict the parties when drafting and concluding distribution agreements (e.g., rules in relation to unfair contract terms in B2B contracts, specific requirements in the context of a prohibition of abuse of economic dependence)?
If yes, which general rules apply (a)? Where available, please also include a link to the official publication of the applicable rules (b) and to the English translation of the regulatory framework (c).
a. General rules:
Croatian Trade Act (Official Gazette number 87/2008, 96/2008, 116/2008, 76/2009, 114/2011, 68/2013, 30/2014, 32/2019, 98/2019, 32/2020)
Act on Prohibition of Unfair Trading Practices in the Food Supply Chain (Official Gazette number 117/2017, 52/2021)
b. Link(s) to official publication:
Croatian Trade Act is available via these links: 698, 1965, 648, 508, 1349, 2222, 3351, 2998, 2790.
Act on Prohibition of Unfair Trading Practices in the Food Supply Chain is available via this link.
Part 2: Pre-contractual phase
Q4. Are there mandatory provisions in relation to the disclosure of pre-contractual information prior to concluding and/or executing distribution agreements?
Q5. Is there a standstill obligation linked to the requirements imposed for the pre-contractual phase?
Q6. Does the relevant regulatory framework impose sanctions if the pre-contractual obligations are not (fully) respected?
If yes, which sanctions apply (e.g., nullity of contract, penalty payment)?
Pursuant to the Obligations Act, there is extra-contractual liability for conducting negotiations contrary to the principle of good faith and fair dealing. Also, the Obligations Act sets out the general principle of extra-contractual liability for making available to third parties or using in one’s own interests confidential information received through negotiations, regardless if the agreement was entered into or not.
Q7. Can a party be held liable if it terminates the pre-contractual negotiations?
If yes, on what grounds (a); under what conditions (b); and what consequences are generally linked to such liability (c)?
a. Grounds for pre-contractual liability:
Art. 251 Croatian Obligation Act.
b. Conditions for pre-contractual liability:
Any party is in principle free to terminate pre-contractual negotiations, but it is required to negotiate respecting the principle of good faith and fair dealing, with the intention to conclude the agreement.
c. Consequences of pre-contractual liability:
The damaged party may be entitled to damages.
Q8. Are there other relevant rules and/or restrictions that apply during pre-contractual negotiations between supplier and distributor?
Part 3: Contractual phase
A. Form of distribution agreements
Q9. Must a distribution agreement be executed in writing to be valid and enforceable?
Q10. Are there any (other) requirements as to the form of the distribution agreement for it to be valid and enforceable?
B. Content of distribution agreements
Q.11 Other than restrictions imposed by EU competition law (including Regulation (EU) 330/2010), do specific rules and/or restrictions apply in distribution agreements with respect to
- the territory in which or the customers to whom the goods/services will be sold;
- an exclusivity granted to the distributor;
- (exclusive) sourcing/purchasing obligations;
- resale prices;
- non-compete clauses
Q12. Do specific rules and/or restrictions apply in distribution agreements with respect to
- obligations of the supplier vis-à-vis the distributor, including in relation to the remuneration of the distributor;
- obligations of the distributor vis-à-vis the supplier or vice versa;
- a non-solicitation clause during and/or after the term of the distribution agreement;
- minimum sales quota imposed on the distributor;
- specific sector rules?
Yes specific rules apply to obligations of the supplier vis-à-vis the distributor, including in relation to the remuneration of the distributor.
If yes, what do these specific rules and/or restrictions entail?
Although there are no statutory provisions specifically applying on distribution agreements, distributors sometimes claim additional renumeration relating specifically to agency agreements (Art. 830 of the Obligations Act). Under that provision, the agent is entitled to additional renumeration if having found new clients for the principle or if having significantly increased the business with the existing ones, however provided that the additional renumeration is justified by the circumstances of that individual case. So far, the courts (first or second instance) have not supported such standpoint but there has been no stance from the Supreme Court on this issue. So far, the courts have not supported such standpoint but there has been no final stance from the Supreme Court on this issue.
C. Term and termination
Q13. Are there particular rules and/or restrictions in relation to the term (incl. renewal) of distribution agreements?
Q14. Are there any specific rules and/or restrictions with respect to the termination of distribution agreements (e.g. minimum notice period, statutory right to compensation (goodwill or other))?
Q15. Is it possible to terminate the distribution agreement based on certain grounds for termination (breach or other) included in the distribution agreement?
If yes, is prior judicial intervention required in order for the termination of the agreement to take effect?
Part 4: Post-contractual phase
Q16. Is the supplier required to repurchase the stock that is still at the distributor’s disposal when the distribution agreement ends?
Q17. Are there other post-contractual obligations that generally apply to either of the parties in the context of the termination of the distribution agreement?
Part 5: Dispute resolution
Q18. Do specific rules and/or restrictions apply as regards the choice of forum and/or jurisdiction?
Q19. Can the parties opt for arbitration?
If yes, are there any rules and/or restrictions as regards the enforceability of arbitration clauses in distribution agreements?
Q20. What is the statute of limitations applicable to claims regarding the performance of a distribution agreement?
Any damages claim for breach of performance of a distribution agreement is limited to the limitation periods set in the Obligations Act. General limitation period is five years (for B2C, for example), however the limitation period for most commercial (B2B) agreements is three years.
Part 6: Additional comments
Croatian competition law adheres to the principles established under EU competition law so that there are no specific deviations in the law or the case law to be reported.