Your Israeli distributor asks for exclusivity. Your sales team agrees in principle, but headquarters still wants to supply a global customer with operations in Israel. Another customer buys through an overseas affiliate. Before discussing a final distribution agreement, the commercial proposal needs a more precise question: which customer relationships are actually included?
An unclear reserved-customer clause can turn an ordinary direct order into a dispute over exclusivity and compensation. The conflict may spread across affiliates, online sales and repeat orders long after the agreement is signed.
A country name does not answer who handles a global account, an affiliate’s order or the next product line.
Start with the sales you intend to keep
Prepare a proposed reserved-account list before exchanging another version of the draft. Identify the customer entity, the relationship owner and the intended sales route. Separate existing customers from prospects and distinguish confirmed orders from informal discussions. Keep assumptions visible rather than presenting them as agreed facts.
Consider a hypothetical global customer whose headquarters places an order abroad while an Israeli facility receives the goods. Is your commercial proposal to handle that order directly, route it through the distributor, or negotiate a separate arrangement? This is a decision for the deal team and its lawyers, not something to leave buried in the word “territory.”
Compare the customer list with the distributor’s proposal
Read the proposed account list alongside the distributor’s requested scope. Mark overlaps in a separate negotiation schedule: named customers, customer groups, products, online orders, inbound enquiries and future affiliates. For each overlap, record what your team proposes and what remains unresolved.
Do not treat an account name as a complete business description. Ask whether the proposal concerns one purchasing entity, a group of companies or a specific facility. If the distributor expects to develop a customer that your own team already approaches, identify the disagreement before anyone describes the account as allocated.
Work through a transaction, not only a definition
Test the proposed arrangement against a hypothetical order. Who receives the enquiry? Who prepares the quotation? Who negotiates technical changes, supplies the goods and handles follow-up? If the customer asks to order through a different affiliate, what commercial outcome does each side want?
Use those answers to draft the actual allocation: the named customer entities, covered products, sales route and responsibility for local support. Address how new affiliates, additional sites and later product lines will be added. A mechanism for updating the account schedule is more useful than relying on an informal understanding that the global relationship belongs to headquarters.
Separate the account discussion from the economics
There may be several commercial proposals for an overlapping account: direct supply, distributor involvement in local service, or a separately negotiated fee arrangement. Present each as a proposal, with its assumptions and unresolved cost questions. Do not quietly include a payment commitment in a spreadsheet that the other side has not discussed.
If the distributor is expected to support a reserved account, negotiate the work and remuneration explicitly. The agreement can address who quotes, invoices, provides local service and receives any agreed fee, together with the treatment of returns or cancelled orders. That alignment keeps the reserved-account schedule consistent with the economic deal rather than leaving compensation to a later argument.
If the relationship already exists, start with the current file
An amendment discussion needs its own starting point. Bring the signed agreement, amendments, relevant correspondence and a clear account history to legal review. Distinguish the arrangement you now want from what the documents and past communications actually say. Do not label a customer “reserved” merely because your internal sales system uses that term.
Where the parties are already arguing over customers, payments or exclusivity, the next step is a coordinated legal response to the documents and dispute.
Negotiate the arrangement before the final signature
Our firm’s commercial agreements service can assess the existing rights, negotiate reserved-account boundaries and draft the customer schedule, update mechanism and payment terms. If competing claims have already arisen, we can connect the sales history and contract wording to a coordinated response, rather than treat the next direct order as an isolated operational issue.
Negotiating an Israeli distribution agreement?
Reserved customer accounts can become a source of conflict over exclusivity and commission. Contact our firm to negotiate the distribution terms and address competing customer and payment claims. Contact RNC on WhatsApp | Email the firm
This article is for general information only and does not constitute legal advice. Laws and their application depend on the facts and jurisdiction and may change. Although we aim to keep this information accurate and current, we do not guarantee that it is complete or up to date. The article may contain omissions or errors. Reading this article does not create an attorney-client relationship with RNC Group. Before making a decision or taking action, seek advice from a qualified lawyer in the relevant jurisdiction.