Importing of frozen food from an Indian manufacturer. Exclusivity and Liability

Asked about 1 year ago - Naperville, IL

We are planning on importing frozen food products from an India, can we get into contract with the manufacturer for rights of exclusive sale of their products in USA? Also if there are any claims with relations to the products, who will be liable? As the manufacturer has no presence in USA.

Attorney answers (2)

  1. Joseph Andrew Brabender IV

    Pro

    Contributor Level 18

    2

    Lawyers agree

    Answered . Unless this is a big money deal, you have very little legal remedy if it goes sour. Because the Indian company has no presence here, you would likely have to sue, or at least collect, in India. The legal fees in an international dispute would be very substantial.

    If there is a defective products claim, the plaintiff will sue everyone. You will be an easier target as you are in the US. The solution to this is to obtain insurance.

    If this is a multi-million dollar deal, you should get an attorney familiar with this area of law. If you just own a little shop or are selling online and can't afford a lawyer, get insurance and focus on marketing your product rather than the intricacies of international contract disputes. Don't take on much risk yourself (sending lots of money to India before the product arrives, placing large orders, ect.) as the company may disappear or just stop talking to you.

    Anytime you own a business, it's a good idea to have a business lawyer to consult since staying out of trouble is far cheaper than digging yourself out afterward.

    Good luck.

    Though we strive to provide accurate legal information in our answers on AVVO, our answer should not be construed... more
  2. Bruce E. Burdick

    Pro

    Contributor Level 20

    Answered . I am thinking you might be wanting to be getting insurance in this situation and figuring you will be needing business lawyer. Just practicing my Indian jargon.

    Seriously though, of course you can try to negotiate an exclusive territory, but with that will come certain obligations, usually minimum volumes, minimum advertising levels, and full liability for problems. Perhaps you can offset liabilities against any payments you owe the Indian supplier, or perhaps the supplier requires advance payment. You will want to try to keep a reserve (hold back say 10% of payments until a certain reserve dollar amount is met sufficient to protect you against liabilities). This is all negotiable, and you might want a lawyer to help you negotiate and advise you what you need to be negotiating and what you should insist upon.

    I am not your lawyer and you are not my client. Free advice here is without recourse and any reliance thereupon is... more

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