The concept of a "distributor" entered Ukraine’s commercial practice following its independence and the liberalization of trade, which allowed both international companies to access the Ukrainian market and Ukrainian businesses to operate abroad. While the term “distributor” is not formally defined in Ukrainian legislation, distribution activities are now widespread and commonly referenced across legal and regulatory documents.

National regulation

Distribution agreements in Ukraine are considered "unnamed" contracts. They are concluded under the principle of freedom of contract, as outlined in the Civil Code of Ukraine (CCU), art. 3 and further detailed in art. 6 and 627 of the CCU. 
In addition to the general contractual framework, it is essential to consider other legal requirements when entering into distribution agreements. These include Ukrainian laws related to competition protection, product quality and safety, consumer rights, intellectual property, and advertising regulations. For international distribution agreements, the provisions of the Law of Ukraine "On Private International Law" should also be taken into consideration.

Form of distribution agreement

In the absence of specific regulations, the general requirements of the Civil Code of Ukraine and the Commercial Code of Ukraine apply to the form of distribution agreements. According to the CCU, art. 218 there is no mandatory requirement to conclude the contract in written form. However, if one of the parties to an international distribution agreement is a natural or legal person of Ukraine, in accordance with the Law on International Commercial Transactions, art. 31, such an agreement must be concluded in writing, even if the parties have subjected it to foreign law. 

Territorial and product-specific restrictions

The contract should also address any territorial or product-related restrictions. If the manufacturer grants the distributor exclusive rights within a specific region, such as Lviv Oblast – this geographical scope must be clearly defined in the contract, ideally supported by an annex listing relevant cities, districts, or even postal codes. However, overly broad territories (for example, Western Ukraine) may raise concerns under competition law. If the distributor’s market share in that region exceeds 35% (or less if there is insufficient competition due to the relatively small market shares of other players), it is advisable to consult with the Antimonopoly Committee of Ukraine (Antymonopolnyi Komitet Ukrainy – AMCU) and, if the agreement qualifies as an economic concentration, prior approval from the AMCU is required.

Exclusivity

By granting exclusive rights to distribute products within Ukraine, the supplier ensures controlled market entry, brand integrity, and limited competition within a defined territory.
For foreign manufacturers, exclusivity means that only one authorized partner, usually a local company, is allowed to import and sell their products in Ukraine. This arrangement minimizes the risk of unauthorized parallel imports and helps maintain stable pricing, consistent brand representation, and effective customer service.
From a regulatory standpoint, exclusivity must not lead to market monopolization or restrict fair competition. The AMCU allows exclusive distribution agreements but may scrutinize them if they: create barriers for market entry; impose resale restrictions (e.g., by restricting who they can sell to or where); fix resale prices (meaning the distributor is not allowed to set their own prices).

Product quality and warranty obligations

All delivered products must comply with applicable certification and labeling standards as required by law and the manufacturer’s internal quality regulations. For instance, in the case of electronics, it's essential that items carry verified certificates of conformity (such as national standards or relevant EU technical regulations). The labeling must clearly state the country of origin, production date, and usage instructions. When it comes to food products, compliance with hygiene regulations, storage requirements, and packaging standards, such as those under the State Standards of Ukraine (Derzhavni Standarty Ukrainy – DSTU) is crucial.

The agreement should also define a clear process for returning defective goods. For example, the distributor may be allowed to return up to 2% of the delivered products within 30 days of receipt, without providing justification. After this period, returns should be accepted only in the case of hidden manufacturing defects not caused by the distributor. The manufacturer must either repair the defective units at their own expense or offer appropriate compensation. 

Limitation of the manufacturer's liability for the quality of goods

In distribution agreements, especially international ones, it is common to find provisions limiting the liability of the manufacturer or supplier for the poor quality of goods. However, such provisions may be deemed invalid or void under Ukrainian law. Thus, the CCU, art. 614 establishes the nullity of a transaction that cancels or limits liability for intentional breach of obligation, and the Commercial Code of Ukraine, art. 206 and 217 expressly recognize as inadmissible and null and void the terms of contracts that exclude or limit the liability of the manufacturer and seller of goods or the performer of works or services.

Payments

Given the existing currency restrictions and customs regulations, payments to/from Ukraine made under the distribution agreement may be subject to restrictions. Sometimes, for practical reasons to facilitate customs and currency control procedures separate supply agreements are entered into in addition to the distribution agreement, under which customs clearance and payment for goods take place

Dario Gorji Varnosfaderani
Elizaveta Cherepanova

de Capoa Law Firm