Sales Agent or Distributor: What a Manufacturer Signs and What It Means

Published by

David Argüello

CEO of Hurus AI · LinkedIn

An agent promotes transactions on the manufacturer's behalf, or concludes them in its name, in exchange for a commission. The agent does not bear the risk of the sale unless agreed otherwise (Spain's Agency Contract Act, Ley 12/1992, art. 1). A distributor buys and resells on its own account. When an agency agreement ends, there may be a notice period of up to six months and a goodwill indemnity (indemnización por clientela).

What an agency agreement is

Article 1 of Act 12/1992 defines the agency agreement: one person, an individual or a legal entity, undertakes toward another to promote commercial acts or transactions on a third party's behalf, or to promote and conclude them in a third party's name, as an independent intermediary and in exchange for remuneration. The agent does not bear the risk of the transactions, unless agreed otherwise.

Agent vs. distributor

• Who sells. Agent: The manufacturer, through the agent. Distributor: The distributor, on its own account
• Risk of the sale. Agent: The manufacturer's, unless agreed otherwise. Distributor: The distributor's
• Remuneration. Agent: Commission. Distributor: The margin between purchase and resale
• Relationship with the end customer. Agent: The manufacturer keeps the customer base. Distributor: The distributor tends to keep the relationship
• Termination. Agent: Notice period and goodwill indemnity (Act 12/1992). Distributor: Whatever the contract says

The distributor row describes common practice, not specific regulation. Review it with your advisor.

Notice period when the agreement ends

If the agreement is for an indefinite term, either party can end it by written unilateral notice. The notice period is one month for each year the agreement has been in force, up to a maximum of six months. If the agreement has lasted less than a year, it is one month. The parties can agree on longer periods, but the agent's notice period can never be shorter than the principal's (art. 25).

Goodwill indemnity

When the agreement ends, the agent may be entitled to an indemnity if it brought new customers to the principal, or significantly increased transactions with existing customers. The agent's prior activity must still be able to generate substantial advantages for the principal, and the indemnity must be equitable (art. 28.1).

The amount cannot exceed the average annual remuneration the agent received over the last five years. If the agreement lasted less than five years, it is calculated over the whole period (art. 28.3).

What to check before you sign

• Who should keep the relationship with the end customer. If it is you, an agent fits better.
• Exclusivity and territory. Which territory it covers and whether you can sell in it yourself.
• What it costs to exit. Notice period and possible indemnity.
• How the agent or distributor is measured. Meetings, orders, turnover; in writing.
• Who opens the first conversations. Finding the right candidate comes before any contract.

That earlier step is where we work at Hurus: identifying which candidates fit, detecting when they can talk, and opening the conversation with context.

This article is not legal advice. Consult a commercial lawyer before you sign.

Frequently asked questions

What is the difference between an agent and a distributor?

An agent promotes transactions on the manufacturer's behalf, or concludes them in its name, in exchange for a commission. The agent does not bear the risk of the transaction unless agreed otherwise (Act 12/1992, art. 1). A distributor buys the product and resells it on its own account. The contract and the liability change.

What notice period does an agency agreement require?

For indefinite-term agreements, one month for each year in force, up to a maximum of six. If the agreement lasts less than a year, one month. The parties can agree on longer periods, but the agent's notice period can never be shorter than the principal's (art. 25).

What is the goodwill indemnity?

Compensation the agent may be entitled to when the agreement ends if it brought new customers or significantly increased transactions, and its activity will keep benefiting the principal. It cannot exceed the average annual remuneration of the last five years (art. 28). Consult a lawyer before you sign.

Source: Act 12/1992 on Agency Contracts (Ley 12/1992 sobre Contrato de Agencia), text on the BOE website (informational page, no legal force).

Full guide: B2B prospecting for food and beverage manufacturers: 2026 guide

Last reviewed: October 18, 2026.