What sales restrictions are
Sales restrictions specify where, how or to whom goods may be resold: for example not in Germany, not in the DACH region, not in the EU or not through certain online channels. They protect the brand and the home market of the seller or manufacturer.
They are common when a manufacturer or retailer sells surplus stock but does not want the goods to undercut its own sales.
Typical sellers are manufacturers placing surplus production, retailers with branded goods and companies clearing stock after a closure or an insolvency.
Why they exist
Restrictions protect price levels, authorised sales channels and the image of a brand. They may also follow from contracts with distributors or other business partners. Which of these reasons applies to your goods is for you and your advisers to assess.
For the buyer, a restriction defines what the goods may be used for. That makes it a condition of the deal, not an afterthought.
A well-defined restriction can also protect the seller’s own business relationships, for example with authorised retailers who would otherwise face undercutting.
Typical examples
Restrictions come in several forms and can be combined. Where several apply, list them separately for each article or product group so that nothing is lost in a general statement. Typical examples are:
- Country restrictions: no resale in Germany or the DACH region
- Region restrictions: no resale in the EU
- Channel restrictions: no resale through certain marketplaces or online shops
- Customer restrictions: sale only to professional resellers
- Time restrictions: no resale before a stated date
Put them in writing
Verbal agreements are hard to prove. State the restrictions in your enquiry and have them confirmed in the written offer together with the price. The more precisely territories and channels are named, the fewer misunderstandings arise later.
Specify what the restriction covers (all goods or only certain articles), how long it applies and whether it concerns only the first sale or later resales as well.
Keep the written confirmation with the sales documents. If the goods are resold in several steps, it is the document you can point to.
Passing restrictions on to buyers
A restriction only helps if it reaches the people who actually resell the goods. When you sell through an intermediary, ask whether and how the restrictions are passed on to their buyers. Overstock Germany, for example, observes the sales restrictions you specify and passes them on to buyers.
A buyer who knows the conditions in advance can plan around them. That is better for both sides than restrictions that come to light after the goods have moved on.
Ask the buyer to confirm in writing that the restrictions have been understood. A short confirmation is usually enough and gives both sides a clear reference.
Take advice on legal questions
Whether a restriction can be enforced, and how it interacts with competition or trademark law, depends on the individual case. This guide offers general orientation only. For a reliable assessment, consult a lawyer.
If a restriction forms part of a contract with a distributor or licensor, check that contract before the sale and involve your legal adviser early. How far a restriction carries through several stages of resale is also a legal question, which is another reason to seek advice.
Frequently asked questions
Yes. You can state sales restrictions, for example that the goods must not be offered in Germany or the DACH region. They are recorded in writing and observed.
They can, because they limit the number of potential buyers. Mention them from the start so that they are reflected in the offer.
This article is general information for businesses and does not constitute legal or tax advice. For questions about your individual case, please consult a lawyer or tax adviser.
