Market Entry in the U.S.

There are several ways to enter the U.S. market: direct sales from Germany, partnering with a distributor, or establishing a company in the U.S. Each of these options has different implications for liability, may give rise to a separate tax liability in the U.S. (keyword: nexus), and affects how intellectual property rights are allocated. Which option is best in a specific case depends on the business model, the planned sales volume, and the desired market presence.

We evaluate the options listed above in the context of your specific situation and use this analysis to develop a recommendation for the most appropriate structure. If necessary, we will coordinate with your tax advisors to ensure that corporate and tax law issues are considered together, and we will then support the implementation—from incorporation or contract negotiation to ongoing management of the chosen structure.

Contracts governed by U.S. law definitively govern the terms of the agreement—unlike under German law, there is no recourse to statutory fallback provisions such as those found in the German Civil Code (BGB). Clauses regarding indemnification, limitation of liability, warranties, governing law, and venue therefore directly determine the economic risk of a contract. A review of standard terms and conditions, as is customary under German law, does not exist in this form under U.S. law, meaning that each clause must be negotiated and reviewed individually.

We draft, review, and negotiate contracts directly in accordance with U.S. law, rather than simply translating German contract templates. Where differences from the German understanding have economic implications, we explain them to you in concrete terms so that you can assess the implications of individual clauses before signing the contract.

When establishing a sales structure in the U.S., the first decision is whether to choose a distributor, a sales agent, or to set up your own sales company, and each of these options manages sales risk, pricing, and customer relationships differently. Individual states provide additional protection for sales partners through their own dealer and franchise laws, which may restrict termination to specific grounds or ensure exclusivity even if the contract terms do not explicitly provide for it. Territorial and termination rules are primarily governed by the contract but are subject to these state protective regulations, which vary in strictness from state to state.

We structure your sales operations in a way that allows for a future change in distribution partner or expansion of the structure, and to that end, we review in advance which dealer or franchise laws apply in the respective state. We ensure that termination, exclusivity, and territorial rules comply with the laws of the relevant states so that your structure remains legally sound even if you change distribution partners.

Supply, license, and cooperation agreements with U.S. partners are governed by the Uniform Commercial Code (UCC) and the contractual practices of the respective state. Warranties and disclaimers, as well as the allocation of liability between the parties, differ significantly from German sales law: The UCC provides for its own implied warranties—such as the merchantability of the goods—which can be effectively excluded by contract only under certain conditions. A literal translation of German contract templates does not account for these differences.

We draft and negotiate these contracts—working with our colleagues in New York, Boston, or San Francisco as needed—and take special care to ensure that the agreed-upon terms are enforceable for you in the event of a dispute—for example, regarding the choice of forum, governing law, and dispute resolution mechanisms.