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170C H A P T E R I Xprincipal may be an importer of the products for a specified period or a distributor whoexecutes subdistribution contracts.Given the purpose of this type of contract, generally the products subject to the distributionagreement are those that can be standardized or produced in a series. Commonlythey are products protected by a trademark.Pricing and the price setting are fundamental elements of the distribution agreement.A distinction must be made between the price that the manufacturer designates for resaleor for the final consumer and the purchase price to be paid by the distributor. Normallythe final price serves as a basis for the price between producer and distributor, which isset with a discount or a rebate. In practice the custom is that the price set by the principalcan vary, due to innumerable circumstances that can directly affect its determination;for example, the purchase volume within a particular period. The principal usuallyperiodically informs its distributors of the new prices and provides them with the pricelists to which the operations will be subject for a specific period.In the event that the location of payment and delivery of the merchandise is not stipulatedin advance, since this type of contract is not expressly regulated under Mexicanlaw, the provisions of the Commerce Code (Código de comercio) applicable to purchasesand sales would be applied or, in their absence, those of the Civil Code (Código Civil).Another aspect of special importance in this type of relationship is the clear and preciseestablishment of resale conditions, which can vary greatly, since they depend on thenature of the products and the agreement between manufacturer and distributor. Theobligation of the distributor to respect the resale conditions is probably what characterizesthe distribution agreement most; this is in view of the fact that the primary interestof the principal is in marketing its products through someone over whom it has sometype of control. These resale conditions can, depending on the characteristics of theproducts involved, refer to aspects such as the resale price, the form and place of collection,post-sale service, warranties, advertising, and manner of trademark use, mannerand place of exhibiting products, repair and maintenance, contribution to the advertisingexpenditures, amount of merchandise, etc.It is common for producers that execute these types of contracts to require exclusivity,as a result of which the distributor cannot compete with or acquire products withcharacteristics similar to those contemplated in the distribution agreement. Underthese exclusivity agreements the distributors are understood to be prohibited not onlyfrom acting as distributors, but also as agents, representatives or intermediaries.The establishment of this exclusivity agreement merits special attention, becausesometimes it can be considered as a violation of the Federal Economic Competition Law(Ley Federal de Competencia Económica) regarding relative monopolistic practices. Toprove that the exclusivity agreement or the distribution agreement itself is a relativemonopolistic practice in violation of the law, it must be shown that the party requiring