Key Clause Design for Agency Agreements and Letters of Authorisation

1. Key takeaways

The agency agreement and the letters of authorisation (LoA / PoA) used in Jordan must resolve one core issue: the registration certificate belongs to the AR, not to the manufacturer. GRZAN’s conclusion is that this ownership structure shifts the design focus of the agreement away from commercial terms and towards control of the registration asset. In practical terms, the agreement is the only instrument that protects the manufacturer’s continued access to its own registration once the commercial relationship changes.

• Second conclusion: compliance obligations in Jordan cannot be transferred to the AR by agreement so as to exempt the manufacturer. The enforcement path of the JFDA points at both the AR and the manufacturer simultaneously; the agreement can only define the internal allocation of responsibility and cannot be invoked against the regulator.
• Third conclusion: the agreement must cover five key clause groups — ownership of the registration certificate and its migration; termination triggers and the transition period; the division of vigilance duties; cooperation on change notifications; and exclusivity tied to performance conditions.

2. Legal basis

The design of agency agreements and authorisation documents in Jordan rests on the following instruments.

Clause numbers must be verified against the Arabic originals published in the Official Gazette of Jordan and issued by the JFDA; the amounts are the official fees listed in the JFDA fee schedule.

3. Expert insights

Insight 1: ownership of the registration certificate is the clause that most needs negotiating in Jordan. Because the registration dossier is bound to the AR, the certificate formally belongs to the AR. If the manufacturer has not agreed a migration-cooperation clause in the agreement, termination leads to deadlock — the certificate stands in the AR’s name, the manufacturer cannot sell, and the AR has no incentive to cooperate in migrating it. The migration clause is therefore the most valuable piece of leverage the manufacturer will ever hold over the AR, and it can only be obtained before signing.

Insight 2: the termination transition period must cover the certificate migration cycle. Migration involves selecting a new AR, obtaining acceptance for a new warehouse, filing the variation (25 JOD), issuing the certificate (20 JOD), and possibly waiting through review. The transition period should therefore be counted in months rather than in weeks. Planning the transition in weeks creates, in effect, an import stoppage, because no certificate can migrate that quickly.

Insight 3: the response times for vigilance duties should be quantified. The AR carries the duties of post-market surveillance, complaint handling and vigilance activities. The agreement should stipulate the time limit from becoming aware of an adverse event to notifying the manufacturer, the time limit for notifying the JFDA, and the duty to cooperate and the cost sharing for executing field safety corrective actions. Quantified timelines also make a breach observable: a missed working-day deadline is a fact, while a missed promise of promptness is an argument.

Insight 4: the cooperation duty for change notifications must be explicit. Certificate renewal, design changes and label changes on the manufacturer’s side involve variation filings to the JFDA (25 JOD). The agreement should set the AR’s cooperation deadlines so that a delay by the AR does not block the completion of a change. Variation work is unglamorous for a distributor, which is precisely why the deadlines must be contractual.

Insight 5: exclusivity should be bound to performance conditions. Distribution channels in Jordan are fragmented; exclusivity that is not linked to minimum purchase volumes or to market promotion investment easily leads to channel stagnation. GRZAN recommends setting quantified performance clauses and exclusivity termination conditions in the agreement. In a market of this shape, an underperforming exclusive agent blocks better partners as well as sales.

4. Practical recommendations

• Make the certificate migration clause a mandatory element of the agreement. Specify the post-termination duty to cooperate in migration, the duty to hand over documents, the length of the transition period and the liability for breach. Without this clause, every other protection in the agreement is secondary.
• Quantify the response times for vigilance and change matters in working days, instead of vague wording such as promptly or as soon as possible.
• Set performance-linked exclusivity clauses. Specify the minimum purchase volumes, the market promotion investment and the conditions under which exclusivity terminates.
• Agree the governing law and the dispute resolution mechanism of the agreement in advance. Cross-border agreements should fix the dispute resolution mechanism early to avoid procedural deadlock once a dispute has arisen.

5. Verification checklist

• □ The agreement states who owns the registration certificate and the post-termination duty to cooperate in migration
• □ The length of the termination transition period covers the migration and variation filing cycle
• □ The response times for vigilance duties are quantified across awareness, notification and execution
• □ The cooperation duty and deadline for change filings are explicit (variation study 25 JOD)
• □ Exclusivity is tied to minimum purchase volumes and promotion investment, with termination conditions
• □ The agreement designates the governing law and the dispute resolution mechanism
• □ The content of the letter of authorisation is consistent with the agreement and consular legalisation is complete
• □ The cited clause numbers have been re-verified against the Arabic originals of the Official Gazette

How GRZAN can help. GRZAN provides medical device and IVD registration, quality system, authorised representative and local testing support for the Jordanian market. Our team coordinates local importer arrangements, and supports post-market vigilance obligations. Business enquiries: info@grzanglobal.com