Distribution Agreement Templates

What is a Distribution Agreement and what should be included in it?

Not to be confused with an Equity Distribution Agreement, a Distribution Agreement is a contract that outlines the relationship between a supplier or manufacturer of products with another party who agrees to sell those products. That party is the distributor and will often purchase the products from the supplier and sell them under their own trading name. It is sometimes also referred to as an Exclusive Distribution Agreement if the seller is the only distributor for a supplier.

Any enforceable and reliable Distribution Agreement (like ours) should include the following elements as standard: 

  • Distribution right - Outlining that the supplier is giving the right to distribute to the distributor
  • Distributor’s obligations - What is required of the distributor
  • Supplier’s obligations - What is required of the supplier
  • Purchase orders and purchase order confirmations - How the distributor orders goods from the supplier and how those orders are dealt with. 
  • Delivery - When goods are required to be delivered. 
  • Price and terms of payment -  Who sets the prices of the products to be sold and what happens in the case of a price change. 
  • Warranty - The state of the goods to be sold. The process if goods are defective upon delivery to the distributor. 
  • Product liability - The supplier is liable should there be any problems caused by the products. Both parties need to hold product liability insurance to a defined amount. 
  • Intellectual property rights - The supplier owns any intellectual property. How any infringement of intellectual property rights are approached. 
  • Confidentiality - All information regarding the agreement shall remain confidential. 
  • Limitation of liability -  When a party shall not be held liable due to a force majeure, and how such instances should be dealt with. 
  • Duration - How long the agreement will last and how long a distributor can sell products for, once the agreement has been terminated. 
  • Any other terms

Our Exclusive Distribution Agreement also includes these clauses: 

  • Trademarks - Who owns the relevant trademarks.
  • Sell off period and repurchase of Inventory - the supplier has the option to repurchase any leftover stock at the end of the agreement. 
  • Independent Contractors - Neither party can enter into an agreement for the other party. 
  • Non-publicity - Similar to the confidentiality clause. 
  • Assignment - Neither party can assign the agreement or transfer it to another third party.
  • Governing Law - What jurisdiction governs the contract. 
  • Survival of Provisions - What provisions in the contract survive the termination of the agreement.

When should I use a Distribution Agreement?

You should use a Distribution Agreement before entering into a professional relationship with another party to either sell their products or for them to sell your products. Without a Distribution Agreement, you are putting yourself at risk that a verbal agreement you have come to is not enforceable. It means you are leaving yourself open to huge financial risks that the other party will not uphold their end of the bargain. 

For instance, they may sell your products for far less than agreed - undercutting other distributors of your goods - or, on the other side, you may believe to have entered into a verbal exclusive Distribution Agreement with another party - only for them to also allow another entity to sell their goods as well. 

Why should I use a Distribution Agreement template?

A Distribution Agreement should be used to help ensure that the resulting relationship is based upon a reliable and accurate legal document that can be used in the future - either as a form of legal protection or simply to help enhance the professional relationship between a Supplier and a distributor. 

For example, when it comes to an Exclusive Distribution Agreement, our contract template will ensure that the particular specifics surrounding the exclusivity are clearly defined so that there is no room for confusion or misunderstanding between the two parties. Instead, a highly effective working relationship can be formed due to the increased trust that a strong contract can provide. Importantly, any chance for legal disputes is much diminished too. 

Where and how should I use a Distribution Agreement template?

You should use a Distribution Agreement template whenever you need to create a Distribution Agreement quickly, yet do so in a way that creates a contract that is reliable and enforceable. Templates are great to use as details can be modified easily, while the data and clauses remain pertinent and useful for both parties. Templates also eradicate the need to draw up a contract and agreement from scratch every time you need one. Instead, details and information can be inserted swiftly and even from information extracted from other documents, thanks to our dynamic data format. The result is a document that not only takes far less time to establish, but the information included is also far more likely to be accurate as opposed to when a more manual way of drawing up an agreement is used. 

Additionally, our platform has so many other benefits when using our templates. Users can store final documents in our cloud storage, meaning that they can be accessed painlessly each and every time it is needed for reference. It also allows for easy and effective collaboration between parties that make negotiations far more powerful - and quicker - as a whole. When contracts are finalized using our software they, therefore, become powerful assets for both parties to use, while also ensuring that the resulting relationship is built upon trust and respect. 


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