Distribution agreement: merchant version

This is a practical agreement for an arrangement whereby a merchant or a manufacturer appoints a distributor who buys the goods and re-sells on his own account at home or abroad.
Suitable for use in: England & Wales and Scotland
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About this document

This agreement sets out a standard distribution arrangement where a manufacturer agrees to supply a distributor to market and sell the manufacturer’s goods on his behalf in a certain territory.

Because there is little law regulating such agreements, you have a lot of freedom in choosing exactly what deal you come to. However, it is likely to take into account a number of issues (that are listed in the contents below) such as retention of title, brand protection and pricing.

This version favours the manufacturer slightly by giving the distributor more obligations and fewer rights. We have a similar document that shifts the advantage to the other party as well as a shorter version that may be more attractive if less is at stake.

Depending on how much power the manufacturer has, it could be used as a non negotiable contract put to a potential distributor, or as a working document on which a final negotiated contract will be based.

The agreement is under UK law, but either party could be based abroad.

Selected contents

  • Setting up the agreement
  • Appointment of distributor
  • Obligations of each party
  • Compliance and regulation
  • Products recall
  • Minimum sale requirements
  • Distributor's marketing obligations
  • Distributor's liaison and reports
  • The price, orders and acceptance
  • Delivery and transportation
  • Payment terms, including payment on running credit account and payment by letter of credit
  • Risk and retention of title
  • Products defective or not as ordered
  • Warranty and service policy
  • Disclaimers and limitation of liability
  • Mutual indemnities
  • Assignment and change of control
  • Confidential information
  • Intellectual property
  • Duration and termination
  • Other important legal provisions
  • Options for six schedules you will probably need

This document was written by a solicitor for Net Lawman. It complies with current English law.

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