Distribution agreement

About this document

This agreement sets out an arrangement with a distributor who buys goods from a manufacturer or merchant and who markets and sells those goods in a particular territory.

It includes terms relating to how the distributor can use the brand name of the product or of the manufacturer in advertising and marketing, and enhanced protection of the intellectual property of the manufacturer. These provisions affect many aspects of the deal. We have provided a specific licence to cover exactly what your distributor may or may not do.

The product may be a FMCG such as a clothing line, or branded consumer durables such as sports equipment, or a patent protected industrial product.

Your distributor may sell on to other retailers in a set geographic area or may sell the product through its own retail channels (for example, through a website and a number of high street shops).

As well as extensively covering brand and trade mark protection, this agreement deals thoroughly with all the other issues you would expect it to cover.

We have worded the agreement in ways that seem simple and reasonable, but most provisions are there to safeguard your position and not your customer’s.

The distributor is responsible for all aspects of compliance with local law, whether relating to the product, the customer, importation or duties and taxes.

We have covered product recall, minimum sales requirement, marketing and reporting. We have provided a joined up procedure taking in: order, acceptance, delivery, risk, title, payment, returns, and so on.

The contents of this document could be edited in the course of negotiation, but its best purpose is to use as a standard terms document that any retailer must sign if he wishes to sell your products.

Alternative versions

We also offer a shorter agreement for use where the arrangement is less complicated, and a similar version to this one without such extensive IP protection clauses.

Contents

• Setting up the agreement
• Appointment of distributor and licence to use intellectual property
• Price
• Protection of intellectual property
• Distributor’s administrative and marketing obligations
• Approval of marketing plan and minimum sales
• Liaison and reports
• Protection of brand
• Manufacturer’s obligations
• Compliance and regulation
• Orders and acceptance
• Delivery and transportation
• Payment terms, including running credit account and letter of credit
• Risk and retention of title
• Returns and products defective or not as ordered
• Warranty and service policy
• Products recall
• 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 schedules you will probably need