Distributor Agreement

What we’ll cover

• About Distributor Agreements
• Distributor Agreement Agreement FAQs
• Distributor Agreement Checklist

What is a Distributor Agreement?

A Distributor Agreement is a legal contract between a manufacturer or supplier and a distributor that outlines the terms and conditions under which the distributor is authorized to sell or market the supplier’s products. The document usually specifies the goods or services to be distributed, the distributor’s selling territory, how much products cost, deposits or full payments, each party’s duties, the agreement length, how to end it and whether the distributor is given exclusive rights in a territory. It is made to ensure both parties are clear about what they must do and to help prevent any conflicts during business operations.

When Can You Use a Distributor Agreement?

• If a manufacturer wants to start operations in another geographic area and doesn’t know the market, they may appoint a local distributor.
• When products are sold not directly to end customers but through dealers, retailers, or channel partners who handle sales and customer service.
• When offering a new product, a distributor agreement can clarify how it will be marketed, what the pricing will be and the intended customers.
• Any company that wants to concentrate on manufacturing and hand over distribution, logistics or customer care to another company.

About Distributor Agreements

A Distributor Agreement legally defines the rights, responsibilities, and terms between a supplier and distributor—ensuring smooth, secure, and compliant partnerships.

How To Write A Distributor Agreement

A Distributor Agreement is the legal contract stating how a supplier and a distributor will operate toward the sale of products. A Distributor Agreement has to be well written with clear rules so that both sides have an understanding of their rights and duties. Here are some important points that you may want to include in your Distributor Agreement Template:

1. Products and Territory

Specify what products are covered and define the area where the distributor may sell. This helps avoid potential confusion as to the location and something permissible to be sold.

2. Appointment and Exclusivity

Whether the distributor carries exclusive rights to sell the products in that area for that Exclusive Distribution Agreement or whether other sellers may also carry the same rights.

3. Pricing and Payments

Are prices fixed? Is payment due upon delivery? Discounts allowed? Touch on these points.

4. Distributor’s Obligations

What is expected of the distributor-e.g. advertising of products, meeting sales targets, and servicing customers? 

5. Trademarks Use

Allowing the distributor use of the supplier’s trademarks and logos, but protecting the supplier’s intellectual property accordingly.

6. Duration and Termination of the Contract 

It states the period for which the Distributor Contract remains in force and how either of the parties may terminate it.

7. Confidentiality and Non-Circumvention

Safeguard any sensitive information exchanged between the parties, along with preventing the distributor from bypassing the supplier to deal directly with customers. 

8. Liability and Indemnity

This will be a declaration of liability in the event of default and the types of damages that may be awarded.

9. Governing Law and Dispute Resolution

State which laws will be applicable and the manner in which disputes will be resolved.

10. Other Important Terms

The extra points such as how the agreement can be changed, assignment of rights, and force majeure events.

Writing your Distributor Agreement with these key points ensures a clear, fair, and legal document. Whether you use a Distributor Agreement Sample or go ahead with a very detailed Distributor Agreement PDF, you have to ensure it fits your business. Consider getting advice from a legal expert to meet all legal requirements with your Distributor Agreement Terms.

Distributor Agreement FAQs

Distributor Agreement Checklist

1. Create a Custom Distributor Agreement

The first step is to prepare a Distributor Agreement suited to your business style. We at Draaft will guide you through every single section-from product scope to payment terms, to territory rights-to make sure nothing is left behind. You may leave the project halfway and come back to it later at any time.

2. Review Key Terms and Distributor Obligations

Once the agreement is drafted, the entire terms must be looked into closely to ensure that the said agreement clearly defines the distributor’s obligations, exclusivity clauses, sales targets, and use of intellectual property. Provide the distributor with a copy so that there will be no confusion or disputes later.

3. Formal Execution of the Agreement

Both parties involved shall go through the final draft of the agreement and sign it. By doing so, the agreement shall be binding on both the supplier and distributor and will serve as protection for the parties’ business association.

4. Store and Distribute Copies of the Signed Agreement

Upon execution of the contract, copies must be deposited among parties. A signed copy is securely maintained on Draaft, which is available for easy download, print, or sharing formats.

5. Periodic Review and Edit as Needed

Sometimes the business objectives and distributor performances change with time. So let’s revisit the terms of your Distributor Agreement to update the territorial scope or the price lines. In this way, the Distributor Agreement remains open for legal identity and mutually beneficial.