Buying and selling
Distribution agreement
The paper for a supplier appointing somebody to buy its products and resell them in a defined territory or channel. The distributor buys stock and sells on its own account, which is what separates it from an agent. Its central terms are exclusivity, territory, minimum commitments, what the distributor may say and show about the brand, and what happens to unsold stock and customer relationships when the arrangement ends. Exclusive and territory-limited arrangements attract competition rules in many places.
- In the catalogue
- Buying and selling
- Where it can live
- Any of the 184 governing laws
Who uses one
- Manufacturers and brands entering a new country or channel through a local partner.
- Distributors and importers taking on a product line.
- Companies moving from ad hoc wholesale orders to a structured arrangement.
What you are deciding
- The products covered, and whether new ones are added automatically
- The territory or channel, and whether it is exclusive
- Whether the distributor may sell competing products
- Minimum purchases or targets, and what happens if they are missed
- Pricing: what the supplier may set and what it may not
- Use of trade marks, and how the brand is presented
- Stock, returns and warranty handling
- Term, renewal, and what happens to stock and customers at the end
Blanks you leave stay blank and wait in the room. Nothing is filled in from a guess.
The sections a draft usually has
- 1The parties and appointment
- 2Products and territory
- 3Exclusivity
- 4Orders and supply
- 5Prices and payment
- 6Marketing and trade marks
- 7Minimum commitments
- 8Warranties and product recalls
- 9Term and termination
- 10Post-termination stock
A general outline, not a required one. What turns up in a draft follows what you described. A contract is written in the order a contract is read.
What people call it
The names this kind of paper goes by. They are here because people search for them. They also filter the catalogue. They are not a wordlist the door matches. At the composer you describe the deal in your own words instead.
- distribution agreement
- distributor agreement
- exclusive distribution contract
- territory agreement
- wholesale distribution agreement
- import distribution agreement
Questions people ask
- What is the difference between a distributor and an agent?
- A distributor buys the goods and resells them for its own margin; an agent sells on behalf of the supplier for a commission and does not take title. The legal consequences are quite different, and some systems give agents statutory protections.
- Can a supplier set the distributor's resale prices?
- Competition law in many jurisdictions restricts this sharply. Agreements of this kind usually deal in recommended prices and are drafted with local competition rules in mind.
- What happens to unsold stock when the arrangement ends?
- Papers of this kind commonly give the supplier an option to buy stock back, or the distributor a sell-off period. Leaving it unsaid is how a clean ending turns into a dispute.
General answers about the document. Not advice about your situation. Not written about any one country.
Where it lives
A contract names the legal system it is governed by. That is a separate decision from which paper it is. You pick it at the door, from any of the 184 units in Governing law, including England and Wales, Delaware, California and New York.
You do not start from this page. Describe the deal in one sentence at the door. Read the draft back in plain language, in the order a contract is read.
Start it at the door →Related kinds