Exclusive distribution agreements are vital for the day to day movement of goods through the chain from the manufacturer to the retailer.
If you want to know about distribution agreement and download exclusive distribution agreement templates, here is the right place to continue.
What is a Distribution Agreement?
A distribution agreement is a legal document between the distributor and the supplier. It stipulates the duties and the responsibilities that both these parties are obligated to.
There are two types as following:
- Exclusive Distribution Agreement: The supplier will grant the distribution rights only to the said distributor for a given territory. Even outside of the agreement, he or she cannot grant the distribution rights to any other distributor for the territory.
- Non Exclusive Distribution Agreement: The supplier might grant the distribution rights of the product to multiple distributors in the territory. These agreements are generally less strict than exclusive distribution agreements.
Who Needs a Distribution Agreement?
A distribution agreement can be drafted by the distributor and the supplier. The distributor might want an exclusive distribution agreement to make sure that no other distributor is giving them competition in the mentioned territory.
The supplier needs a distribution agreement to make sure that the distributor is keeping up with the quality standards. Further, distribution agreements can also make sure that the distributor is focussing only on the supplier’s goods.
What Are the Benefits of Having a Distribution Agreement?
The distribution agreement lays clear responsibilities of both parties. Therefore, if either of the party fails to deliver on the terms of the agreement, there can be penalties involved as they are laid out in the distribution agreement
Further, it ensures that the distributor is providing good performance and sales numbers. On the other hand, the dealer provides distribution rights only to the particular distributor for the territory to protect the distributor's interests.
What is Included in a Distribution Agreement?
Here are the common contents that are found in most distribution agreements:
- A distribution agreement should clearly define the dealer/supplier and the distributor between which the agreement is taking place. This is vital and without this section, the distribution agreement can hold no meaning.
- The terms and conditions of the sale should be clearly defined in the distribution agreement. It should also contain details on the marketing and trademarking rights on the products.
- The territory on which the dealer is giving the distribution rights to the distributor.
- Performance and reporting for the sales of the products. There can also be clauses about minimum performance required to maintain the distribution rights.
- Circumstances or scenarios which can lead to the termination of the agreement.
There are many more clauses that are common in distribution agreements and each clause needs to be worded carefully to maintain the agreement from a legal point of view.
At Cocosign, you can download any agreement template that you require for your business. Not just that, any template takes just a single click to download.
You can even request customized templates to be created for your particular needs. They can contain the clauses that you want, and you just need to print them out and sign them.
If you want a distribution agreement that is valid legally and in implementation, you cannot take any chances. Get your distribution agreement template from Cocosign and avoid any legal trouble that might arise in the future.
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