Territory and exclusivity. The agreement normally indicates an area in which the reseller will operate. The agreement also establishes whether they have exclusive and exclusive rights for the sale of these products in the territory or whether it is not an exclusive agreement. Normally, exclusivity is preferable for a distributor. Perhaps you want a clause that prevents the distributor from selling products that compete with yours both during the contract and for a period after the end. Also, you`ll probably want to be sure that the terms of the agreement will remain confidential. The agreement should also indicate the currency of the payment. For more information on competition law and distribution agreements, see horizontal and vertical agreements. Templates for appointing a distributor or agent are useful for you. These can be used without legal advice, but they are also very useful in giving you an idea of the type of issues that should be covered.
You can save legal fees if you first find what they want to include in your agreements and give a draft to a lawyer instead of asking the lawyer to rewrite your substantive agreements in part. It is essential that the terms of a distribution agreement are clearly defined and cover all relevant issues in order to avoid confusion and litigation in the future and to ensure that the agreed terms comply with competition law and other rules. It is therefore wise to get legal advice when designing and negotiating a distribution contract. You should also seek on-site advice before signing a sales contract, as there may be local laws that you need to consider – for example, it may be necessary for a distribution company to be owned by nationals of the country. Essential elements of a distribution agreement include the duration (period for which the contract is in effect), the terms of delivery, and the sales areas covered by the agreement (regions within the United States and/or international markets). Reseller is one of the many labels that we meet in this field. Other labels include distributors, value-added resellers (VARs), “partners” or “channel partners”, etc. all are expected to represent the role in a way deemed appropriate for any type of market ultimately defined by your target customers.
None of the labels is necessarily used exclusively by the others and a dealer can be described in more than one of these ways. The agreement must be secured on the territory or on the customers covered by the agreement. If the agreement provides for exclusive distribution, it is also appropriate to define the position with regard to areas not currently covered by the distribution agreements. Can the distributor sell in these areas? In the future, will it have the possibility of acquiring exclusivity in these areas? Who else can sell there? These issues must not only reflect the agreement between the parties, but also respect competition law. Specific payment terms must be included in any agreement, failing which the contract may be void for reasons of uncertainty. Therefore, the currency, the method of payment and the date of payment must be clearly defined. A supplier may also require some form of guarantee, for example.B. a flow of credit, or even insist on the retention of title of the products until payment has been made.
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