distribution agreement

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Distribution Agreement (Drafting)

A distribution agreement or distributor, is a contract between a supplying entity with products to sell and another entity that markets and sells the products. The distributor agrees to buy products from the supplier company and sell them to customers within their geographical areas. A basic distribution agreement should contain certain information and unambiguous word to make it legally binding.

Distribution agreement give a distributor the right and duty to sell and market the supplier's products. It's beneficial for both the parties i.e. supplier and the distributor. The distributor gets a fee or a commission in return the distributor markets the product of supplier. These agreements are also known as product distribution agreements and distribution rights agreements.

Features of distribution agreement:

A basic distribution agreement should contain certain information and unambiguous word to make it legally binding. Such information includes the following:

1.INTRODUCTION: In the introduction, identifying the parties and stating that the agreement is for resale of the supplier company's product

2.TERRITORY: Describing the territory where the distributor is allowed to sell

3.EXCLUSIVITY: Whether the contract is an exclusive agreement or distributor is only one of the multiple distributors of a particular the region

4.TERMINATION: Termination of the agreement for cause or simply if the parties choose not to continue their business relationship

5.DATE: Specifying the product and its delivery dates

6.CONSIDERATION: Specifying whether there is any type of fee arrangement or payment is commission-based

7.RELATION: Describing the relationship between the parties, such as the distributor being an independent contractor and not an employee of the supplier

8.TIMELINESS: A statement that the supplier must accept the distributor's orders in a timely manner

Documents

Passport Photo

Passport photo of all parties.

PAN Card

PAN card of all parties.

Aadhar Card

Aadhar card of all parties.

Utility Bill

Utility bill of Electricity or Telephone.

Address Proof

Valid Address Proof of all the parties.

Licence

Valid Driving Licence of all the parties.

Terms and Conditions

Terms and Conditions between the parties.

FAQ

A distribution agreement, also known as a distributor agreement, is a contract between a supplying company with products to sell and another company that markets and sells the products. The distributor agrees to buy products from the supplier company and sell them to clients within certain geographical areas.

Typical elements of a distributor agreement • terms and conditions of sale; • term for which the contract is in effect; • marketing rights; • trademark licensing; • geographical territory covered by the agreement; • performance; • reporting; and. • circumstances under which the contract may be terminated.

An exclusive distribution contract means only one distributor is appointed in a specific marketplace by a supplier. The supplier promises not to allow the distribution of the products by any other party in the given market area.

There are three methods of distribution that encapsulate how manufacturers choose how they want their goods to be dispersed in the market. • Intensive Distribution • Selective Distribution • Exclusive Distribution

A dealer connects distributors with potential customers while a distributor creates the link between the dealer and the manufacturer. However, a distributor simply purchases products from the manufacturers and sells them to dealers or retailers.