Product Distribution / Dealer Agreement
About:
A manufacturer of a goods and products often enters into an agreement with a local business to become a distributor or dealer to distribute and sell their product in the local market. If you are a distributor and are thinking of becoming a distributor or dealer of a product from a manufacturer, you should enter into a distribution agreement. A distribution agreement will deal with several legal
issues such as the following:
- the name of the manufacturer and the distributor
- the territory covered - will the territory be defined by geography such as a city or province, or by media such as retail, or online)
- exclusivity rights – does the distributor have exclusive rights or will other distributors be allowed in the same territory
- what is the time period (term) of the distribution rights – is there an initial period, and is there automatic renewal/extension of the term
- what products are covered by the distribution
- how will the products be supplied by the manufacturer
- what are the prices and payment terms
- what marketing will be involved (will the distributor be required to do its own advertising and marketing? Or will the manufacturer provide materials?)
- confidentiality of methods of doing business
- non-competition – will the distributor be allowed to distribute products from competitiors?
- who will deal with warranty claims from customers?
- other issues of concern between the parties to the agreement
