Distribution Agreements
Trading
Distribution Agreements
A distribution agreement is a legally binding contract governing the sale and distribution of the products of one party by another, e.g. a wholesaler and retailer, by allowing parties to trade with each other on a day to day basis on identical terms. These agreements are equally suitable for small or large organisations or businesses because they provide a convenient method of trading at minimum expense.
Distribution agreements are used for a variety of goods and services which are to be sold or distributed on a frequent basis on the same terms. Most commonly drafted by the supplier, they allow the supplier to state the precise terms and conditions for trading with distributors. They also allow a supplier to trade with a number of distributors in a variety of territories on the same terms and conditions.
In order to avoid legal disputes, careful consideration should be given to the terms and conditions of distribution agreements. Common terms included within an agreement are:
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the price at which the supplier will supply goods to the distributor
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when risk and title passes from the supplier to the distributor
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whether the supplier will trade with the distributor on an excusive basis or non-exclusive basis
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the appointment of sub-distributors by the distributor
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the territory in which the distributor may supply the goods or services
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confidentiality clauses
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warranties, liabilities, indemnities and exclusions of liability
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insurance
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shipping provisions
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the length of the contract and
In order to avoid a distribution agreement being held to be unenforceable or unlawful Borneos can offer specialist advice on terms that should not be included. It is important to avoid contravening important areas of European competition law e.g. price control and monopoly of markets.
As well as governing the terms on which the parties will trade with each other, distribution agreements can cover what happens when the contract ends thereby avoiding unexpected pitfalls for either party.
If you would like to discuss how we might help you, please:
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call any of our office numbers listed at the bottom of this page;
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contact one of our specialists direct by clicking on their name below; or
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complete our enquiry form
Members of our team specialising in this area:
