Distribution Agreement Requirements

17. September 2021

The reporting obligation should also be defined in the agreement. What reports exactly does the manufacturer want from distributors and how many times do they have to be submitted? Does the distributor have to establish and submit a written sales plan or will the manufacturer do so? Some state franchise laws state that if the distributor is responsible for developing the marketing plan, the franchise law does not apply – the theory is that the franchise law only applies if the manufacturer establishes the plan and requires the distributor or franchisee to follow it. From a manufacturer`s point of view, requiring the distributor to take responsibility for developing a marketing plan can therefore be a good idea, at least in these countries. The short answer is: These companies have distribution agreements with Apple. But what is a distribution contract and why should a simple written or oral agreement not be enough? If you have any questions or need help drafting or verifying the main terms of a distribution agreement, contact LegalVision`s contract lawyers at 1300 544 755 or fill out the form on this page. A distribution agreement is generally used when a supplier of goods is not present or present in a given market or country. Suppliers tend to look for distributors, as they can help with invaluable local knowledge and expertise and offer access to well-established distribution channels. A reseller can be either a simple „merchandise shifter“ or a „VAR“ (a value-added reseller) that provides additional services such as tracking and repairs for end users. In a seminar we attended, a lawyer from a very large company told an interesting story. The company had always entered into oral distribution agreements on the basis of a handshake. He decided to write an agreement to recall the exact relationship with his traders. The lawyer said that the exercise went very badly. Distributors (and even a few people in the company) interpreted the company`s desire for a written agreement as an indication of distrust; for many years, the parties had established their relationship on the feeling of mutual trust.

The company implicitly withdrew from the idea of getting a written agreement because it simply didn`t work for it. Note, however, that in this situation, the parties have already had a long history of oral cases based on a handshake. This is a different situation than where you start with a cleaner slate. Both parties will likely want a „merger clause“ or a „global agreement“ clause. These simply say that the contract is the entire agreement between the parties and that no party can then claim that the terms of the contract are different, based on interviews, correspondence, file memoranda, etc. In principle, the „global agreement“ clause is good contractual practice. . . .