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Exclusive distribution agreement (premium)

In an exclusive distributorship, a supplier of goods grants to a distributor the right to distribute goods in a defined marketplace on an exclusive basis. In other words, the supplier agrees not to distribute the goods in that marketplace, and agrees not to appoint any third party to distribute the goods in that marketplace.

There are different ways to define the exclusivity. Most commonly, exclusivity will relate to the distribution of particular goods during a particular period (often, the contract term) within a particular geographical area. Alternatively, exclusivity may relate to defined market channels.

In exchange for granting exclusivity, a supplier will usually expect some form of performance guarantee from the distributor. If the distributor does not meet performance targets, the supplier may wish to terminate the exclusivity and/or the distribution agreement.

In addition to the core provisions relating to the distributorship and general boilerplate provisions, this agreement also covers marketing obligations, trade mark licensing issues, reporting, forecasts, terms of supply and after-sales support.

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Exclusive distribution agreement (premium) contents

  1. Definitions: definitions.
  2. Term: commencement of term; end of term.
  3. Exclusive distributorship: appointment of exclusive distributor; distribution restrictions on 
    the Supplier
    ; distribution restrictions on 
    the Distributor
    ; product non-compete obligations.
  4. Distributor
    obligations:
    distribution obligations;
    Distributor
     not agent etc; general second party obligations; second party responsible for third party co-operation;
    Distributor
     must not give product warranties etc;
    Distributor
     must comply with laws etc; protection of first party reputation and goodwill.
  5. Supplier
     obligations:
    marketing support; protection of second party reputation and goodwill.
  6. Order procedure: pre-order negotiations for the supply of products; order procedure for products; products supply subject to terms and conditions.
  7. Minimum Quantity: product minimum order quantity; failure to purchase minimum quantity of products.
  8. Forecasting: delivery of product order forecasts; content of product order forecasts; product order forecasts not binding; obligation to purchase and supply forecasted products; forecasts and minimum quantities not cumulative.
  9. After-sales support: Obligation to provide first line support; obligation to provide second line support.
  10. No assignment of Intellectual Property Rights: no assignments of intellectual property rights.
  11. Licence of
    Supplier
    Trade Marks
    :
    licence to use trade marks; sub-licensing of rights to use trade marks; trade mark style guide; standard of use of trade marks; use of trade mark symbols; prohibition on actions liable to damage trade marks; restrictions relating to similar trade marks; goodwill in trade marks; trade marks further assurance; exceptions to territorial restrictions in trade mark licence; specific request to cease use of trade marks; right to make reasonable demands in relation to use of trade marks; identify trade mark licensor on each public use; no assignment of trade marks; no implied rights to trade marks; trade marks upon termination.
  12. Change control: application of section to change requests; request changes at any time; change control notice to be in designated form; actions upon receipt of a change control notice; changes only take effect upon agreement of CCN.
  13. Charges: obligation to pay charges; amounts inclusive or exclusive of VAT; variation of charges; increases in charges for products.
  14. Payments: issue of invoices for products; time for payment of charges following invoice; payment methods; interest on late payments.
  15. Confidentiality obligations: first party confidentiality undertaking; second party confidentiality undertaking; disclosure of confidential information to certain persons; exceptions to confidentiality obligations; disclosures of confidential information mandated by law etc; parties to stop using confidential information upon termination; parties to return or destroy confidential information following termination; confidentiality obligations after termination.
  16. Publicity: limited public disclosures; limited public disclosures by first party; limited public disclosures by second party; confidentiality obligations overriding.
  17. Warranties: first party warranty of authority; second party warranty of authority; exclusion of implied warranties and representations.
  18. Distributor
     indemnity:
    second party indemnifies first party upon breach.
  19. Supplier
    Indemnity:
    first party indemnifies second party (products); conditions upon first party indemnity; limitations of liability vs indemnities.
  20. Limitations and exclusions of liability: caveats to limits of liability; interpretation of limits of liability; no liability for force majeure; no liability for loss of profits; no liability for loss of revenue; no liability for loss of use; no liability for loss of opportunities; no liability for loss of data or software; no liability for consequential loss; child contract liability cap; aggregate liability cap upon services contract.
  21. Force Majeure Event: obligations suspended for force majeure; force majeure notification and information; mitigation of effects of force majeure.
  22. Termination: termination without cause (optionally assymetric); termination by either party without cause; termination upon breach; termination upon insolvency.
  23. Effects of termination: surviving provisions upon termination; termination does not affect accrued rights.
  24. Notices: contractual notices must be in writing; methods of sending contractual notices to first party; methods of sending contractual notices to second party; contact details for contractual notices; substitute contact details for notices; acknowledgement of notice by email; deemed receipt of contractual notices.
  25. Assignment: assignment by first party; assignment by second party.
  26. No waivers: no unwritten waivers of breach; no continuing waiver.
  27. Severability: severability of whole; severability of parts.
  28. Third party rights: third party rights: benefit; third party rights: exercise of rights.
  29. Variation: variation in writing and signed, subject to change control.
  30. Entire agreement: entire agreement: documents; no mispresentation; section subject to caveats to limits of liablity.
  31. Law and jurisdiction: governing law; jurisdiction.
  32. Interpretation: statutory references; section headings not affecting interpretation; calendar month meaning; no ejusdem generis.

SCHEDULE 1 (DISTRIBUTION PARTICULARS)

  1. Specification of Products: specification of products prompt.
  2. Financial provisions: financial provisions prompt.

SCHEDULE 2 (TERMS AND CONDITIONS OF SUPPLY)

    Preamble to terms and conditions (products) .
  1. Supply: products to be collected; products to be delivered; product supply by instalments; are product supply dates of the essence?; postponement of product supply.
  2. Title: passage of title to products; products held by bailee; obligations during title retention; recovery of products where title retained; action for charges notwithstanding title retention.
  3. Warranties: first party product warranties; exclusion of implied warranties and representations.
  4. Breach of warranty: customer rights on breach of product warranty; procedure for returning products on breach of warranty.

SCHEDULE 3 (FORM OF CCN)

  1. Introduction: title of change; change control notice number; change proposor; date of change control notice; summary of proposed change.
  2. Change details: insert details of change.
  3. Impact of Change: impact upon resources; impact upon timetable; impact upon charges; other effects of proposed change.
  4. Agreement to Change: acceptance of change by signature; form of signature block for first party; form of signature block for second party.
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