Need a Distribution Agreement drawn up?

A distribution agreement is a legally binding contract, typically between a distributor and a supplier or manufacturer of goods, that outlines how a party will purchase, advertise and sell good from another party.

They are also sometimes referred to as ‘wholesale distribution agreements’. They are “vertical contracts”, meaning they bring together two businesses that operate at different levels/stages of the same supply chain.

Distribution agreements typically include:

• Duration of the contract
• The products in questions and the associated cost
• Relevant duties and responsibilities of each party
• Minimum order quantities / sale values
• Whether or not the agreement is exclusive
• Relevant territories. ie. where the distributor has the right to sell.
• Confidentiality clauses (if applicable)
• Intellectual property agreements
• Termination clauses and consequences

A distribution contract outlines and governs the terms of the relationship between a distributor and supplier. That’s why it’s so important to get expert support when you’re drafting or negotiating your business’ distribution agreement.

There are three key types of Distribution Agreements.

Exclusive Distribution Agreements
Under an exclusive distribution contract, the distributor receive exclusive rights to distribute the supplier’s goods either in specified territories (areas) or to a defined customer group.

Sole Distribution Agreements 
A sole distribution agreement is similar to an exclusive distribution agreement. The difference is that the supplier retains the right to sell their own goods or services directly to the customers in the same territory as their distributor.

Non-Exclusive Distribution Agreements
A non-exclusive distribution agreement is where a distributor gains the right to distribute the supplier’s goods, but they won’t have exclusivity to do so. The supplier is free to enter into a distribution agreement with a different party, or sell into the market themselves.

If one of the parties breaches the agreement they can open themselves up to legal action.

If you are in this situation, it is a good idea to seek professional legal advice.

Our team can support in this instance, call us on 0203 007 5500

It may be tempting to use a template you’ve found online. However, it’s key to remember that not every Distribution Agreement is identical.

Your Distribution Agreement should be carefully drafted to reflect your specific needs, industry, market, and the nature of the relationship you are seeking to establish. Without expert guidance, you risk exposing yourself to legal liability.

Our dedicated corporate commercial solicitors offer substantial experience in drafting and negotiating international Distribution Agreements.

If you need a Distribution Agreement drafted or reviewed by a solicitor, we can help. Just give us a call on 0203 007 5500.