Distribution AgreementA Distribution Agreement is a contract that sets out the terms and conditions of the distribution arrangement between a manufacturer or supplier of a product and an Australian or overseas distributor that wants to purchase the supplier’s goods to sell.
This is a useful tool that identifies each party’s rights and obligations under the agreement with the option of giving exclusive or non-exclusive rights to the distributor.
Since the agreement may involve dealings with international markets, the document should be customised to incorporate the requirements of each party with the awareness that there is no uniform regulations or law around the world.
This document should only be used for the appointment of a distributor, as it excludes the creation of agency or partnership relationships. Therefore, it is important to be aware of the difference between distribution and agency.
Difference between distribution and agency
Agency involves a person called ‘agent’, who usually acts as a representative of the supplied goods. Agents do not take ownership of your goods and are generally paid a commission based on the sales generated. Therefore, the supplier as the principal has more control over the way the agents operate, for example settling on the sale price.
Distribution, on the other hand, involves a ‘distributor’, who buys the products and resells them in their own right for their own profit.
Use this Distribution Agreement document if:
You are a manufacturer or supplier that wants to export products by way of distributorship appointment
You are a manufacturer or supplier that wants to develop a distribution network.
You are a distributor who wants to purchase overseas product to sell in your country
What does this Distribution Agreement document cover?
Grant exclusive rights
Placing of orders: prices
Passing of property and tie for payment
Place of and currency for payment
Duties of distributors
Duties of company
Rights of company
Return of company property and disposal of stocks
Cancellation of agreement
Non-disclosure of company affairs
Employment of agents
Liability for acts of distributors
Acts of associates
No partnership or agency created
Application of law
Cancellations of previous agreements
Service of notices