A key points distribution agreement is a legal document that outlines the terms and conditions of how a company`s products or services are distributed to its customers. It is an essential contract between two parties, namely the manufacturer or supplier and the distributor. The agreement helps to ensure that both parties understand their roles and responsibilities and work towards a common goal.
Here are some key points that should be covered in a distribution agreement:
1. Exclusive vs. Non-exclusive distribution: The agreement should clarify if the distribution is exclusive or non-exclusive. An exclusive agreement means that the distributor is the only one authorized to distribute the products or services in a specific territory or market. A non-exclusive agreement means that the manufacturer or supplier can appoint other distributors in addition to the existing one.
2. Territory: The agreement should state the geographic area where the distributor can sell and distribute the products or services. It should also specify if the distributor has the right to sell outside the territory, and if there are any restrictions or limitations.
3. Distribution rights and obligations: The agreement should establish the distributor`s rights and obligations, such as the right to use the manufacturer`s trademarks and logos, and the obligation to meet certain sales targets.
4. Pricing and payment terms: The agreement should specify the pricing and payment terms, such as the cost of goods, payment method, and payment schedule. It should also outline the consequences of late payment or non-payment.
5. Marketing and promotion: The agreement should outline the marketing and promotional activities that the distributor is required to undertake, such as advertising, sales promotion, and public relations.
6. Intellectual property: The agreement should address any intellectual property rights, such as patents, copyrights, and trademarks, and specify the rights and limitations of the distributor in using them.
7. Termination: The agreement should outline the circumstances under which the agreement can be terminated and the process to be followed in such a situation.
In conclusion, a key points distribution agreement is a crucial document that outlines the relationship between a manufacturer or supplier and a distributor. It is important to ensure that the agreement includes all the necessary key points to avoid any misunderstandings or disputes in the future. By clearly defining the roles and responsibilities of both parties, the distribution agreement can help to build a mutually beneficial relationship.