What Is Sole Distributor Agreement

Most exclusive distribution agreements are for small businesses that sell high-quality luxury items such as cars or jewelry. Some agreements concern specific technological applications, e.B, industrial software packages. For example, a reseller might sign an exclusive distribution agreement with a software developer to distribute their geographic information system packages. These resellers can turn to private companies such as oil and gas exploration companies and government agencies such as planning offices as exclusive distributors of the GIS software. Distributor is an independent contractor and not an employee, agent, partner, partner or joint venture with or from Supplier. Neither Licensee nor Supplier has the right to enter into contracts or obligations in the name or on behalf of the other or to bind the other in any way, except as permitted by this Agreement. They also often work with many different companies, some of which could be direct competitors, prioritizing their efforts based on the most lucrative products. One of the most important factors to consider is that working with an intermediary is another unit between the manufacturer and the customer, which can affect customer feedback, service, and communication. A clearly written exclusive distribution agreement allows both parties to terminate the contract with reasonable notice – for example, 60 or 90 days – or for clearly defined special circumstances.

These provisions recognize that the objectives of a business on the first day may differ significantly from those on the first day of the seventh year. Post-termination clauses that determine how the relationship should end lay the groundwork for reinstatement in the future. Well-written non-compete obligations and confidentiality provisions have a similar purpose. .