|Distribution agreements are vital contracts for the widespread marketing of goods and services. In such agreements a supplier appoints a third party, the distributor, to market and perhaps also support the supplier's goods or services, sometimes in a specific area, the territory, in which the distributor has already established itself and has an existing customer base.
Therefore, in drafting such an agreement, the following points must be considered in ascertaining the nature and scope of the distributor's appointment.
These questions are considered and answered in the Explanatory Note to this contract.
- Should the appointment be exclusive or non exclusive?
- Should the appointment have territorial restrictions?
- Should the appointment include a right to support the product?
- If the supplier of the product is also supplying software, will the distributor be granted the right to license, sub license or merely to act as an "agent" on the supplier's behalf?
- Should the supplier grant the distributor the right to appoint dealers or sub distributors?