Exclusive Dealer Agreements

As a general rule, a distributor agreement defines the conditions of sale of the products purchased by the distributor, the obligations and liabilities expected of the distributor and the circumstances in which the contract can be terminated. A negotiation contract also makes it possible to fix the means of payment, the date of delivery and the extent of the merchant`s territorial rights. Parties inexperienced by distribution agreements sometimes try to minimize the possibility of termination. The requirement for annual notice and a semi-automatic extension is a routine procedure for experienced players. In such cases, the agreement shall provide for the termination of the agreement at the end of the first full calendar year following the entry into force of the agreement and each subsequent year. The terms and conditions allow each party to submit a notice of intent to non-renewal 30 days before the end of the calendar year. The distributor may not sell/license the supplier`s products through third parties (e.g. B OEMs, distributors, value-added resellers or other distributors or representatives) without the supplier`s prior written consent to the proposed relationship (including the specific terms of that relationship). An exclusive distribution contract or an exclusive agent contract is a restrictive contract between a contracting authority and a representative which binds them for a specified period in an association under which neither party may conclude similar transactions with competitors of the parties of the other. It can be a good, a service, a market or a territory.

As far as marketing is concerned, this means an agreement that binds a retailer or wholesaler to a supplier and the participation of another distributor or supplier in a given area is prohibited. For example, exclusive trading takes place due to vertical integration when the supplier has points of sale. Like other commercial agreements, it is essential that an international distribution agreement clearly identifies the responsibilities of each party. The supplier and distributor must be clear about their obligations, which must be fulfilled in accordance with the conditions of the transaction. The types of distribution agreements are as follows: distribution agreements are an integral tool for establishing a relationship between a distributor and a supplier. A well-written agreement can help develop this relationship. The agreement cannot extend the duration of a relationship as soon as the relationship expires. A poorly written agreement often leads to litigation which, in turn, consumes management time, financial resources and the involvement of lawyers, courts and arbitration tribunals. A well-written agreement can eliminate the cost of resources from these unproductive activities and encourage the distributor and manufacturer to continue their respective activities at the end of the relationship. Distributors, such as retailers or value-added resellers (VARs), buy goods from distributors who then sell them to their end customers. In the distributor-dealer relationship, the distributor acts as an intermediary between a supplier and a distributor.

This report presupposes in this respect a contractual agreement different from that described above. . . .