Distributors, such as retailers or value-added resellers (VARs), purchase products from merchants who then sell them to their end customers. In the merchant-distributor relationship, the distributor acts as an intermediary between a supplier and a distributor. This relationship therefore requires a contractual agreement different from the one described above. Opt for the Home Court: In some cases, clearly defined « choice of law » provisions may affect the likelihood of litigation between the parties leading to actual litigation. In many cases, if you have a local jurisdiction clause in your agreement with a foreign distributor, your distributor will be reluctant to initiate proceedings against you. Another way to avoid proceedings is to define a costly arbitration agreement as the only and exclusive dispute resolution procedure. In this way, the party, with greater economic power, sometimes ensures a healthy and peaceful relationship. 8. Clearly identify terms of sale and price issues. Of course, this list is only a short selection of important contractual terms that you will find in an international distribution agreement. These agreements should always be tailored to the individual needs of each party.
The length of the provision is particularly important when the distribution agreement includes minimum requirements for order or an element of exclusivity. List distributed products: A distributor may be excellent for distributing a particular product, but cannot distribute other products. Therefore, it is advisable to carefully define the purpose of the agreement and to give explicit reference to issues such as updated or updated products. For example, if you refer some software to products for sale under the agreement, you might consider that recent versions of the software are covered by the distributor`s exclusive rights, and another may consider them to be outside the scope of exclusivity (and there is no doubt about who is one and who is the other). Think about territorial coverage: the territorial scope of your distribution agreement is not just a matter of geography. For example, if exclusive rights are granted for the marketing of a particular product on the east coast of the United States, it should be noted that those rights are not infringed if the same product can enter the territory through an OEM partner incorporated into another product.