Distribution Agreement (with Sub-Distribution Rights)

A wholesale distribution agreement, also known as a distributor agreement or purchase and resell agreement, is a legal contract between a company and a distributor that outlines the terms of the distribution of wholesale products. This agreement often includes territory restrictions and upfront payment for the distributor. The purpose of this agreement is to appoint the distributor as an exclusive or non-exclusive distributor of the company's products within a specified geographical area or territory.

The distribution agreement specifies the terms and conditions of the partnership, such as the distributor's profit margin, the minimum purchase requirements, and the marketing and sales plan. The agreement also sets out the distributor's rights and obligations regarding the sale of the products, including the sub-distributor engagement.

The wholesale distribution agreement may also include clauses regarding the use of intellectual property such as trademarks and the materials provided by the company. The agreement typically requires the distributor to comply with all the terms and conditions set forth in the agreement, including restrictions on the distribution and use of the products.

The distributor is given the right to distribute the products within the specified territory and may sell directly to end-users or indirectly through sub-distributorship agreements. However, the sub-distributorship agreements must include an acknowledgment of the terms of the distribution agreement and receive the prior written approval of the company.

The term of the distribution agreement is often for a specified period, during which the distributor must meet the minimum purchase and minimum sales figures as specified in the agreement. The company may terminate the agreement if the distributor fails to comply with the terms and conditions set forth in the agreement, while the distributor may terminate the agreement with a notice period.

In summary, a wholesale distribution agreement is a legal contract that outlines the terms of the distribution of wholesale products. This agreement includes territory restrictions, sub-distributor engagement, upfront payment, profit margin, and other wholesale distribution terms. It is important for companies and distributors to understand the terms and conditions set forth in the agreement to ensure a successful partnership.

How to use this Document? 

To use this document, please follow these steps:

1. Begin by familiarising yourself with the parties involved in this agreement. Party 1, the Company, is based at the address specified in the agreement, while Party 2, the Distributor, is based at the address specified in the agreement.

2. Note the context of this agreement, which involves the Company's desire to extend the area of sales to the specified Territory and the Distributor's willingness to distribute the Company's products listed in Schedule 1.

3. The agreement appoints the Distributor as the exclusive distributor of the Company's products for certain applications in the Territory. The appointment is subject to the terms and conditions outlined in the agreement.

4. It's important to note that the Distributor also distributes other products, but these do not compete with the Company's products.

5. The agreement includes definitions of terms used throughout the document, including Business Day, Business Plan, Distribution Rights, Intellectual Property, Materials, Products, Sub-Distributors, Sub-Distributorship Agreement, Territory, Trademarks, and Force Majeure.

6. The appointment of the Distributor is for an initial term and the Distributor has the exclusive right to distribute the Products under the Trademarks within the Territory.

7. The Company reserves the right to distribute, sell, or install the Products in the Territory either directly or by appointing third parties to do so on a non-exclusive basis.

8. The Distributor may sell the Products directly to end-users or indirectly through Sub-Distributors by entering into Sub-Distributorship Agreements within the Territory.

9. Sub-Distributorship Agreements must comply with all terms and conditions of the agreement, and each agreement must include an acknowledgement of the terms contained in this agreement.

10. Each specific Sub-Distributorship Agreement will require prior written approval from the Company, both for the terms and conditions of the agreement and the Sub-Distributor.

11. If you're communicating with the parties involved in this agreement, keep in mind that any reference to 'writing' or cognate expressions includes e-mail, facsimile transmission, or comparable means of communication.

12. Any reference in this agreement to an enactment shall be construed as a reference to that enactment as amended, re-enacted, or extended at the relevant time.

13. The headings in this agreement are for convenience only and shall not affect its interpretation.