Exclusive Distribution Agreement

In an exclusive distribution agreement, the supplier appoints the distributor as its only distributor in a particular marketplace. The supplier agrees not to distribute the products in the market or appoint any third party to distribute the products in the market.

The supplier will usually want something in exchange for the grant of exclusivity. The quid pro quo may take the form of a minimum purchasing commitments or other performance-related obligations.

Exclusive distribution agreements are sometimes called "sole distribution agreements". However, this can be misleading: a grant of sole distribution rights is sometimes taken to mean that the supplier retains the right to distribute the products in the territory, albeit forfeiting the right to appoint any third parties to do so.

Note: exclusivity provisions may be subject to competition law and restraints of trade laws in many jurisdictions. You will need to ensure that the exclusivity provisions you include are not illegal or unenforceable under any applicable laws.

A full listing of the section headings in this template is as follows: (1) Definitions and interpretation, (2) Appointment and Term, (3) Exclusivity, (4) General obligations, (5) Marketing, (6) Reporting, (7) Orders and Contracts, (8) Delivery, risk and title, (9) Price and payment, (10) Interest, (11) Warranties, (12) Product Liability Claims, (13) Limitations and exclusions of liability, (14) Legal compliance, (15) Termination, (16) Effects of termination and (17) General.

This precedent is 14 pages long, is in MS Word format, and will be automatically emailed to you following receipt of your card payment.

How does the template deal with the transfer of ownership of the products? Does it use the Incoterms definitions?

The distribution agreement template incorporates two different sets of short-form provisions covering the transfer of title (and risk) in the products. One of these sets of provisions is similar, but not identical, to the EX WORKS terms under Incoterms 2000. The other is specifies that the supplier is responsible for shipping. Alternatively, you can incorporate your standard delivery T&Cs into the agreement.

Does the template include a product liability indemnity?

Yes. Clause 13 includes an optional indemnity protecting the distributor in the case of a product liability claim. The indemnity may be made subject to the distributor's co-operation in relation to any claim.

Could this precedent be used for the distribution of software?

This document is designed for product distribution. Insofar as the software being distributed constitutes a product under applicable law, then this template would represent a reasonable starting point. For instance, it might be appropriate in relation to the distribution of packaged software. However, it does not include licensing terms (you will also need a EULA) and is unlikely to be a good starting point where the software distribution constitutes the supply of a service.

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