A distribution agreement is an essential document that outlines the terms and conditions for the distribution of products or services by one company to another. It is a legally binding agreement that ensures that both parties are clear on their roles and responsibilities. In this article, we will provide you with a sample letter of distribution agreement and explain its key components.
Dear [distributor’s name],
This Distribution Agreement (“Agreement”) is entered into between [supplier’s name], a company incorporated under the laws of [state/country], with its principal place of business at [address], (“Supplier”) and [distributor’s name], a company incorporated under the laws of [state/country], with its principal place of business at [address], (“Distributor”).
1. Product/Service
Supplier agrees to provide the following product/service to Distributor:
[Product/Service Description]2. Territory
Distributor shall have the exclusive right to distribute the Product/Service in the following territory:
[Territory Description]3. Term
The term of this Agreement shall commence as of the Effective Date and shall continue for [Term Duration] unless earlier terminated as provided in this Agreement.
4. Pricing and Payment Terms
The price of the Product/Service shall be as set forth in Exhibit A. Distributor shall pay all invoices within [Payment Terms] days of the invoice date.
5. Delivery and Distribution
Supplier shall deliver the Product/Service to Distributor at [Delivery Terms] unless otherwise agreed upon by the parties. Distributor shall be responsible for the distribution of the Product/Service within the Territory.
6. Intellectual Property
All intellectual property rights in the Product/Service shall remain with Supplier. Distributor shall not use Supplier’s intellectual property without Supplier’s prior written consent.
7. Representations and Warranties
Supplier represents and warrants that:
a. The Product/Service will conform to the specifications set forth in Exhibit A.
b. The Product/Service will be free from defects in material and workmanship.
c. Supplier has the right to grant Distributor the rights granted under this Agreement.
d. The Product/Service does not infringe any third-party intellectual property rights.
8. Indemnification
Supplier shall indemnify, defend, and hold harmless Distributor, its officers, directors, employees, and agents from any and all claims, damages, liabilities, and expenses arising out of or in connection with the Product/Service.
9. Termination
Either party may terminate this agreement upon [Termination Notice] days written notice to the other party for any reason or for no reason at all.
10. Governing Law
This Agreement shall be governed by and construed in accordance with the laws of [Governing Law]. Any dispute arising out of or in connection with this Agreement shall be finally resolved by arbitration.
If both parties agree to the terms set forth in this Agreement, please sign below to indicate your acceptance:
_________________________ _________________________
Supplier’s Signature Distributor’s Signature
_________________________ _________________________
Supplier’s Name Distributor’s Name
_________________________ _________________________
Date Date
This sample letter of distribution agreement provides a basic framework for creating such a document. However, it is important to seek the advice of an attorney to ensure that the agreement meets all legal requirements and adequately protects your interests. By having a well-written distribution agreement in place, both parties can minimize their risks and maximize their profits.