Distribution Agreement
(Pro-Distributor)

Summary

This distribution agreement can be used when a manufacturer or supplier appoints a distributor to resell certain products in a designated market. This template includes practical guidance, drafting notes, and alternate clauses. This template has been drafted with terms that favor the distributor. A distribution agreement will establish the terms and conditions under which a party (the distributor) will promote and resell the goods of another party (the manufacturer or supplier). The distributor is an independent entity that will control its business operations, and usually makes its profit from the resale of the manufacturer's goods to third parties. A distributor differs from a sales agent or a consignee in that the distributor acquires both possession of and title to the goods, while a consignee takes only possession but not title, and a sales agent has neither possession nor title. As a distribution arrangement will often be a critical part of both parties' businesses, it is essential for the agreement to fully memorialize the parties' respective rights and obligations, as the failure to do so can have significant adverse consequences for one or both parties and result in costly litigation. For additional guidance and materials, see Drafting and Negotiating a Distribution Agreement, Distribution Agreements, Distribution Agreement Drafting and Negotiation Checklist, and Distributor Resource Kit. For short form distribution agreements with terms favoring the distributor, see Distribution Agreement (Pro-distributor, Short-form) and Exclusive Distribution Agreement (Pro-distributor, Short-form). For a full listing of related supply of goods content, see Supply of Goods Resource Kit.