Difference Between Reseller And Distributor Agreement

A supplier will have the opportunity to increase its prices, but this will probably be refused by the reseller. As a general rule, a minimum termination period for a price increase is the best thing the trader can get. However, suppliers should carefully consider the impact this may have on the distributor`s motivation. If the loss of exclusivity is correct, the agreement must be reviewed to ensure that it continues to follow competition law. How to prevent a distributor from selling products that rival yours, will you name the distributor on an exclusive or non-exclusive basis – is he the only person authorized to sell your products in this area? Even if you agree to an exclusive agreement, you should reserve some existing customers for direct use, in which case you refer to it in the agreement. You should also consult local legal advice before signing a sales contract, because there may be local laws that you need to consider – for example, it may be necessary for a sales company to be owned by nationals of the country. One provision that can also be considered is a force majeure clause that provides for what happens when a force majeure event occurs, an event that no one could have foreseen. Given the COVID 19 pandemic, both suppliers and distributors should consider ensuring that they contain a well-developed force majeure clause in the agreement. The products that must be covered by the agreement must be clearly defined.

This can be done in different ways, for example. B by description, identification number, brand number, etc., and depends on the nature of the product in question. The supplier will probably want flexibility to modify the product either because of innovation or because it pulls a product out of the market. But the distributor will want to ensure that all the exclusivity rights it holds for new products will be maintained. Suppliers should be careful in the event of price restrictions. Most of them will be anti-competitive, although it is permissible to set a maximum resale price for the distributor`s current sales to its customers. If the agreement is a reseller agreement in the commercial context, the supplier (distributor) must ensure that the conditions are in accordance with the terms set out in its distribution agreement with the supplier or manufacturer above in the chain. For example, if the manufacturer is able to increase the price of the product, the distributor also needs the flexibility to do so in the reseller agreement.

As a result, a reseller may find that he or she does not have the power to negotiate the terms of the agreement.