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Non-exclusive distribution agreement

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This agreement template is designed for non-exclusive distribution arrangements governed by English law.

We created this template for use in relation to non-exclusive distribution deals. Under a non-exclusive distribution agreement, the supplier remains free to appoint other distributors within the relevant territory, and may itself supply the products that are the subject of the distribution agreement within that territory. In addition, the distributor may be prohibited from actively supplying the products in territories that are reserved to the supplier and its exclusive distributors.

This template is designed to be used in relation to non-exclusive distribution deals where the territory of the grant is within the UK or the wider EU.

The fundamental obligation of the distributor under this contract is to use reasonable endeavours to market, distribute and sell the products of the supplier.

The agreement includes both the general terms upon which a distributorship will be granted, and the specific terms upon which the distributor will purchase products from the supplier.

The standard variant is a shortened and simplified version of the premium variant. If you require a document with a trade mark licence, order forecasting provisions, after-sales support provisions, intellectual property indemnities, confidentiality and publicity provisions, non-solicitation provisions or formal notices clauses, you should consider the premium version instead.

See also our exclusive distributor agreement.

Standard version:

  1. Definitions and interpretation
  2. Appointment and Term
  3. Territories
  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
  17. General

Premium version:

  1. Definitions and interpretation
  2. Appointment and Term
  3. Territories
  4. General obligations
  5. Marketing
  6. Trade mark licence
  7. Reporting
  8. Forecasts, Orders and Contracts
  9. Delivery, risk and title
  10. Price and payment
  11. Interest
  12. After-sales support
  13. Warranties
  14. Intellectual Property Rights indemnity
  15. Product Liability Claims
  16. Limitations and exclusions of liability
  17. Legal compliance
  18. Data protection
  19. Confidentiality
  20. Publicity
  21. Force majeure
  22. Termination
  23. Effects of termination
  24. Non-solicitation
  25. Notices
  26. General
The standard distribution agreement is 15 pages long, while the premium distribution agreement is 24 pages long (including in each case the footnotes and the cover page). They are supplied in Word (.doc) format.

Can the non-exclusive distribution agreement be used in respect of market that is defined by sector, rather than territory?

A little adaptation is needed if you wish to define the relevant market in some way other than by territory. One advantage of territorial markets is that they can be defined with a high degree of certainty. If you wish to use sectoral distictions, take care to minimise ambiguity and vagueness.

What does the distributor have to provide to the supplier under the reporting clause?

The brief reporting clause from the standard template is quoted below:

"The Distributor will during the Term prepare and keep appropriate, accurate and up-to-date accounts and business records (including [insert details]) and within 10 Business Days following receipt of a written request from the Supplier, supply to the Supplier copies of any or all of these accounts and records."

More detailed reporting clauses are included in the premium document.

What does the legal compliance clause do?

This clause requires the distributor to comply with the laws in the territory in which it operates, and to obtain all licences, permits and approvals that are required for the operation of the distributorship. Of course, the distributor has to do these things anyway, but this clause ensures that the failure to do them constitutes a breach of contract, creating rights for the supplier against the distributor.

What after-sales support is the distributor supposed to provide under this premium variant?

The (entirely optional) support clause provides that the distributor will provide "first line" support to customers, while the supplier will provide "second line" support to the distributor. The precise content of these different levels of support will vary dramatically with the nature of the products. For this reason, very abstract definitions are used. First line support is defined as "support in relation to the use of the Products and in relation to defects in the Products"; whereas second line support is defined as "support in relation to defects in the Products only". If you use the after-sales support clause, you will probably want to add some flesh to these skeletal definitions.

What happens under the distribution contract if products are defective?

The supplier warrants to the distributor that the products will be of satisfactory quality. If they are not, then the distributor has a right to return the products for a credit of the price or replacements, plus in either case a credit of the return costs. The choice of remedy may be granted to either party. This contractual right may be specified to be subject to any other legal rights the distributor has in the circumstances.

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