Agency contracts and distribution agreements are a necessary part of the business, both in the UK and globally. A little related and often confused, it is important that business owners understand the differences between the two and how each must be performed with care to use your business. In this article, we start with the basic definitions, down to the provisions that you should include in each agreement and how EU law can come into play. Distribution agreements come in many forms and have many pieces of work, so it is important that they are established correctly from the outset in order to avoid disagreements between the parties. If you need help establishing a distribution agreement, you should use a distribution model to make sure it was properly designed. The commitment of each party in turn depends on whether the distribution agreement is an exclusive agreement or not. You should keep in mind that exclusive agreements will likely have more marketing and advertising obligations. It will also depend on the nature of the products sold and the degree of control that the supplier or wholesaler wishes to maintain over its brand and reputation in the market. Distribution agreements may be considered exclusive or non-exclusive. In addition to drafting custom agreements for customers, we provide downloadable versions of both types: like other commercial agreements, it is imperative that an international distribution contract clearly specify the responsibilities of each party. Both the supplier and the distributor must have clarity on their obligations that must be met under the terms of the transaction.
An agency contract is a contract. There is an interlude: a distribution contract is particularly useful when a prime contractor wants to sell his products in a market or territory where he is not present. Agreements are generally vertical in nature, between two companies at different levels in the same supply chain. The main advantages of using distribution agreements are that the supply of products may depend on seasonal factors and the distribution agreement may be subject to product availability forecasts. Some distribution agreements require a distributor to purchase all planned quantities of products or to be subject to orders.