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What is Distribution and Supply Agreement?
Distribution and Supply Agreement A Distribution and Supply Agreement outlines terms for the distribution and supply of goods, specifying distribution channels, pricing, delivery terms, and responsibilities of distributors.
Sample template:
Distribution and Supply Agreement
This Distribution and Supply Agreement (the "Agreement") is entered into as of [insert date] (the "Effective Date") by and between MegaTech Solutions, a [insert state] corporation, with its principal place of business located at [insert address] ("Supplier") and Nexus Distributors, a [insert state] corporation, with its principal place of business located at [insert address] ("Distributor").
1. Definitions
1.1. Products
"Products" shall mean the range of cutting-edge consumer electronics manufactured and supplied by Supplier, as specified in Exhibit A attached hereto and may be amended from time to time by mutual written agreement of the parties.
2. Appointment and Scope
2.1. Distribution Rights
Subject to the terms and conditions of this Agreement, Supplier hereby grants to Distributor an exclusive, non-transferable right to distribute and sell the Products within the defined territory of the United States (the "Territory"), using the distribution channels specified in Exhibit B attached hereto.
2.2. Intellectual Property
Supplier grants Distributor a non-exclusive, non-transferable, royalty-free license to use Supplier's trademarks, trade names, copyrights, and other intellectual property rights solely in connection with the marketing, promotion, distribution, and sale of the Products within the Territory.
3. Pricing and Payments
3.1. Pricing
Distributor agrees to purchase the Products from Supplier at the prices set forth in Exhibit C attached hereto ("Price List"). The prices are exclusive of all taxes, duties, and levies, including sales, use, value-added, and other taxes. Supplier may update the Price List from time to time upon written notice to Distributor.
3.2. Payment Terms
Distributor shall pay Supplier for the Products within 30 days from the date of Supplier's invoice. Payment shall be made in US dollars by wire transfer to a bank account designated by Supplier, or by such other method as may be mutually agreed upon by the parties in writing.
4. Delivery and Risk of Loss
4.1. Delivery
Supplier shall deliver the Products to Distributor DDP (Delivered Duty Paid) (Incoterms 2020) at Distributor's designated facility in the Territory. Supplier shall make every commercially reasonable effort to meet the delivery dates requested by Distributor.
4.2. Risk of Loss
Risk of loss or damage to the Products shall pass from Supplier to Distributor upon delivery of the Products at Distributor's designated facility in the Territory, in accordance with clause 4.1 herein.
5. Warranty and Returns
5.1. Warranty
Supplier warrants that, for a period of one (1) year from the date of delivery, the Products shall be free from defects in materials and workmanship and shall conform in all material respects to the specifications set forth in Exhibit A. This warranty is limited and shall not apply to any failure of the Products due to misuse, negligence, or unauthorized repair or alteration.
5.2. Returns
If any Product fails to conform to the warranty set forth in clause 5.1 herein, Distributor shall {obtain a return merchandise authorization (RMA) number from Supplier and} return the defective Product to Supplier at Supplier's expense. Supplier shall, at its option and as Distributor's sole remedy, either repair or replace the defective Product.
6. Distributor's Responsibilities
6.1. Sale and Promotion of Products
Distributor shall use commercially reasonable efforts to promote and sell the Products within the Territory, including maintaining an adequate staff of trained sales and support personnel, participating in trade shows and industry events, and conducting regular marketing and promotional activities in support of the Products.
6.2. Compliance with Laws
Distributor shall at all times comply with all applicable federal, state, and local laws and regulations, including the United States Foreign Corrupt Practices Act, in its performance under this Agreement, and shall obtain all necessary permits and licenses required to distribute and sell the Products within the Territory.
7. Term and Termination
7.1. Term
This Agreement shall commence on the Effective Date and continue for an initial term of two (2) years, unless earlier terminated in accordance with this clause 7. This Agreement shall automatically renew for successive two (2) year periods unless either party provides written notice of its intent not to renew at least ninety (90) days before the expiration of the then-current term.
7.2. Termination
Either party may terminate this Agreement upon written notice to the other party if the other party materially breaches this Agreement and fails to cure such breach within thirty (30) days after receipt of written notice thereof.
8. Governing Law and Dispute Resolution
8.1. Governing Law
This Agreement shall be governed by and construed under the laws of the State of [insert state], without regard to its conflict of laws principles.
8.2. Dispute Resolution
Any dispute, claim, or controversy arising out of or relating to this Agreement, or the breach, termination, enforcement, interpretation, or validity thereof, shall be determined by arbitration in [insert city, state], under the Rules of Arbitration of the American Arbitration Association. The award rendered by the arbitrator shall be final and binding on both parties, and judgment upon the award may be entered in any court of competent jurisdiction.
9. Miscellaneous
9.1. Entire Agreement
This Agreement, together with any exhibits attached hereto, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes any prior or contemporaneous proposals, communications, negotiations, or agreements, whether oral or written.
9.2. Amendments
No amendment, modification, or waiver of any provision of this Agreement shall be effective unless in writing and signed by the parties hereto.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the Effective Date.
MegaTech Solutions: Nexus Distributors:
_____________________________ _____________________________
[insert authorized signer's name] [insert authorized signer's name]
Title: _________________________ Title: _________________________
Date: _________________________ Date: _________________________
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Main Sections of a Distribution and Supply Agreement
In this Distribution and Supply Agreement, you will see the following sections:
- Definitions
- Appointment and Scope
- Pricing and Payments
- Delivery and Risk of Loss
- Warranty and Returns
- Distributor's Responsibilities
- Term and Termination
- Governing Law and Dispute Resolution
- Miscellaneous
About each Section - Analysis and Summary:
- Definitions : This section explains the meaning of key terms used throughout the agreement, such as "Products," which refers to the specific items the Supplier provides and the Distributor sells.
- Appointment and Scope : This section outlines the Distributor's rights and responsibilities, including the exclusive right to distribute and sell the Products within a specific territory. It also grants the Distributor permission to use the Supplier's intellectual property for marketing and promotion purposes.
- Pricing and Payments : This section details the agreed-upon prices for the Products and the payment terms between the Supplier and Distributor. It also explains that the Supplier may update the prices from time to time with written notice.
- Delivery and Risk of Loss : This section explains how the Products will be delivered to the Distributor and when the risk of loss or damage transfers from the Supplier to the Distributor. In this case, the risk transfers upon delivery at the Distributor's designated facility.
- Warranty and Returns : This section outlines the warranty provided by the Supplier for the Products and the process for returning defective items. The warranty covers defects in materials and workmanship for one year from the date of delivery.
- Distributor's Responsibilities : This section describes the Distributor's obligations, such as promoting and selling the Products, complying with laws and regulations, and obtaining necessary permits and licenses.
- Term and Termination : This section specifies the duration of the agreement and the conditions under which it can be terminated. The initial term is two years, with automatic renewals for additional two-year periods unless either party provides written notice of non-renewal.
- Governing Law and Dispute Resolution : This section establishes the governing law for the agreement and the process for resolving disputes, which in this case is arbitration under the Rules of Arbitration of the American Arbitration Association.
- Miscellaneous : This section covers various additional provisions, such as the agreement being the entire understanding between the parties, the requirement for amendments to be in writing, and the execution of the agreement by authorized signers.
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