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What is Product Distribution Agreement?

Product Distribution Agreement Specifies the distribution of products, including territories, pricing, marketing support, and delivery terms.



Sample template:



Product Distribution Agreement


Between StellarTech Electronics Inc and Horizon Distribution Group LLC


1. Purpose and Scope

This Product Distribution Agreement (the "Agreement") sets forth the terms and conditions between StellarTech Electronics Inc, a [State] corporation, located at [Address] ("Manufacturer") and Horizon Distribution Group LLC, a [State] limited liability company, located at [Address] ("Distributor"). The purpose of this Agreement is to establish the terms and conditions under which Distributor shall distribute, promote, and market electronic devices under the NovaGadgets Series, including, but not limited to, smartphones, tablets, and smartwatches, manufactured by Manufacturer (the "Products").



2. Appointment and Distribution Territory

2.1. Appointment


Manufacturer hereby appoints Distributor as its non-exclusive distributor of the Products within the distribution territories defined herein. Distributor shall use its commercially reasonable efforts to distribute, promote, and market the Products in accordance with the terms and conditions of this Agreement.



2.2. Distribution Territory


The distribution territory shall be the United States of America and its territories (the "Territory").



3. Distributor's Responsibilities

3.1. Marketing Support


Distributor shall actively and professionally promote, market, and advertise the Products within the Territory. Distributor shall use its best efforts to maximize the sales of the Products. This shall involve, but is not limited to, making presentations, giving product demonstrations, participating in trade shows, and providing training and technical support to dealers and customers within the Territory.



3.2. Sales Efforts


Distributor shall maintain a sales force with adequate knowledge, skill, and experience to effectively sell and support the Products within the Territory. Distributor shall provide Manufacturer with periodic reports detailing its sales efforts, the number of Products sold, and other relevant sales information as reasonably requested by Manufacturer from time to time.



4. Pricing and Payment Terms

4.1. Prices


Manufacturer shall provide Distributor with the prices of the Products, as well as any discounts, rebates, or other incentives available to Distributor (collectively, the "Prices"). The Prices are subject to change upon [30] days' prior written notice from Manufacturer to Distributor.



4.2. Payment Terms


Distributor shall pay Manufacturer for the Products in accordance with Manufacturer's payment terms, as may be amended from time to time upon written notice. Any amounts not paid by Distributor when due shall accrue interest at a rate equal to the lesser of [1.5%] per month or the maximum rate allowed by law.



5. Delivery and Risk of Loss

5.1. Delivery


Manufacturer shall deliver the Products to Distributor FOB (Free on Board) at Manufacturer's designated facility. Title to the Products, other than any software contained therein, and risk of loss shall pass to Distributor upon delivery to the carrier for shipment to Distributor. Distributor shall bear all costs of transportation and insurance.



5.2. Inspection


Distributor shall promptly inspect all delivered Products and give written notice to Manufacturer of any shortage, damage, or other nonconformity within [15] days after receipt. Any such notification shall specify the nature of the nonconformity and whether Distributor is seeking repair, replacement, or refund for the nonconforming Products. Failure to give such notice within the specified time period shall constitute an irrevocable acceptance of the Products.



6. Warranty and Returns

6.1. Warranty


Manufacturer warrants to Distributor that the Products, under normal use, shall be free from defects in materials and workmanship for a period of one (1) year from the date of original purchase. Manufacturer's sole obligation under this warranty shall be, at its option and expense, to repair or replace the defective Products.



6.2. Returns


Distributor may return any defective Products to Manufacturer for repair, replacement, or refund, as appropriate, in accordance with the Manufacturer's standard warranty terms and conditions.



7. Intellectual Property Rights

Manufacturer grants to Distributor a limited, non-exclusive, non-transferable license to use the Manufacturer's trademarks, trade names, and other intellectual property rights solely in connection with the advertising, promotion, and sale of the Products within the Territory during the term of this Agreement, subject to Manufacturer's prior written approval of all such uses.



8. Term and Termination

8.1. Term


This Agreement shall commence on the Effective Date and shall continue for a period of [3] years unless terminated earlier in accordance with the terms herein (the "Term"). This Agreement shall automatically renew for additional [1]-year periods unless either party gives written notice of non-renewal at least [90] days before the end of the then-current Term.



8.2. Termination for Cause


Either party may terminate this Agreement upon written notice to the other party in the event the other party materially breaches this Agreement, and such breach has not been cured within [30] days after receipt of written notice thereof.



9. Governing Law and Compliance

This Agreement shall be governed by and construed in accordance with the laws of the United States of America and the State of [Governing State], without regard to conflicts of law principles. Each party agrees to comply with all applicable laws, regulations, and export restrictions in connection with its performance under this Agreement.



10. Miscellaneous

10.1. Entire Agreement


This Agreement, along with any attachments and exhibits hereto, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior negotiations, understandings, and agreements, whether written or oral. This Agreement may only be amended by a written document signed by both parties.



10.2. Assignment


Neither party may assign any of its rights or obligations under this Agreement without the prior written consent of the other party, except that Manufacturer may assign its rights and obligations under this Agreement without consent in connection with a merger, acquisition, or sale of substantially all of its assets.



10.3. Notices


All notices, requests, and other communications hereunder must be in writing and will be deemed duly given and received when delivered personally, sent by certified or registered mail, return receipt requested, or sent by overnight courier to the addresses of the parties set forth in this Agreement or to such other addresses as either party may designate by notice to the other party in the manner provided herein.




IN WITNESS WHEREOF, the parties have executed this Product Distribution Agreement as of the date first written above.

_____________________________ _____________________________
StellarTech Electronics Inc Horizon Distribution Group LLC

By: ___________________________ By: ___________________________
Authorized Representative Authorized Representative

Title: _________________________ Title: _________________________

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Common Sections of a Product Distribution Agreement


In this Product Distribution Agreement, you will see the following sections:

  1. Purpose and Scope
  2. Appointment and Distribution Territory
  3. Distributor's Responsibilities
  4. Pricing and Payment Terms
  5. Delivery and Risk of Loss
  6. Warranty and Returns
  7. Intellectual Property Rights
  8. Term and Termination
  9. Governing Law and Compliance
  10. Miscellaneous


Summary of each section:

  1. Purpose and Scope : This section explains the purpose of the agreement, which is to establish the terms and conditions for the distributor to distribute, promote, and market the manufacturer's electronic devices. It also defines the products covered by the agreement.

  2. Appointment and Distribution Territory : This section appoints the distributor as a non-exclusive distributor of the products within the United States and its territories. The distributor is expected to use reasonable efforts to distribute, promote, and market the products according to the agreement.

  3. Distributor's Responsibilities : This section outlines the distributor's responsibilities, including marketing support, sales efforts, and providing periodic sales reports to the manufacturer.

  4. Pricing and Payment Terms : This section details the pricing of the products, any discounts or incentives, and the payment terms. It also states that the manufacturer can change the prices with prior written notice and that any unpaid amounts will accrue interest.

  5. Delivery and Risk of Loss : This section explains that the manufacturer will deliver the products to the distributor, and the title and risk of loss will pass to the distributor upon delivery. The distributor is responsible for transportation and insurance costs. The distributor must also inspect the products and notify the manufacturer of any issues within a specified time frame.

  6. Warranty and Returns : This section outlines the manufacturer's warranty for the products and the process for the distributor to return defective products for repair, replacement, or refund.

  7. Intellectual Property Rights : This section grants the distributor a limited, non-exclusive, non-transferable license to use the manufacturer's trademarks and other intellectual property rights solely for advertising, promotion, and sale of the products within the territory during the term of the agreement, subject to the manufacturer's approval.

  8. Term and Termination : This section states that the agreement will last for three years, with automatic one-year renewals unless either party gives written notice of non-renewal. It also outlines the process for terminating the agreement due to a material breach by either party.

  9. Governing Law and Compliance : This section states that the agreement is governed by the laws of the United States and a specific state, and that both parties must comply with all applicable laws and regulations.

  10. Miscellaneous : This section covers various miscellaneous provisions, such as the entire agreement, assignment, and notice requirements.

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