What Is Distributorship Agreement

At, we know how important it is to provide you with the perfect legal document. We have a list of ready-made legal models that have been reviewed by lawyers. If necessary, we also print and deliver your contracts and documents in stamp paper / plain paper. You will receive all the essential documents and agreements required for your business. Choose today! Another provision that would be potentially useful for the manufacturer would be one that specifies the specific grounds for termination. Many state laws allow termination as long as the manufacturer has a « reasonable reason » to do so. Some conditions that can be part of a distribution agreement to justify its termination are: Should you discuss what happens if another company acquires the manufacturer or distributor? In one case, for example, a merchant operated a line of agricultural products from a manufacturer who produced only agricultural products. The dealer also sold tractors from another manufacturer. A larger multinational, which also produced a number of tractors, acquired the agricultural products manufacturer. The company went on to say it wanted its dealers to run a « complete line, » including tractors.

This situation is often difficult to manage in advance in a distribution partnership, but this case highlights one of the things that can happen to the origin of a dispute. The end result was that the manufacturer fired the dealer because they did not manage a « complete line ». The distributor sued various theories and lost them all. (See Smith Machinery Company, Inc.c. Hesston Corporation, 878 F.2d 1290 (10th Cir. 1989) and Continental TV v. GTE Sylvania, Inc., 433 U.S. To protect your business, it`s a good idea to know about these joint and important agreements.

Should the distributor have a « primary area of responsibility »? The imposition of such a condition is an attempt by the manufacturer to encourage the distributor to obtain all possible sales outside a certain territory. Manufacturers are generally concerned about dealer skimming. This is where a merchant will make the sale simple and quick and will not look for potential new buyers. A joint and mutually beneficial agreement between the distributor and the manufacturer could be concluded by assigning to the distributor primary responsibility for distribution without actually preventing the distributor from selling that area. Another rather difficult provision that we have seen in some distribution agreements is that distributors are terminated if they do not meet some sort of standard measured by an « average ». This poses a complex conceptual problem. .