Distributor Agreements with Free Samples. This distributorship is an agreement between two independent parties, the vendor and distributor. The distributor has a contract to stock the vendor’s product. The distributor will usually be required by the vendor to hold adequate stock and maintain their outlet premises and infrastructure in a way that will reflect well on the vendor’s product. The distributor’s profit arises from the difference between the price at which they pay for the goods and the price at which they are able to sell the goods.
Distributorship is distinct from agency, licensing, franchising, cooperatives and multi-level marketing but may share elements of these. Although a clear distinction can be drawn between distribution and franchising, consider whether the relationship may be deemed a franchise or pyramid selling.
Distributor contracts involve concern agents or principals overseas. Such contracts may include terms from Incoterms. There is also a Practice Guide available on this topic The Practice Guide explains what the ‘Incoterms’ are and how to use them in international trade agreements.
The following precedents are also included in the Practice Guide.
Distributor agreement 1
Distributor buys goods from manufacturer to a specified net value, and a specified range. Manufacturer agrees to give distributor rebates, discounts. Rules for dispatch, payment, no assignment by distributor, maintenance of stock. Included in the Practice Guide – 9 pages long.
Distributor agreement 2
Manufacturer in Australia appoints a distributor agent to supply and distribute in an overseas country with an exclusive concession of rights of sale. Incoterms 2000 provisions are incorporated by reference. Included in the Practice Guide – 7 pages long.
Distributor agreement 3
Distributor Agreement when a principal appoints the Distributor as exclusive overseas Distributor for the territory. Distributor to hold adequate stocks to service demand. All orders to be referred to the distributor. Principal to arrange freight and insurance. Distributor to send payment to principal in AUD. Principal may terminate exclusivity if sufficient sales are not achieved. Distributor to report full information to the Principal re market conditions, sales make, stock and inventory, and to enable it to ensure that the Products meet local regulations relating to safety, labeling etc. Includes confidentiality 5 year restraint of trade clause. Schedule of products annexed. Included in the Practice Guide – 18 pages long.
Distributor agreement 4
Short Distributor Agreement appointing independent sole distributor to sell a product within a specific territory. The appointment does not prevent the manufacturer from selling directly in the territory without any intervention by the distributor. The manufacturer reserves the right to terminate the agreement if sales targets. Included in the Practice Guide – 5 pages long.