Distributor Agreement favouring the distributor (Chinese & English) (C118)


 
Distributor Agreement favouring the distributor (Chinese & English)

This dual language (Chinese–English) agreement is for use where a manufacturer or supplier appoints an exclusive distributor or re-seller for the sale of its products in a defined overseas territory.

This eleven page document contains 11 clauses covering

  • interpretation
  • appointment of distributor
  • orders for products
  • prices and payment
  • obligations of distributor
  • obligations of principal
  • patents and intellectual property
  • confidentiality
  • termination
  • language, governing law and resolution of disputes
  • a general clause detailing assignment, subcontracting, notices and the scope of the agreement.

Here the distributor buys on its own account for re-sale - unlike an agent who sells on the principal's behalf.

 C118 -独家批发销售协议(中英双语)

本协议适用于委托人是商品生产商或供应商,希望在规定的销售区域里指定批发商独家经销自己的产品。
如果你是独立的批发商或销售商,希望从再销售某种产品中获利,这份合同正是你需要的。从供货商处购买产品,利用自己的销售渠道再销售,而不是以代理人的名义销售。

 


Want more info? - See detailed Explanatory Notes below

ShareThis

Add to favoritesClick here to add this page to your favourites or bookmarks.


 

Buy Distributor Agreement favouring the distributor (Chinese & English) online

£69.00 + VAT

Your contract will be available for download from 'My Account'  immediately after payment.


Our Contracts Are:

  • Written by Expert Lawyers
  • Editable for Your Needs
  • Money-Saving
  • Ready to Download

How to Use ContractStore

You will find this contract in:

Chinese Contracts
Full Catalogue

 

 

 

 


 

What's in it?

Whilst for obvious reasons we can't show you the actual item before you purchase it, we can do the next best thing. We show you the explanatory notes that go with each contract and, in the case of books and forms, a brief summary. These will give you a good idea of the content of the document before you buy it. 

 

Explanatory Notes

contract

This Agreement contemplates that a manufacturer or supplier in one country will appoint a Distributor of its goods in another country for the resale of those goods in that local market.

The Agreement contemplates a fixed initial period which may be subject to renewal.

A Distributor buys for resale and each order placed by the Distributor will constitute a separate contract.  Unlike an agent, a Distributor is selling on his own account and not on behalf of the Principal.  Both parties will nonetheless want to be sure that the Distributor has adequate information and literature concerning the products as well as having a workforce capable of handling sales and any after-sales or maintenance which may be required.

Since this is a cross-border agreement - i.e. each of the parties is in a different territory with different laws - it is important that the Distributor has the agreement checked by lawyers in the Principal's country - and vice versa.  In some Gulf States, for example, the law does not recognise a distinction between a distributor and an agent and a distributorship agreement could be subject to local agency law and in some circumstances the agreement may be registerable and governed by the local law whatever the document itself may say.

Specific comments on the template are set out below.

First, please note that this Agreement contains some clauses with alternative wording and some parts of the Agreement are in square brackets [ ] and/or italics.  It is important to ensure that the final Agreement to be signed by the parties contains only wording that is agreed and that all alternative provisions and square brackets (and these Explanatory Notes) have been removed.  Similarly, all blanks should be filled in before signature.  There is more information on completing our documents at http://www.contractstore.com/signing_contracts

DATE

This is the date upon which the Agreement is executed - not necessarily the date upon which it comes into effect - which is dealt with in clause 2.2.

PARTIES

Here set out the full name of each of the parties and the official address of that party. If it is an English limited company, this will be the registered office.

INTRODUCTION

This is self-explanatory and briefly introduces the Agreement.

1.    INTERPRETATION

    We have inserted 4 definitions including that of the territory which needs to be defined.  The territory may cover a complete country, part of a country or more than one country, but whatever the case, be sure to define it precisely - do not, for example, say "any country in South East Asia" since there could be an argument as to what is meant by the South East Asia.  The Distributor often wants a larger territory than the Principal, but should beware of taking on too many territories which it cannot control, (particularly if the Principal insists on minimum sales quantities being met).

    Products need to be clearly defined.  The Principal may try to appoint different distributors for different products, whereas the Distributor may want the right to sell as many different products produced by the Principal as he can.

2.    APPOINTMENT OF DISTRIBUTOR

    The Agreement states that the Distributor is being appointed on an exclusive basis.  Clause 2 makes it clear that the Distributor is able to sell/distribute products that differ from the Principal’s Products.  This is deliberately wide and it is possible that the Principal may wish to clarify/limit this provision.

In clause 2.2 the date upon which the Agreement comes into effect should be stated as well as the initial period - say 2 years.  If notice of renewal is required, clause 2.2 might say that it will expire at the end of the initial period "unless it is renewed by agreement between the parties at least 3 months before the expiry date".

3.    ORDERS FOR PRODUCTS

    This clause sets out the arrangements for ordering and includes provision for the Distributor to give the Principal estimated requirements in advance so that he can plan accordingly.   Clearly, the precise details of this clause will need to be tailored to the particular arrangements in place within the relevant organisations.

    Clause 3.3 makes is clear that each sale constitutes a separate order for goods.  Each order may be governed by Principal's standard Terms & Conditions of Sale or (as stated here) Distributor's Terms & Conditions of Purchase, or perhaps an agreed set of conditions will be developed.  It may be sensible to state that a copy of the agreed terms is annexed to the Distributorship agreement so that there is no doubt as to terms which are to be incorporated.

    Clause 3.4 gives the Principal the right to modify products and to change product lines but advance notice is required.

4.    PRICES & PAYMENT

    Clause 4.1 assumes that the standard list price of the Principal will apply to all sales but there may be some pre-agreed discounts, in which case the words in square brackets at the end of the clause should be incorporated in the document.  It is not uncommon for the discount to be referred to in an appendix to the Agreement.

    Clause 4.2 deals with additional payments over and above the list price which may be payable.

    Clause 4.3 provides for payment to be within a specified period.  (A Principal is likely to require payment on a letter of credit but we have not specified this in this version of the Agreement.  See, by contrast, Document A117).

    Clause 4.4 deals with currency and this need to be specified here.

Clause 4.5 makes it clear that the Distributor is responsible for all charges and customs clearances at the port of arrival.

5.    DISTRIBUTOR'S OBLIGATIONS

    The list of obligations is fairly general and reasonably self-explanatory (Document A117 contains a more comprehensive list of obligations on Distributor).

    Clause 5.4 assumes that the Principal will arrange for visits to the Distributor's territory from time to time - from a commercial point of view this is certainly to be recommended.

6.    PRINCIPAL'S OBLIGATIONS    

    This clause contains a number of obligations on Principal with respect to marketing literature, training, technical support etc.

7.    PATENTS & INTELLECTUAL PROPERTY

    It is usual for a Principal to try to protect its IP rights and such a clause has been included here.
 
    The main purpose of clause 7.2 is to ensure that the Principal is notified by the Distributor if, for example, counterfeit goods appear in the territory.

8.    CONFIDENTIALITY

    To the extent that information passing between the Principal and the Distributor is confidential, this clause imposes confidentiality obligations on both parties.  

9.    TERMINATION

    Clause 9.1 sets out the grounds on which either party can terminate the Agreement.  It is drafted so as to be fairly balanced.

    It is useful to specify the consequences of termination and these are dealt with in clauses 9.2 to 9.5. Note in particular the provisions of clauses 9.2.2 and 9.5: as currently drafted the Principal’s liability to the Distributor for termination other than as a result of a breach of the Agreement by the Distributor is wide-ranging and includes claims for loss of anticipated profits.  This area is likely to be the subject of negotiations between the Principal and Distributor and it is possible that the Principal may wish to impose a cap on its liability.  Local legal advice should be taken as to the rights of each party on termination and the effectiveness of any cap or limitation of liability.  See Document A117 for an example of an agreement which favours the Principal upon termination.

10.    GENERAL

    This covers a number of issues:

10.1    Assignment.  The relationship is one which would not normally be assignable and an express prohibition on assignment is included subject to the other party’s written agreement.

10.2    Sub-contracting.  This is drafted so as to make it clear that the Distributor has the right to subcontract its role to others but must notify the Principal.
 
10.3    Notices.  This is a mechanism for giving formal notices under the Agreement and is usually advisable.

10.5    Entire Agreement.  Quite often a distributorship agreement is only entered into after a course of dealings and/or an exchange of letters.  The purpose of this clause is to make it clear that the Agreement replaces those earlier arrangements.

 
11.    LANGUAGE, LAW & DISPUTES
    
    This clause specifies the ruling language of the Agreement – either English or Chinese in 11.1.  

    11.2 specifies the governing law – i.e. the law of the country that will be applied when interpreting the contract.

    11.3 provides for the parties to try to resolve any dispute by direct negotiation.

    If this fails, the dispute will either be referred to the courts or to arbitration and we have alternative versions of 11.4, one of which should be deleted.  If the courts are preferred to arbitration, the country to be selected will normally be the same as that in clause 11.2.   If arbitration is chosen, the arbitral tribunal needs to be specified and we have suggested either CIETAC, China International Trade and Economic Commission, which is based in China or the LCIA, London Court of International Arbitration, which is in London.  There is free information on our website concerning governing law and arbitration.  

SIGNING

Each party should ensure that the Agreement is signed by a director or other duly authorised officer.  The signing clause assumes that each signature will be witnessed by a third party.


For guidance on signing contracts please see our notes at http://www.contractstore.com/signing_contracts

 

 

Back to top

 

 

 

 

Important Notice
This notice applies to all materials and information available on this website.

The contents of this site are protected by copyright. They may not be reproduced, distributed or published in any way without the consent of The ContractStore Ltd.

All information and materials on this site are provided on an 'as is' basis and are not intended in any way to be comprehensive. Any reader making use of this site does so at his/her own risk and readers are advised to take independent professional advice before acting on any information or materials found here. The ContractStore Ltd accepts no responsibility and gives no representations or warranties, express or implied, that any of the information and materials on this site are complete, accurate or free from errors or omissions.

Registered office: Acre House, 11/15 William Road, London NW1 3EW, United Kingdom
©ContractStore Ltd, 2012. All rights reserved.

Contact us | About us | CookiesCopyright notice | Terms and Conditions

 We use cookies to provide visitors with a good user experience. New regulations mean we need your consent for this use. For more information click here