Dundas Lawyers helps resellers, suppliers and manufacturers develop or verify reseller contracts to protect their interests in the transaction and ensure compliance with the rules in the future. From time to time, we also help with the assembly of documents for those who wish to make several contracts. What is the initial duration of the agreement? Do it long enough to give the distributor time to market with your products, but no more. It can be extended each year if it works. Once you have selected your distributor, make sure you have a written sales contract with them, which defines the terms of the deal and allows you to terminate the agreement if things don`t work properly. Whistleblowing such an agreement in some countries can result in significant claims, which requires you to seek legal advice before the text is finalized. Make sure you protect your copyrights, patents and trademarks. Your distributor should only be able to use it as long as the agreement remains in effect and it is useful to have a clause requiring it to notify you and act to protect your interests, for example when counterfeit goods appear on the market. In any case, you should include certain revenue targets agreed in the agreement, as this allows you to monitor the distributor`s performance. Combined with revenue targets, this should be a provision that not only allows you to revise objectives, but also gives you the right to terminate the contract if, for example, targets for two or three consecutive quarters are not met.
Here are some of the key issues you need to consider and address in your sales contract. If you deliver your goods to a dealer, you should check to see if you have restrictions on where the dealer can sell your products. For example, if you have your own shop in the Brisbane CBD that sells your goods, it may be detrimental to allow another store nearby to resell the same goods. This condition usually includes whether the delivery is scheduled, if it is a regular delivery or if the dealer must order goods from you and how the goods should be delivered. If you find yourself in a situation where a dealer claims to be an agent of your company, please contact us for legal advice from one of our specialist lawyers who will guide you. It is customary to indicate that each accepted order is a separate contract between the two parties and that the sales are made within your terms and conditions of sale. You can add a copy to the agreement. You should also consult local legal advice before signing a sales contract, because there may be local laws that you need to consider – for example, it may be necessary for a sales company to be owned by nationals of the country.
It is recommended that you get legal advice before an agreement is reached, not only in that country, but also by a lawyer in the distributor`s territory. It is important to distinguish the dealer relationship from similar (yet different) relationships: despite the similarities, a reseller contract generally does not create an agency relationship because one of the fundamental characteristics of an agency relationship is lacking. In other words, a reseller cannot enter into contracts on behalf of the supplier that are typical of an agency relationship. If you are the supplier of products considered to be in a niche category and therefore have few other competing suppliers, it may be worth including a clause preventing the reseller from selling your competitors` products or similar products.
