Ready-to-Use Distribution Agreement Contract Template
This ready-to-use distribution agreement template helps suppliers and distributors set out the commercial terms governing the resale of products. It covers territory, appointment, orders, prices, payment, delivery, marketing, intellectual property, confidentiality, duration, termination, and dispute resolution. Adapt it to the goods, market, and applicable law before signing.
A distribution agreement sets the legal and commercial framework under which a supplier authorizes a distributor to purchase and resell products in a defined market. A clear written agreement helps both parties allocate responsibilities for orders, pricing, promotion, delivery, compliance, and customer support. It can be used for exclusive, non-exclusive, or sole distribution arrangements. The final terms should reflect the products, the territory, and the law governing the relationship.
What a Distribution Agreement Covers
A distribution agreement normally describes a business-to-business resale relationship: the distributor buys products from the supplier and resells them in its own name and for its own account. This differs from an agency arrangement, where an agent may act on behalf of the principal rather than purchasing stock for resale.
The agreement should identify the products precisely, establish the territory and sales channels, and state whether the distributor has exclusive rights. It should also clarify that the distributor is an independent business and does not have authority to bind the supplier unless expressly agreed.
Exclusive and Non-Exclusive Appointment
An exclusive appointment generally prevents the supplier from appointing other distributors in the agreed territory, subject to any reserved accounts or channels. A non-exclusive appointment allows the supplier to sell directly and to appoint other distributors, which should be stated expressly to avoid misunderstandings.
Key Terms to Include
The following table highlights core provisions that should be completed carefully. Product specifications, price lists, and performance targets are often included in schedules so that they can be updated without rewriting the entire agreement.
| Document field | Purpose | Frequent error |
|---|---|---|
| Products | Defines the goods covered by the appointment. | Using vague product descriptions without a schedule. |
| Territory | Sets the geographic market and permitted channels. | Failing to address online or cross-border sales. |
| Pricing and payment | States prices, currency, taxes, payment deadlines, and late-payment consequences. | Leaving price-change notice periods unspecified. |
| Term and termination | Explains duration, renewal, notice, and termination rights. | Not stating what happens to unsold inventory. |
| Performance targets | Establishes minimum purchases or sales objectives where applicable. | Making targets binding without a review mechanism. |
Commercial and Operational Responsibilities
The supplier may be responsible for manufacturing, product documentation, warranties, training, and reasonable availability of stock. The distributor may be responsible for local promotion, storage, customer relationships, regulatory permissions, and accurate marketing statements.
Orders, Delivery, and Risk
The agreement should explain how orders are placed and accepted, the applicable delivery terms, when title and risk pass, and who bears freight, insurance, customs, and taxes. If international sales are involved, the parties may choose an appropriate Incoterms® rule and identify the named place clearly.
- Define the products and any approved specifications or catalogues.
- State the territory, sales channels, and excluded customers or accounts.
- Set payment currency, credit limits, invoicing, and tax treatment.
- Describe delivery arrangements, inspection periods, and return procedures.
- Allocate responsibility for marketing, compliance, warranties, and after-sales support.
Editable template
Document template
DISTRIBUTION AGREEMENT
Place: ____________________ Date: ____________________
This Distribution Agreement (the “Agreement”) is made between:
Supplier: ____________________, a company organized under the laws of ____________________, with registered office at ____________________, registration number ____________________, represented by ____________________.
Distributor: ____________________, a company organized under the laws of ____________________, with registered office at ____________________, registration number ____________________, represented by ____________________.
The Supplier and the Distributor are each a “Party” and together the “Parties.”
| Variable | Details |
|---|---|
| Products | ____________________ |
| Territory | ____________________ |
| Distribution status | Exclusive / Non-exclusive / Sole: ____________________ |
| Initial term | ____________________ |
| Currency and payment term | ____________________ |
| Minimum purchase or sales target | ____________________ |
| Delivery terms | ____________________ |
| Governing law and forum | ____________________ |
- Appointment. The Supplier appoints the Distributor as its ____________________ distributor for the Products within the Territory, subject to the terms of this Agreement. The Distributor accepts the appointment and shall act as an independent contractor.
- Products and Orders. The Products are described in Schedule 1 or as otherwise agreed in writing. Orders submitted by the Distributor are binding only when accepted in writing by the Supplier. The Supplier may reject an order for reasonable commercial, credit, compliance, or supply reasons.
- Territory and Sales Channels. The Distributor may market and resell the Products only within the Territory and through the following approved channels: ____________________. Reserved customers, accounts, channels, or territories are: ____________________.
- Prices and Payment. Product prices are set out in the Supplier’s current price list or Schedule 2. The Distributor shall pay invoices in ____________________ within ____________________ days of the invoice date. Late payments may accrue interest at ____________________, to the extent permitted by applicable law.
- Delivery, Title, and Risk. Delivery shall be made ____________________. Title to the Products passes upon ____________________. Risk of loss or damage passes upon ____________________. The Distributor shall inspect deliveries within ____________________ days and notify the Supplier promptly of any visible shortage or defect.
- Distributor Obligations. The Distributor shall promote the Products professionally, maintain appropriate facilities and personnel, comply with applicable laws, avoid misleading statements, protect the Supplier’s intellectual property, and provide reasonable sales and market reports.
- Supplier Obligations. The Supplier shall use reasonable efforts to supply accepted orders, provide available product information, and honor applicable product warranties in accordance with its warranty terms.
- Intellectual Property and Marketing. The Distributor may use the Supplier’s trademarks and marketing materials solely to market the Products during the term of this Agreement and in accordance with written brand guidelines. No ownership or license beyond this limited use is granted.
- Confidentiality. Each Party shall keep confidential all non-public commercial, technical, financial, and customer information received from the other Party and shall use it only for performing this Agreement.
- Term and Termination. This Agreement begins on ____________________ and continues until ____________________, unless terminated earlier. Either Party may terminate by giving ____________________ written notice. Either Party may terminate immediately by written notice for material breach not cured within ____________________ days, insolvency, non-payment, or illegality.
- Consequences of Termination. Upon termination, the Distributor shall cease using the Supplier’s intellectual property, pay all outstanding amounts, and return or destroy confidential information upon request. Remaining inventory shall be handled as follows: ____________________.
- Governing Law and Disputes. This Agreement is governed by the laws of ____________________. The courts of ____________________ shall have exclusive jurisdiction, unless the Parties agree to resolve disputes by arbitration under ____________________ rules.
- Entire Agreement. This Agreement and its schedules constitute the entire agreement between the Parties regarding its subject matter. Any amendment must be in writing and signed by authorized representatives of both Parties.
Schedule 1 – Products: ____________________
Schedule 2 – Prices and Payment Details: ____________________
Schedule 3 – Territory, Channels, and Targets: ____________________
For the Supplier: ____________________
Name: ____________________
Title: ____________________
Date: ____________________
For the Distributor: ____________________
Name: ____________________
Title: ____________________
Date: ____________________
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How to Complete the Template
Before signing, both parties should review the commercial assumptions behind the document, including expected volumes, stock levels, margins, and local regulatory requirements. Attach schedules for products, prices, territories, and targets where detailed information is required.
- Insert the full legal names, registration details, and addresses of both parties.
- Describe the products, territory, distribution status, and permitted sales channels.
- Complete pricing, payment, delivery, minimum purchase, and marketing provisions.
- Review the governing law, dispute resolution clause, schedules, and signature authority.
Use measurable language for exclusivity, sales targets, notice periods, and stock repurchase rights; vague commercial promises are difficult to enforce and manage.
Duration, Termination, and Post-Termination Effects
A fixed-term agreement should state its start date, end date, and whether it renews automatically. An indefinite agreement should provide a reasonable notice procedure, subject to mandatory rules that may apply in the relevant jurisdiction.
Termination clauses should distinguish between ordinary termination and immediate termination for serious breach, insolvency, illegality, or non-payment. They should also address outstanding invoices, final orders, confidential material, use of trademarks, customer communications, and any buy-back of remaining inventory.
Legal and Compliance Considerations
Distribution arrangements may be affected by competition law, product safety rules, consumer protection requirements, export controls, data protection obligations, and sector-specific regulations. Restrictions on resale prices, online sales, customer groups, or territories may require particular legal review.
For cross-border relationships, choose the governing law and dispute forum deliberately. The parties should also consider whether international sales rules apply and whether the contract needs language, tax, customs, or local registration provisions.
Frequently Asked Questions
Is a distribution agreement the same as an agency agreement?
No. A distributor typically buys and resells goods in its own name and assumes commercial risk, while an agent generally promotes or negotiates sales for a principal. The legal consequences can differ substantially.
Can a distributor be granted exclusivity?
Yes, if the agreement clearly defines the territory, products, channels, exceptions, duration, and any performance conditions. Competition rules may limit certain restrictions, especially in particular markets.
What should happen to stock when the agreement ends?
The agreement should state whether the distributor may sell remaining stock during a run-off period, whether the supplier may repurchase it, and how the repurchase price and condition of the goods will be determined.