A distribution agreement is a formal written commercial contract that outlines the terms, conditions, and the dynamics between the manufacturer or supplier and the distributor.

Whilst the distribution agreement governs the relationship between the supplier and the distributor, the supplier’s standard terms and conditions dictate the terms by which products are sold to the distributor. As a result, it is essential for these two documents to work together seamlessly.

If there is a requirement for distribution agreement there are four key types to consider;

  • Exclusive Distribution
  • Non-Exclusive Distribution
  • Selective Distribution
  • Sole Distribution

Distribution agreements serve as a low-risk strategy for business expansion into new markets or territories. If you’re a product supplier, encountering a distribution agreement is common—a pivotal contract between a distributor and supplier. These agreements prove invaluable in safeguarding the interests of each party should ones of parties fall short of meeting expectations.

Effective management of a distribution agreement is essential for the success of a business, looking to explore potential of new markets. However, improperly drafted agreements can pose significant risks.