Distribution Agreement

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Sets out the commercial terms between a Supplier of goods/services and a Distributor for resale in a specified territory. May be exclusive or non-exclusive.

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In a distribution agreement, one party (the Distributor) buys goods from another (the Supplier) in order to resell them to its own customers. There is therefore a contract between the Supplier and the Distributor, the Distributor and its customers, but not the Supplier and the customers.

This UK Distribution Agreement sets out the commercial terms between a Supplier of goods and/or services to another party, the Distributor, for resale in a specified territory (e.g. the UK). The Agreement allows the appointment to be either exclusive or non-exclusive.

Among others, this form includes the following key provisions:
  • Duration and Termination of the Agreement
  • Rights granted
  • Restrictions on the Distributor
  • Distributor’s marketing obligations
  • Supply of and payment for the goods and/or services
  • Support and training obligations on the Supplier
  • Protection and use of intellectual property rights.
This Distribution Agreement has been created by UK lawyers for use in England and Wales.
This is the content of the form and is provided for your convenience. It is not necessarily what the actual form looks like and does not include the information, instructions and other materials that come with the form you would purchase. An actual sample can also be viewed by clicking on the "Sample Form" near the top left of this page.












Distribution Agreement
(England and Wales)






This Packet Includes:
1.  General Information
2.  Instructions and Checklist
3.  Distribution Agreement





General Information
Distribution Agreement
In a distribution agreement, one party (the Distributor) buys goods from another (the Supplier) in order to resell them to its own customers. There is therefore a contract between the Supplier and the Distributor, the Distributor and its customers, but not the Supplier and the customers.
This Distribution Agreement sets out the terms of the relationship between the Distributor and the Supplier. The terms will cover such matters as the goods to be sold, price, payment, quality and delivery. The terms will also cover the type of advertising the Distributor can undertake and the training of it sales staff.
Unlike an agent, the Distributor will not receive commission for goods sold.  He will make his profits from the margin between the price he pays for the goods and the price at which he sells them. Note that the Supplier cannot tell the Distributor to sell the products at minimum price to its customers as that is price fixing.




Instructions and Checklist
Distribution Agreement

  Read the agreement carefully. Clear uncomplicated language has been used throughout and the terms will be self explanatory.

   Insert all requested information in the spaces provided on the form.  You will see throughout the agreement blank spaces or words contained within square brackets. These square brackets mean that this is an instruction to you and you will need to either fill in the missing information or delete or amend the wording as appropriate. Where you see the clause numbering within square brackets this means that you must check the clause numbering to ensure that the clause numbers referred to are still correct if you have changed or deleted any clauses of the agreement.  If you consider that there are clauses that are not appropriate for your agreement then please delete them.

     This form contains the basic terms and language that should be included in similar agreements.  

     Both parties must sign the agreement.

   Both parties should retain either an original or copy of the signed agreement.
   All legal documents should be kept in a safe location such as a fireproof safe or safe deposit box.  


Step-by-Step Instructions


Distribution Agreement

Recital A
The Distributor will need to set out the nature of the goods it manufacturers.
Clause 1
In the definition for Territory the Supplier will need to determine what area this will cover. The Distributor will have exclusive right to sell goods within this area so careful thought will need to be given to what this will be. If it is intended that the Supplier will appoint several distributors then he will need to ensure that each distributor has his own unique territory. An example of a Territory would be the area with the M25, The county of Essex or England.
In definition of Products it states that the products will be defined as those goods listed in schedule 1. The parties will therefore need to carefully list those goods which the Distributor will be authorised to sell.
Clause 2.6
This agreement provides for the Distributor to be the exclusive seller of the goods in the Territory. This can obviously only continue provided the Distributor is actually selling the goods and making more orders from the Manufacturer.  If the Distributor does not make the order targets as set out in this clause then either this exclusivity can end or the agreement can be terminated. The parties will need to insert the relevant invoice values.
Clause 6
This agreement provides for support and training to be given by the Manufacturer to the Distributor to assist in the marketing of the goods.  If this is not what is intended between the parties, this clause should be deleted.
Also note clause 6.3 which states that such support will be free of charge (other than expenses). Please amend if not appropriate.
Clause 11.1


The parties will need to determine when the agreement will come into effect. It will be either the date of the agreement or at some later date as stated by the parties. You will need to delete the appropriate wording in
the brackets. You will also need to determine how long the agreement will last and how many months notice the parties will require to terminate the agreement.


Clause 12.2
It is advised that the six month restriction provided for in the agreement is not increased beyond six months without taking explicit legal advice on this point.






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DISTRIBUTION AGREEMENT
Date:                                                             20
Parties:
(1)   “The Manufacturer”: [                                              ] a company incorporated in England under company number [________] whose registered office is at [                                                                                         ]
(2)   “The Distributor”: [                                              ] a company incorporated in England under company number [________] whose registered office is at [                                                                                         ].
Recitals:
(A)   The Manufacturer manufactures [________].
(B)   The Distributor has considerable marketing experience in the Territory and wishes to act as the Manufacturers distributor for the Products.
Operative provisions:
1.   Interpretation
1.1   In this agreement, unless the context otherwise requires:
“FORCE MAJEURE
means, in relation to either party, any circumstances beyond the reasonable control of that party (including, without limitation, any strike, lockout or other form of industrial action);
“INDEX FIGURE
means the monthly figure given by the Retail Prices Index;
“INTELLECTUAL PROPERTY
means any patent, copyright, registered design, trade mark or other industrial or intellectual property right subsisting in the Territory in respect of the Products, and applications for any of the foregoing;
“INVOICE VALUE
means the sums invoiced by the Manufacturer to the Distributor in respect of any Products, less any value added tax (or other taxes, duties or levies) and any amounts for transport or insurance included in the invoice;
“PRODUCTS
means, subject as provided in clause [3.2], such of the products listed in Schedule 1 as are at the date of this agreement in the range of products manufactured by or for the Manufacturer, and such other products as may from time to time be agreed in writing by the parties;
“RESTRICTED INFORMATION
means any information which is disclosed to the Distributor by the Manufacturer under or in connection with this Agreement (whether orally or in writing, and whether or not such information is expressly stated to be confidential or marked as such);
“RETAIL PRICES INDEX
means the General Index of Retail Prices which is published monthly in the United Kingdom by the Office for National Statistics, or, if this ceases to be published, such other index as more closely resembles that index;
“TERRITORY
means [________];
“TRADE MARKS
means all Intellectual Property and trade marks (registered and unregistered) used by the Manufacturer on or in relation to the Products at any time during this agreement;
“YEAR OF THIS AGREEMENT
means the period of 12 months from the date of this agreement and each subsequent consecutive period of 12 months during the period of this Agreement.
1.2   Any reference in this Agreement to “writing” or related expressions includes a reference to cable, facsimile transmission, e-mail or comparable means of communication.

1.3   Any reference in this Agreement to any provision of a statute shall be construed as a reference to that provision as amended, reenacted or extended at the relevant time.
1.4   The headings in this Agreement are for convenience only and shall not affect its interpretation.
2.   Appointment of distributor
2.1   The Manufacturer hereby appoints the Distributor as its distributor for the resale of the Products in the Territory, and the Distributor agrees to act in that capacity, subject to the terms of this agreement.
2.2   Subject as provided in clause 2.6, the Manufacturer shall not:
2.2.1   appoint any other person, firm or company in the Territory as a distributor or agent for the Products in the Territory; or
2.2.2   supply to any other person, firm or company in the Territory any of the Products, whether for use or resale.
2.3   The Distributor shall be entitled to describe itself as the Manufacturers “Authorised Distributor” for the Products, but shall not hold itself out as the Manufacturers agent for sales of the Products or as being entitled to bind the Manufacturer in any way.
2.4   The Distributor shall not sell any of the Products that it purchases from the Manufacturer through a sales agent or to a subdistributor without the express written permission of the Manufacturer.
2.5   Nothing in this agreement shall entitle the Distributor to:
2.5.1   any priority of supply in relation to the Products as against the Manufacturers other distributors or customers; or
2.5.2   any right or remedy against the Manufacturer if any of the Products are sold in the Territory by any person, firm or company outside the Territory other than the Manufacturer.
2.6   If in any Year of this Agreement the aggregate Invoice Value of the Products ordered by the Distributor from the Manufacturer falls short of the aggregate Invoice Value shown opposite that Year of this Agreement in column (2) of the table below, as adjusted for that Year of this Agreement pursuant to clause 2.7:
(1)
(2)
Year
Aggregate Invoice value
1
[________]
2
[________]
3
[________]
4
[________]
5 and each year thereafter
[________]
then, unless the Distributor pays a sum equal to the shortfall to the Manufacturer within [________] days after the end of that Year of this Agreement, the Manufacturer shall be entitled, by giving not less than [________] months written notice to the Distributor within [________] months after the end of that Year of this Agreement, to:
2.6.1   terminate the restrictions on the Manufacturer specified in clause 2.2; or
2.6.2   terminate this agreement.
2.7   The figures in column (2) of the table in clause 2.6 shall be reviewed with effect from the first day of each Year of this Agreement (other than the first) and if upon the review the Index Figure last published before that date shows an increase or decrease in relation to the Index Figure last published before the date of this agreement, the figures in column (2) shall for that Year of this Agreement be increased or decreased (as the case may be) in the same proportion.
2.8   The Distributor shall not:
2.8.1   obtain the Products (or any goods which compete with the Products) for resale from any person, firm or company other than the Manufacturer;
2.8.2   be concerned or interested, either directly or indirectly, in the manufacture or distribution in the Territory of any goods which compete with the Products;
2.8.3   seek customers, establish any branch or maintain any distribution depot for the Products in any country which is outside the Territory but within the European Economic Area; or
2.8.4   sell the Products to any customer in any country which is:
(a)   outside the Territory and outside the European Economic Area; or
(b)   within the Territory if to the knowledge of the Distributor that customer intends to resell the Products in any country which is outside the Territory and outside the European Economic Area.
3.   Supply of the products
3.1   Subject as provided in clauses 2.5.1 and 3.2, the Manufacturer shall use its reasonable endeavours to supply the Products to the Distributor in accordance with the Distributors orders.
3.2   The Manufacturer shall not be under any obligation to continue the manufacture of all or any of the Products, and shall be entitled to make such alterations to the specifications of the Products as it may think fit.
3.3   Each order for the Products shall constitute a separate contract, and any default by the Manufacturer in relation to any one order shall not entitle the Distributor to treat this agreement as terminated.
3.4   The Distributor shall, in respect of each order for the Products to be supplied under this agreement, be responsible for:
3.4.1   ensuring the accuracy of the order;
3.4.2   providing the Manufacturer with any information which is necessary in order to enable the Manufacturer to fulfil the order and to comply with all labelling, marketing and other applicable legal requirements in the Territory; and
3.4.3   obtaining any necessary import licences, certificates of origin or other requisite documents, and paying all applicable customs, duties and taxes in respect of the importation of the Products into the Territory and their resale in the Territory.
3.5   The Distributor shall give the Manufacturer not less than [________] months written notice of its estimated requirements of the Products for each month, and shall promptly notify the Manufacturer of any changes in circumstances which may affect its requirements.
3.6   Upon receipt and confirmation of each order the Manufacturer shall as soon as is practicable inform the Distributor of the Manufacturers estimated delivery date for the consignment. The Manufacturer shall use all reasonable endeavours to meet the delivery date, but time of delivery shall not be of the essence and accordingly the Manufacturer shall have no liability to the Distributor if, notwithstanding such endeavours, there is any delay in delivery.
3.7   The title to any consignment of the Products shall not pass to the Distributor until the Manufacturer has received payment in full of the price therefor.
3.8   Risk of loss of or damage to any consignment of the Products shall pass to the Distributor from the time the Manufacturer notifies the Distributor that the Products are available for collection or from the time of delivery to the carrier at the Manufacturers premises, whichever is earlier.
3.9   The standard conditions of sale of the Manufacturer from time to time (a copy of the current form of which has been supplied to the Distributor prior to the date of this agreement) shall apply to all sales of the Products to the Distributor pursuant to this agreement, except to the extent that any of the same is inconsistent with any of the provisions of this agreement, in which case the latter shall prevail. The Manufacturer shall give to the Distributor notice in writing of any change in such standard conditions of sale not less than one month prior to such change taking effect for the purposes of this agreement.
4.   Payment for the products
4.1   All Products to be supplied by the Manufacturer under this Agreement shall be sold on an ex works basis, and accordingly the Distributor shall, in addition to the price, be liable for arranging and paying all costs of transport and insurance.
4.2   Where the Manufacturer agrees to arrange for transport and insurance as agent for the Distributor, the Distributor shall reimburse to the Manufacturer the full costs thereof and all the applicable provisions of this agreement shall apply with respect to the payment of such costs as they apply to payment of the price of the Products.
4.3   The prices for all Products to be supplied under this Agreement shall be the Manufacturers ex works list prices from time to time (inclusive of packaging costs) less [________] per cent and accordingly the Manufacturer shall:
4.3.1   supply to the Distributor up to date copies of all price lists for the Products from time to time; and
4.3.2   give the Distributor not less than [________] months notice in writing of any alteration in such list prices, and the prices as so altered shall apply to all Products delivered on and after the applicable date of the increase, including outstanding orders.
4.4   A deposit of [________] per cent of the relevant list price for each order shall be payable by the Distributor at the time of placing the order, and the balance of the price shall be invoiced for payment on delivery.
4.5   If the Distributor fails to pay the price for any Products within [________] days after the date of the invoice therefor, the Manufacturer shall be entitled (without prejudice to any other right or remedy it may have) to:
4.5.1   cancel or suspend any further delivery to the Distributor under any order;
4.5.2   sell or otherwise dispose of any Products which are the subject of any order by the Distributor, whether or not appropriated thereto, and apply the proceeds of sale to the overdue payment; and
4.5.3   charge the Distributor interest on the price at the rate of [________] per cent per annum above Barclays Bank PLC base rate in force from time to time from the date the payment became due until actual payment is made (irrespective of whether the date of payment is before or after any judgment or award in respect of the same).
4.6   All prices for the Products are exclusive of any applicable value added or any other sales tax, for which the Distributor shall be additionally liable.
4.7   All payments shall be made by the Distributor in sterling by transfer to such bank account as the Manufacturer may from time to time notify in writing to the Distributor.
5.   Marketing of the products
5.1   The Distributor shall use its reasonable endeavours to promote the sale of the Products throughout the Territory and, subject to compliance by the Manufacturer of its obligations under clause [3.1], to satisfy market demand therefor.
5.2   The Distributor shall be entitled, subject as provided in this agreement, to promote and market the Products in the Territory in such manner as it may think fit, and in particular shall be entitled to resell the Products to its customers at such prices as it may determine.
5.3   The Distributor shall maintain such stocks of the Products as may be necessary to meet its customers requirements.
5.4   In connection with the promotion and marketing of the Products the Distributor shall:
5.4.1   make clear, in all dealings with customers and prospective customers, that it is acting as distributor of the Products and not as agent of the Manufacturer;
5.4.2   provide to the Manufacturer copies of its up to date price lists;
5.4.3   provide the Manufacturer on a monthly basis with a report, in such form as the Manufacturer may reasonably require, of sales of the Products which it has made in the preceding month and containing such other information as the Manufacturer may reasonably require;
5.4.4   from time to time consult with the Manufacturers representatives for the purpose of assessing the state of the market in the Territory and permit them to inspect any premises or documents used by the Distributor in connection with the sale of the Products;
5.4.5   at the request of the Manufacturer provide to it copies of such sales aids, including (without limiting the foregoing) catalogues, sales brochures and sales manuals, as relate to the Products;
5.4.6   use in relation to the Products only such advertising, promotional and selling materials as are approved in writing by the Manufacturer;
5.4.7   maintain an active and, subject to implementation of clause 6.2, suitably trained sales force;
5.4.8   spend not less than £[________] on advertising the Products in the Territory during each Year of this Agreement; and
5.4.9   provide an after sales service for customers in relation to the Products to the Manufacturers reasonable satisfaction.
6.   Support and training
6.1   The Manufacturer shall from time to time provide the Distributor with such samples, catalogues, brochures and up to date information concerning the Products as the Manufacturer may consider appropriate or as the Distributor may reasonably require in order to assist the Distributor with the sale of the Products in the Territory, and the Manufacturer shall endeavour to answer as soon as practicable any technical enquiries concerning the Products which are made by the Distributor or its customers.
6.2   During the first Year of this Agreement:
6.2.1   the Manufacturer shall make available to the Distributor (at such time as may be agreed and for a period not exceeding [________] working days) the services of a suitably qualified employee of the Manufacturer to assist the Distributor in the marketing of the Products; and
6.2.2   the Distributor shall be entitled to send to the Manufacturers premises (at such time as may be agreed and for a period not exceeding [________] working days) up to [________] suitably qualified employees of the Distributor for training by the Manufacturer in matters relating to the Products and their marketing.
6.3   The services to be provided by the Manufacturer under clauses 6.1 and 6.2 shall be free of charge, but the Distributor shall:
6.3.1   reimburse to the Manufacturer all travelling, accommodation and other expenses reasonably incurred by any employees of the Manufacturer in providing such services; and
6.3.2   remain liable for all salaries and other employment costs of, and all travelling, accommodation and other expenses incurred by, employees of the Distributor who are sent to the Manufacturers premises.
7.   Intellectual property
7.1   The Manufacturer authorises the Distributor to use the Trade Marks in the Territory on or in relation to the Products for the purposes only of exercising its rights and performing its obligations under this Agreement and, subject as provided in clause 2.6, the Manufacturer shall not so authorise any other person, firm or company.
7.2   The Distributor shall ensure that each reference to and use of any of the Trade Marks by the Distributor is in a manner from time to time approved by the Manufacturer and accompanied by an acknowledgement, in a form approved by the Manufacturer, that the same is a trade mark (or registered trade mark) of the Manufacturer.
7.3   The Distributor shall not:
7.3.1   make any modifications to the Products or their packaging;
7.3.2   alter, remove or tamper with any Trade Marks, numbers, or other means of identification used on or in relation to the Products;
7.3.3   use any of the Trade Marks in any way which might prejudice their distinctiveness or validity or the goodwill of the Manufacturer therein;
7.3.4   use in relation to the Products any trade marks other than the Trade Marks without obtaining the prior written consent of the Manufacturer; or
7.3.5   use in the Territory any trade marks or trade names so resembling any trade mark or trade names of the Manufacturer as to be likely to cause confusion or deception.
7.4   Except as provided in clause 7.1 the Distributor shall have no rights in respect of any trade names or Trade Marks used by the Manufacturer in relation to the Products or of the goodwill associated therewith, and the Distributor hereby acknowledges that, except as expressly provided in this agreement, it shall not acquire any rights in respect of any trade names or Trade Marks and that all such rights and goodwill are, and shall remain, vested in the Manufacturer.
7.5   The Distributor shall, at the expense of the Manufacturer, take all such steps as the Manufacturer may reasonably require to assist the Manufacturer in maintaining the validity and enforceability of the Intellectual Property of the Manufacturer during the term of this agreement.
7.6   The Distributor shall at the request of the Manufacturer execute such licences in respect of the use of the Trade Marks in the Territory as the Manufacturer may reasonably require, provided that the provisions of any licences shall not be more onerous or restrictive than the provisions of this agreement.
7.7   Without prejudice to the right of the Distributor or any third party to challenge the validity of any Intellectual Property of the Manufacturer, the Distributor shall not do or authorise any third party to do any act which would or might invalidate or be inconsistent with any Intellectual Property of the Manufacturer and shall not omit or authorise any third party to omit to do any act which, by its omission, would have that effect or character.
7.8   The Distributor shall promptly and fully notify the Manufacturer of any actual, threatened or suspected infringement in the Territory of any Intellectual Property of the Manufacturer which comes to the Distributors notice, and of any claim by any third party so coming to its notice that the importation of the Products into the Territory, or their sale in the Territory, infringes any rights of any other person, and the Distributor shall at the request and expense of the Manufacturer do all such things as may be reasonably required to assist the Manufacturer in taking or resisting any proceedings in relation to any such infringement or claim.
8.   Confidentiality
8.1   Except as provided by clauses 8.2 and 8.3, the Distributor shall at all times during the continuance of this agreement and after its termination:
8.1.1   use its best endeavours to keep all Restricted Information confidential and accordingly not to disclose any Restricted Information to any other person; and
8.1.2   not use any Restricted Information for any purpose other than the performance of the obligations under this agreement.
8.2   Any Restricted Information may be disclosed by the Distributor to:
8.2.1   any customers or prospective customers;
8.2.2   any governmental or other authority or regulatory body; or
8.2.3   any employees of the Distributor or of any of the aforementioned persons,
to such extent only as is necessary for the purposes contemplated by this agreement, or as is required by law and subject in each case to the Distributor using its best endeavours to ensure that the person in question keeps the same confidential and does not use the same except for the purposes for which the disclosure is made.
8.3   Any Restricted Information may be used by the Distributor for any purpose, or disclosed by the Distributor to any other person, to the extent only that:
8.3.1   it is on the date of this agreement, or becomes, public knowledge through no fault of the Distributor (provided that in doing so the Distributor shall not disclose any Restricted Information which is not public knowledge); or
8.3.2   it can be shown by the Distributor, to the reasonable satisfaction of the Manufacturer, to have been known to it prior to its being disclosed by the Manufacturer to the Distributor.
9.   Warranties and liability
9.1   Subject as provided in this agreement the Manufacturer warrants to the Distributor that:
9.1.1   all Products supplied under this agreement will be of merchantable quality and will comply with any specification agreed for them; and
9.1.2   it is not aware of any rights of any third party in the Territory which would or might render the sale of the Products, or the use of any of the Trade Marks on or in relation to the Products, unlawful.
9.2   In the event of any breach of the Manufacturers warranty in clause 9.1.1 (whether by reason of defective materials, production faults or otherwise) the Manufacturers liability shall be limited to:
9.2.1   replacement of the Products in question; or
9.2.2   at the Manufacturers option, repayment of the price (where this has been paid).
9.3   Notwithstanding anything to the contrary in this agreement, the Manufacturer shall not, except in respect of death or personal injury caused by the negligence of the Manufacturer, be liable to the Distributor by reason of any representation or implied warranty, condition or other term or any duty at common law, or under the express terms of this agreement, for any consequential loss or damage (whether for loss of profit or otherwise and whether occasioned by the negligence of the Manufacturer or its employees or agents or otherwise) arising out of or in connection with any act or omission of the Manufacturer relating to the manufacture or supply of the Products, their resale by the Distributor or their use by any customer.
10.   Force majeure
10.1   If either party is affected by Force Majeure it shall forthwith notify the other party of the nature and extent thereof.
10.2   Neither party shall be deemed to be in breach of this agreement, or otherwise be liable to the other, by reason of any delay in performance, or nonperformance, of any of its obligations under this agreement to the extent that such delay or nonperformance is due to any Force Majeure of which it has notified the other party; and the time for performance of that obligation shall be extended accordingly.
10.3   If the Force Majeure in question prevails for a continuous period in excess of six months, the parties shall enter into bona fide discussions with a view to alleviating its effects, or to agreeing upon such alternative arrangements as may be fair and reasonable.
11.   Duration and termination
11.1   This agreement shall come into force on the date of this agreement and, subject as provided in clauses 11.2 and 11.3, shall continue in force for a period of [________] years and thereafter unless or until terminated by either party giving to the other not less than [________] months written notice expiring at or at any time after the end of that period.
11.2   The Manufacturer shall be entitled to terminate this agreement:
11.2.1   as provided in clause 2.6.2; or
11.2.2   by giving not less than 30 days written notice to the Distributor if:
(a)   there is at any time a material change in the management, ownership or control of the Distributor; or
(b)   the Distributor at any time challenges the validity of any Intellectual Property of the Manufacturer.
11.3   Either party shall be entitled forthwith to terminate this agreement by written notice to the other if:
11.3.1   that other party commits any breach of any of the provisions of this agreement and, in the case of a breach capable of remedy, fails to remedy the same within 30 days after receipt of a written notice giving full particulars of the breach and requiring it to be remedied;
11.3.2   an encumbrancer takes possession or a receiver is appointed over any of the property or assets of that other party;
11.3.3   that other party makes any voluntary arrangement with its creditors or becomes subject to an administration order;
11.3.4   that other party goes into liquidation (except for the purposes of amalgamation or reconstruction and in such manner that the company resulting therefrom effectively agrees to be bound by or assume the obligations imposed on that other party under this agreement);
11.3.5   anything which, under the law of any jurisdiction, is analogous to any of the acts or events specified in 11.3.2, 11.3.3 or 111.3.4;
11.3.6   that other party ceases, or threatens to cease, to carry on business; or
11.3.7   in the circumstances contemplated by clause 10.3 there is no agreement reached by the parties within 30 days after discussions for that purpose began or ought to have begun.
11.4   For the purposes of clause 11.3.1, a breach shall be considered capable of remedy if the party in breach can comply with the provision in question in all respects other than as to the time of performance (provided that time of performance is not of the essence).
11.5   Any waiver by either party of a breach of any provision of this agreement shall not be considered as a waiver of any subsequent breach of the same or any other provision of this agreement.
11.6   The rights to terminate this agreement given by this clause shall be without prejudice to any other right or remedy of either party in respect of the breach concerned (if any) or any other breach.
12.   Consequences of termination
12.1   Upon the termination of this agreement for any reason:
12.1.1   the Manufacturer shall be entitled (but not obliged) to repurchase from the Distributor all or part of any stocks of the Products then held by the Distributor at their Invoice Value or the value at which they stand in the books of the Distributor, whichever is lower; provided that:
(a)   the Manufacturer shall be responsible for arranging and for the cost of, transport and insurance; and
(b)   the Distributor may sell stocks for which it has accepted orders from customers prior to the date of termination, or in respect of which the Manufacturer does not, by written notice given to the Distributor within seven days after the date of termination exercise its right of repurchase, and for those purposes and to that extent the provisions of this agreement shall continue in full force and effect;
12.1.2   the Distributor shall at its own expense within 30 days send to the Manufacturer or otherwise dispose of in accordance with the directions of the Manufacturer all samples of the Products and any advertising, promotional or sales material relating to the Products then in the possession of the Distributor;
12.1.3   outstanding unpaid invoices rendered by the Manufacturer in respect of the Products shall become immediately payable by the Distributor and invoices in respect of Products ordered prior to termination but for which an invoice has not been submitted shall be payable immediately upon submission of the invoice;
12.1.4   the Distributor shall cease to promote, market or advertise the Products or to make any use of the Trade Marks other than for the purpose of selling stock in respect of which the seller does not exercise its right of repurchase;
12.1.5   the provisions of clauses 8 and 9 shall continue in force in accordance with their respective terms;
12.1.6   the Distributor shall have no claim against the Manufacturer for compensation for loss of distribution rights, loss of goodwill or any similar loss; and
12.1.7   subject as otherwise provided in this agreement and to any rights or obligations which have accrued prior to termination, neither party shall have any further obligation to the other under this agreement.
12.2   The provisions of clause 2.8.2 shall continue to apply for a period of six months after the date of termination.
13.   Nature of agreement
13.1   The Manufacturer shall be entitled to perform any of the obligations undertaken by it and to exercise any of the rights granted to it under this agreement through any other company which at the relevant time is its holding company or subsidiary (as defined by section 736 of the Companies Act 1985) or the subsidiary of any such holding company and any act or omission of any such company shall for the purposes of this agreement be deemed to be the act or omission of the Manufacturer.
13.2   The Manufacturer may assign this agreement and the rights and obligations under this agreement.
13.3   This agreement is personal to the Distributor, which may not without the written consent of the Manufacturer, assign, mortgage, charge (otherwise than by floating charge) or dispose of any of its rights, or subcontract or otherwise delegate any of its obligations under this agreement.
13.4   Subject as provided in clause 4.2, nothing in this agreement shall create, or be deemed to create, a partnership or the relationship of principal and agent or employer and employee between the parties.
13.5   This agreement contains the entire agreement between the parties with respect to the subject matter of this agreement, supersedes all previous agreements and understandings between the parties with respect to this agreement, and may not be modified except by an instrument in writing signed by the duly authorised representatives of the parties.
13.6   Each party acknowledges that, in entering into this agreement, it does not do so on the basis of, and does not rely on, any representation, warranty or other provision except as expressly provided in this agreement, and all conditions, warranties or other terms implied by statute or common law are hereby excluded to the fullest extent permitted by law.
13.7   If any provision of this agreement is held by any court or other competent authority to be void or unenforceable in whole or part, this agreement shall continue to be valid as to the other provisions thereof and the remainder of the affected provision.
14.   Arbitration and proper law
14.1   Any dispute arising out of or in connection with this agreement shall be referred to the arbitration in London of a single arbitrator appointed by agreement between the parties or, in default of agreement, nominated on the application of either party by the President for the time being of The Law Society.
14.2   This agreement shall be governed by and construed in all respects in accordance with the Laws of England, and each party hereby submits to the nonexclusive jurisdiction of the English Courts.
15.   Notices and service
15.1   Any notice or other information required or authorised by this agreement to be given by either party to the other may be given by hand or sent (by first class prepaid post, cable, facsimile transmission, e-mail or comparable means of communication) to the other party at the address referred to in clause 15.4.
15.2   Any notice or other information given by post under clause 15.1 which is not returned to the sender as undelivered shall be deemed to have been given on the second day after the envelope containing the same was so posted; and proof that the envelope containing any such notice or information was properly addressed, prepaid, registered and posted, and that it has not been so returned to the sender, shall be sufficient evidence that such notice or information has been duly given.
15.3   Any notice or other information sent by cable, facsimile transmission, e-mail or comparable means of communication shall be deemed to have been duly sent on the date of transmission, provided that a confirming copy is sent by first class prepaid post to the other party at the address referred to in clause [15.4] within 24 hours after transmission.
15.4   Service of any legal proceedings concerning or arising out of this agreement shall be effected by causing the same to be delivered to the Company Secretary of the party to be served at its principal place of business (in the case of the Manufacturer) or its registered office (in the case of the Distributor), or to such other address as may from time to time be notified in writing by the party concerned.
16.   Notification
16.1   As soon as practicable after the execution of this agreement the parties shall procure that this agreement is:
16.1.1   notified to the Commission of the European Communities in accordance with Regulation 17 of 1962 of the Council of the European Communities; and
16.1.2   notified to the Director General of Fair Trading under the Competition Act 1998;
and accordingly none of the provisions of this agreement other than this provision shall come into force, and none of the parties shall give effect to the provisions, until the day after both such steps have been taken.


SIGNED by                   )
on behalf of the MANUFACTURER   )




SIGNED by                   )
on behalf of the DISTRIBUTOR      )




SCHEDULE 1
Products


Number of Pages20
DimensionsDesigned for Letter Size (8.5" x 11")
EditableYes (.doc, .wpd and .rtf)
UsageUnlimited number of prints
Product number#32248
This is the content of the form and is provided for your convenience. It is not necessarily what the actual form looks like and does not include the information, instructions and other materials that come with the form you would purchase. An actual sample can also be viewed by clicking on the "Sample Form" near the top left of this page.












Distribution Agreement
(England and Wales)






This Packet Includes:
1.  General Information
2.  Instructions and Checklist
3.  Distribution Agreement





General Information
Distribution Agreement
In a distribution agreement, one party (the Distributor) buys goods from another (the Supplier) in order to resell them to its own customers. There is therefore a contract between the Supplier and the Distributor, the Distributor and its customers, but not the Supplier and the customers.
This Distribution Agreement sets out the terms of the relationship between the Distributor and the Supplier. The terms will cover such matters as the goods to be sold, price, payment, quality and delivery. The terms will also cover the type of advertising the Distributor can undertake and the training of it sales staff.
Unlike an agent, the Distributor will not receive commission for goods sold.  He will make his profits from the margin between the price he pays for the goods and the price at which he sells them. Note that the Supplier cannot tell the Distributor to sell the products at minimum price to its customers as that is price fixing.




Instructions and Checklist
Distribution Agreement

  Read the agreement carefully. Clear uncomplicated language has been used throughout and the terms will be self explanatory.

   Insert all requested information in the spaces provided on the form.  You will see throughout the agreement blank spaces or words contained within square brackets. These square brackets mean that this is an instruction to you and you will need to either fill in the missing information or delete or amend the wording as appropriate. Where you see the clause numbering within square brackets this means that you must check the clause numbering to ensure that the clause numbers referred to are still correct if you have changed or deleted any clauses of the agreement.  If you consider that there are clauses that are not appropriate for your agreement then please delete them.

     This form contains the basic terms and language that should be included in similar agreements.  

     Both parties must sign the agreement.

   Both parties should retain either an original or copy of the signed agreement.
   All legal documents should be kept in a safe location such as a fireproof safe or safe deposit box.  


Step-by-Step Instructions


Distribution Agreement

Recital A
The Distributor will need to set out the nature of the goods it manufacturers.
Clause 1
In the definition for Territory the Supplier will need to determine what area this will cover. The Distributor will have exclusive right to sell goods within this area so careful thought will need to be given to what this will be. If it is intended that the Supplier will appoint several distributors then he will need to ensure that each distributor has his own unique territory. An example of a Territory would be the area with the M25, The county of Essex or England.
In definition of Products it states that the products will be defined as those goods listed in schedule 1. The parties will therefore need to carefully list those goods which the Distributor will be authorised to sell.
Clause 2.6
This agreement provides for the Distributor to be the exclusive seller of the goods in the Territory. This can obviously only continue provided the Distributor is actually selling the goods and making more orders from the Manufacturer.  If the Distributor does not make the order targets as set out in this clause then either this exclusivity can end or the agreement can be terminated. The parties will need to insert the relevant invoice values.
Clause 6
This agreement provides for support and training to be given by the Manufacturer to the Distributor to assist in the marketing of the goods.  If this is not what is intended between the parties, this clause should be deleted.
Also note clause 6.3 which states that such support will be free of charge (other than expenses). Please amend if not appropriate.
Clause 11.1


The parties will need to determine when the agreement will come into effect. It will be either the date of the agreement or at some later date as stated by the parties. You will need to delete the appropriate wording in
the brackets. You will also need to determine how long the agreement will last and how many months notice the parties will require to terminate the agreement.


Clause 12.2
It is advised that the six month restriction provided for in the agreement is not increased beyond six months without taking explicit legal advice on this point.






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DISTRIBUTION AGREEMENT
Date:                                                             20
Parties:
(1)   “The Manufacturer”: [                                              ] a company incorporated in England under company number [________] whose registered office is at [                                                                                         ]
(2)   “The Distributor”: [                                              ] a company incorporated in England under company number [________] whose registered office is at [                                                                                         ].
Recitals:
(A)   The Manufacturer manufactures [________].
(B)   The Distributor has considerable marketing experience in the Territory and wishes to act as the Manufacturers distributor for the Products.
Operative provisions:
1.   Interpretation
1.1   In this agreement, unless the context otherwise requires:
“FORCE MAJEURE
means, in relation to either party, any circumstances beyond the reasonable control of that party (including, without limitation, any strike, lockout or other form of industrial action);
“INDEX FIGURE
means the monthly figure given by the Retail Prices Index;
“INTELLECTUAL PROPERTY
means any patent, copyright, registered design, trade mark or other industrial or intellectual property right subsisting in the Territory in respect of the Products, and applications for any of the foregoing;
“INVOICE VALUE
means the sums invoiced by the Manufacturer to the Distributor in respect of any Products, less any value added tax (or other taxes, duties or levies) and any amounts for transport or insurance included in the invoice;
“PRODUCTS
means, subject as provided in clause [3.2], such of the products listed in Schedule 1 as are at the date of this agreement in the range of products manufactured by or for the Manufacturer, and such other products as may from time to time be agreed in writing by the parties;
“RESTRICTED INFORMATION
means any information which is disclosed to the Distributor by the Manufacturer under or in connection with this Agreement (whether orally or in writing, and whether or not such information is expressly stated to be confidential or marked as such);
“RETAIL PRICES INDEX
means the General Index of Retail Prices which is published monthly in the United Kingdom by the Office for National Statistics, or, if this ceases to be published, such other index as more closely resembles that index;
“TERRITORY
means [________];
“TRADE MARKS
means all Intellectual Property and trade marks (registered and unregistered) used by the Manufacturer on or in relation to the Products at any time during this agreement;
“YEAR OF THIS AGREEMENT
means the period of 12 months from the date of this agreement and each subsequent consecutive period of 12 months during the period of this Agreement.
1.2   Any reference in this Agreement to “writing” or related expressions includes a reference to cable, facsimile transmission, e-mail or comparable means of communication.

1.3   Any reference in this Agreement to any provision of a statute shall be construed as a reference to that provision as amended, reenacted or extended at the relevant time.
1.4   The headings in this Agreement are for convenience only and shall not affect its interpretation.
2.   Appointment of distributor
2.1   The Manufacturer hereby appoints the Distributor as its distributor for the resale of the Products in the Territory, and the Distributor agrees to act in that capacity, subject to the terms of this agreement.
2.2   Subject as provided in clause 2.6, the Manufacturer shall not:
2.2.1   appoint any other person, firm or company in the Territory as a distributor or agent for the Products in the Territory; or
2.2.2   supply to any other person, firm or company in the Territory any of the Products, whether for use or resale.
2.3   The Distributor shall be entitled to describe itself as the Manufacturers “Authorised Distributor” for the Products, but shall not hold itself out as the Manufacturers agent for sales of the Products or as being entitled to bind the Manufacturer in any way.
2.4   The Distributor shall not sell any of the Products that it purchases from the Manufacturer through a sales agent or to a subdistributor without the express written permission of the Manufacturer.
2.5   Nothing in this agreement shall entitle the Distributor to:
2.5.1   any priority of supply in relation to the Products as against the Manufacturers other distributors or customers; or
2.5.2   any right or remedy against the Manufacturer if any of the Products are sold in the Territory by any person, firm or company outside the Territory other than the Manufacturer.
2.6   If in any Year of this Agreement the aggregate Invoice Value of the Products ordered by the Distributor from the Manufacturer falls short of the aggregate Invoice Value shown opposite that Year of this Agreement in column (2) of the table below, as adjusted for that Year of this Agreement pursuant to clause 2.7:
(1)
(2)
Year
Aggregate Invoice value
1
[________]
2
[________]
3
[________]
4
[________]
5 and each year thereafter
[________]
then, unless the Distributor pays a sum equal to the shortfall to the Manufacturer within [________] days after the end of that Year of this Agreement, the Manufacturer shall be entitled, by giving not less than [________] months written notice to the Distributor within [________] months after the end of that Year of this Agreement, to:
2.6.1   terminate the restrictions on the Manufacturer specified in clause 2.2; or
2.6.2   terminate this agreement.
2.7   The figures in column (2) of the table in clause 2.6 shall be reviewed with effect from the first day of each Year of this Agreement (other than the first) and if upon the review the Index Figure last published before that date shows an increase or decrease in relation to the Index Figure last published before the date of this agreement, the figures in column (2) shall for that Year of this Agreement be increased or decreased (as the case may be) in the same proportion.
2.8   The Distributor shall not:
2.8.1   obtain the Products (or any goods which compete with the Products) for resale from any person, firm or company other than the Manufacturer;
2.8.2   be concerned or interested, either directly or indirectly, in the manufacture or distribution in the Territory of any goods which compete with the Products;
2.8.3   seek customers, establish any branch or maintain any distribution depot for the Products in any country which is outside the Territory but within the European Economic Area; or
2.8.4   sell the Products to any customer in any country which is:
(a)   outside the Territory and outside the European Economic Area; or
(b)   within the Territory if to the knowledge of the Distributor that customer intends to resell the Products in any country which is outside the Territory and outside the European Economic Area.
3.   Supply of the products
3.1   Subject as provided in clauses 2.5.1 and 3.2, the Manufacturer shall use its reasonable endeavours to supply the Products to the Distributor in accordance with the Distributors orders.
3.2   The Manufacturer shall not be under any obligation to continue the manufacture of all or any of the Products, and shall be entitled to make such alterations to the specifications of the Products as it may think fit.
3.3   Each order for the Products shall constitute a separate contract, and any default by the Manufacturer in relation to any one order shall not entitle the Distributor to treat this agreement as terminated.
3.4   The Distributor shall, in respect of each order for the Products to be supplied under this agreement, be responsible for:
3.4.1   ensuring the accuracy of the order;
3.4.2   providing the Manufacturer with any information which is necessary in order to enable the Manufacturer to fulfil the order and to comply with all labelling, marketing and other applicable legal requirements in the Territory; and
3.4.3   obtaining any necessary import licences, certificates of origin or other requisite documents, and paying all applicable customs, duties and taxes in respect of the importation of the Products into the Territory and their resale in the Territory.
3.5   The Distributor shall give the Manufacturer not less than [________] months written notice of its estimated requirements of the Products for each month, and shall promptly notify the Manufacturer of any changes in circumstances which may affect its requirements.
3.6   Upon receipt and confirmation of each order the Manufacturer shall as soon as is practicable inform the Distributor of the Manufacturers estimated delivery date for the consignment. The Manufacturer shall use all reasonable endeavours to meet the delivery date, but time of delivery shall not be of the essence and accordingly the Manufacturer shall have no liability to the Distributor if, notwithstanding such endeavours, there is any delay in delivery.
3.7   The title to any consignment of the Products shall not pass to the Distributor until the Manufacturer has received payment in full of the price therefor.
3.8   Risk of loss of or damage to any consignment of the Products shall pass to the Distributor from the time the Manufacturer notifies the Distributor that the Products are available for collection or from the time of delivery to the carrier at the Manufacturers premises, whichever is earlier.
3.9   The standard conditions of sale of the Manufacturer from time to time (a copy of the current form of which has been supplied to the Distributor prior to the date of this agreement) shall apply to all sales of the Products to the Distributor pursuant to this agreement, except to the extent that any of the same is inconsistent with any of the provisions of this agreement, in which case the latter shall prevail. The Manufacturer shall give to the Distributor notice in writing of any change in such standard conditions of sale not less than one month prior to such change taking effect for the purposes of this agreement.
4.   Payment for the products
4.1   All Products to be supplied by the Manufacturer under this Agreement shall be sold on an ex works basis, and accordingly the Distributor shall, in addition to the price, be liable for arranging and paying all costs of transport and insurance.
4.2   Where the Manufacturer agrees to arrange for transport and insurance as agent for the Distributor, the Distributor shall reimburse to the Manufacturer the full costs thereof and all the applicable provisions of this agreement shall apply with respect to the payment of such costs as they apply to payment of the price of the Products.
4.3   The prices for all Products to be supplied under this Agreement shall be the Manufacturers ex works list prices from time to time (inclusive of packaging costs) less [________] per cent and accordingly the Manufacturer shall:
4.3.1   supply to the Distributor up to date copies of all price lists for the Products from time to time; and
4.3.2   give the Distributor not less than [________] months notice in writing of any alteration in such list prices, and the prices as so altered shall apply to all Products delivered on and after the applicable date of the increase, including outstanding orders.
4.4   A deposit of [________] per cent of the relevant list price for each order shall be payable by the Distributor at the time of placing the order, and the balance of the price shall be invoiced for payment on delivery.
4.5   If the Distributor fails to pay the price for any Products within [________] days after the date of the invoice therefor, the Manufacturer shall be entitled (without prejudice to any other right or remedy it may have) to:
4.5.1   cancel or suspend any further delivery to the Distributor under any order;
4.5.2   sell or otherwise dispose of any Products which are the subject of any order by the Distributor, whether or not appropriated thereto, and apply the proceeds of sale to the overdue payment; and
4.5.3   charge the Distributor interest on the price at the rate of [________] per cent per annum above Barclays Bank PLC base rate in force from time to time from the date the payment became due until actual payment is made (irrespective of whether the date of payment is before or after any judgment or award in respect of the same).
4.6   All prices for the Products are exclusive of any applicable value added or any other sales tax, for which the Distributor shall be additionally liable.
4.7   All payments shall be made by the Distributor in sterling by transfer to such bank account as the Manufacturer may from time to time notify in writing to the Distributor.
5.   Marketing of the products
5.1   The Distributor shall use its reasonable endeavours to promote the sale of the Products throughout the Territory and, subject to compliance by the Manufacturer of its obligations under clause [3.1], to satisfy market demand therefor.
5.2   The Distributor shall be entitled, subject as provided in this agreement, to promote and market the Products in the Territory in such manner as it may think fit, and in particular shall be entitled to resell the Products to its customers at such prices as it may determine.
5.3   The Distributor shall maintain such stocks of the Products as may be necessary to meet its customers requirements.
5.4   In connection with the promotion and marketing of the Products the Distributor shall:
5.4.1   make clear, in all dealings with customers and prospective customers, that it is acting as distributor of the Products and not as agent of the Manufacturer;
5.4.2   provide to the Manufacturer copies of its up to date price lists;
5.4.3   provide the Manufacturer on a monthly basis with a report, in such form as the Manufacturer may reasonably require, of sales of the Products which it has made in the preceding month and containing such other information as the Manufacturer may reasonably require;
5.4.4   from time to time consult with the Manufacturers representatives for the purpose of assessing the state of the market in the Territory and permit them to inspect any premises or documents used by the Distributor in connection with the sale of the Products;
5.4.5   at the request of the Manufacturer provide to it copies of such sales aids, including (without limiting the foregoing) catalogues, sales brochures and sales manuals, as relate to the Products;
5.4.6   use in relation to the Products only such advertising, promotional and selling materials as are approved in writing by the Manufacturer;
5.4.7   maintain an active and, subject to implementation of clause 6.2, suitably trained sales force;
5.4.8   spend not less than £[________] on advertising the Products in the Territory during each Year of this Agreement; and
5.4.9   provide an after sales service for customers in relation to the Products to the Manufacturers reasonable satisfaction.
6.   Support and training
6.1   The Manufacturer shall from time to time provide the Distributor with such samples, catalogues, brochures and up to date information concerning the Products as the Manufacturer may consider appropriate or as the Distributor may reasonably require in order to assist the Distributor with the sale of the Products in the Territory, and the Manufacturer shall endeavour to answer as soon as practicable any technical enquiries concerning the Products which are made by the Distributor or its customers.
6.2   During the first Year of this Agreement:
6.2.1   the Manufacturer shall make available to the Distributor (at such time as may be agreed and for a period not exceeding [________] working days) the services of a suitably qualified employee of the Manufacturer to assist the Distributor in the marketing of the Products; and
6.2.2   the Distributor shall be entitled to send to the Manufacturers premises (at such time as may be agreed and for a period not exceeding [________] working days) up to [________] suitably qualified employees of the Distributor for training by the Manufacturer in matters relating to the Products and their marketing.
6.3   The services to be provided by the Manufacturer under clauses 6.1 and 6.2 shall be free of charge, but the Distributor shall:
6.3.1   reimburse to the Manufacturer all travelling, accommodation and other expenses reasonably incurred by any employees of the Manufacturer in providing such services; and
6.3.2   remain liable for all salaries and other employment costs of, and all travelling, accommodation and other expenses incurred by, employees of the Distributor who are sent to the Manufacturers premises.
7.   Intellectual property
7.1   The Manufacturer authorises the Distributor to use the Trade Marks in the Territory on or in relation to the Products for the purposes only of exercising its rights and performing its obligations under this Agreement and, subject as provided in clause 2.6, the Manufacturer shall not so authorise any other person, firm or company.
7.2   The Distributor shall ensure that each reference to and use of any of the Trade Marks by the Distributor is in a manner from time to time approved by the Manufacturer and accompanied by an acknowledgement, in a form approved by the Manufacturer, that the same is a trade mark (or registered trade mark) of the Manufacturer.
7.3   The Distributor shall not:
7.3.1   make any modifications to the Products or their packaging;
7.3.2   alter, remove or tamper with any Trade Marks, numbers, or other means of identification used on or in relation to the Products;
7.3.3   use any of the Trade Marks in any way which might prejudice their distinctiveness or validity or the goodwill of the Manufacturer therein;
7.3.4   use in relation to the Products any trade marks other than the Trade Marks without obtaining the prior written consent of the Manufacturer; or
7.3.5   use in the Territory any trade marks or trade names so resembling any trade mark or trade names of the Manufacturer as to be likely to cause confusion or deception.
7.4   Except as provided in clause 7.1 the Distributor shall have no rights in respect of any trade names or Trade Marks used by the Manufacturer in relation to the Products or of the goodwill associated therewith, and the Distributor hereby acknowledges that, except as expressly provided in this agreement, it shall not acquire any rights in respect of any trade names or Trade Marks and that all such rights and goodwill are, and shall remain, vested in the Manufacturer.
7.5   The Distributor shall, at the expense of the Manufacturer, take all such steps as the Manufacturer may reasonably require to assist the Manufacturer in maintaining the validity and enforceability of the Intellectual Property of the Manufacturer during the term of this agreement.
7.6   The Distributor shall at the request of the Manufacturer execute such licences in respect of the use of the Trade Marks in the Territory as the Manufacturer may reasonably require, provided that the provisions of any licences shall not be more onerous or restrictive than the provisions of this agreement.
7.7   Without prejudice to the right of the Distributor or any third party to challenge the validity of any Intellectual Property of the Manufacturer, the Distributor shall not do or authorise any third party to do any act which would or might invalidate or be inconsistent with any Intellectual Property of the Manufacturer and shall not omit or authorise any third party to omit to do any act which, by its omission, would have that effect or character.
7.8   The Distributor shall promptly and fully notify the Manufacturer of any actual, threatened or suspected infringement in the Territory of any Intellectual Property of the Manufacturer which comes to the Distributors notice, and of any claim by any third party so coming to its notice that the importation of the Products into the Territory, or their sale in the Territory, infringes any rights of any other person, and the Distributor shall at the request and expense of the Manufacturer do all such things as may be reasonably required to assist the Manufacturer in taking or resisting any proceedings in relation to any such infringement or claim.
8.   Confidentiality
8.1   Except as provided by clauses 8.2 and 8.3, the Distributor shall at all times during the continuance of this agreement and after its termination:
8.1.1   use its best endeavours to keep all Restricted Information confidential and accordingly not to disclose any Restricted Information to any other person; and
8.1.2   not use any Restricted Information for any purpose other than the performance of the obligations under this agreement.
8.2   Any Restricted Information may be disclosed by the Distributor to:
8.2.1   any customers or prospective customers;
8.2.2   any governmental or other authority or regulatory body; or
8.2.3   any employees of the Distributor or of any of the aforementioned persons,
to such extent only as is necessary for the purposes contemplated by this agreement, or as is required by law and subject in each case to the Distributor using its best endeavours to ensure that the person in question keeps the same confidential and does not use the same except for the purposes for which the disclosure is made.
8.3   Any Restricted Information may be used by the Distributor for any purpose, or disclosed by the Distributor to any other person, to the extent only that:
8.3.1   it is on the date of this agreement, or becomes, public knowledge through no fault of the Distributor (provided that in doing so the Distributor shall not disclose any Restricted Information which is not public knowledge); or
8.3.2   it can be shown by the Distributor, to the reasonable satisfaction of the Manufacturer, to have been known to it prior to its being disclosed by the Manufacturer to the Distributor.
9.   Warranties and liability
9.1   Subject as provided in this agreement the Manufacturer warrants to the Distributor that:
9.1.1   all Products supplied under this agreement will be of merchantable quality and will comply with any specification agreed for them; and
9.1.2   it is not aware of any rights of any third party in the Territory which would or might render the sale of the Products, or the use of any of the Trade Marks on or in relation to the Products, unlawful.
9.2   In the event of any breach of the Manufacturers warranty in clause 9.1.1 (whether by reason of defective materials, production faults or otherwise) the Manufacturers liability shall be limited to:
9.2.1   replacement of the Products in question; or
9.2.2   at the Manufacturers option, repayment of the price (where this has been paid).
9.3   Notwithstanding anything to the contrary in this agreement, the Manufacturer shall not, except in respect of death or personal injury caused by the negligence of the Manufacturer, be liable to the Distributor by reason of any representation or implied warranty, condition or other term or any duty at common law, or under the express terms of this agreement, for any consequential loss or damage (whether for loss of profit or otherwise and whether occasioned by the negligence of the Manufacturer or its employees or agents or otherwise) arising out of or in connection with any act or omission of the Manufacturer relating to the manufacture or supply of the Products, their resale by the Distributor or their use by any customer.
10.   Force majeure
10.1   If either party is affected by Force Majeure it shall forthwith notify the other party of the nature and extent thereof.
10.2   Neither party shall be deemed to be in breach of this agreement, or otherwise be liable to the other, by reason of any delay in performance, or nonperformance, of any of its obligations under this agreement to the extent that such delay or nonperformance is due to any Force Majeure of which it has notified the other party; and the time for performance of that obligation shall be extended accordingly.
10.3   If the Force Majeure in question prevails for a continuous period in excess of six months, the parties shall enter into bona fide discussions with a view to alleviating its effects, or to agreeing upon such alternative arrangements as may be fair and reasonable.
11.   Duration and termination
11.1   This agreement shall come into force on the date of this agreement and, subject as provided in clauses 11.2 and 11.3, shall continue in force for a period of [________] years and thereafter unless or until terminated by either party giving to the other not less than [________] months written notice expiring at or at any time after the end of that period.
11.2   The Manufacturer shall be entitled to terminate this agreement:
11.2.1   as provided in clause 2.6.2; or
11.2.2   by giving not less than 30 days written notice to the Distributor if:
(a)   there is at any time a material change in the management, ownership or control of the Distributor; or
(b)   the Distributor at any time challenges the validity of any Intellectual Property of the Manufacturer.
11.3   Either party shall be entitled forthwith to terminate this agreement by written notice to the other if:
11.3.1   that other party commits any breach of any of the provisions of this agreement and, in the case of a breach capable of remedy, fails to remedy the same within 30 days after receipt of a written notice giving full particulars of the breach and requiring it to be remedied;
11.3.2   an encumbrancer takes possession or a receiver is appointed over any of the property or assets of that other party;
11.3.3   that other party makes any voluntary arrangement with its creditors or becomes subject to an administration order;
11.3.4   that other party goes into liquidation (except for the purposes of amalgamation or reconstruction and in such manner that the company resulting therefrom effectively agrees to be bound by or assume the obligations imposed on that other party under this agreement);
11.3.5   anything which, under the law of any jurisdiction, is analogous to any of the acts or events specified in 11.3.2, 11.3.3 or 111.3.4;
11.3.6   that other party ceases, or threatens to cease, to carry on business; or
11.3.7   in the circumstances contemplated by clause 10.3 there is no agreement reached by the parties within 30 days after discussions for that purpose began or ought to have begun.
11.4   For the purposes of clause 11.3.1, a breach shall be considered capable of remedy if the party in breach can comply with the provision in question in all respects other than as to the time of performance (provided that time of performance is not of the essence).
11.5   Any waiver by either party of a breach of any provision of this agreement shall not be considered as a waiver of any subsequent breach of the same or any other provision of this agreement.
11.6   The rights to terminate this agreement given by this clause shall be without prejudice to any other right or remedy of either party in respect of the breach concerned (if any) or any other breach.
12.   Consequences of termination
12.1   Upon the termination of this agreement for any reason:
12.1.1   the Manufacturer shall be entitled (but not obliged) to repurchase from the Distributor all or part of any stocks of the Products then held by the Distributor at their Invoice Value or the value at which they stand in the books of the Distributor, whichever is lower; provided that:
(a)   the Manufacturer shall be responsible for arranging and for the cost of, transport and insurance; and
(b)   the Distributor may sell stocks for which it has accepted orders from customers prior to the date of termination, or in respect of which the Manufacturer does not, by written notice given to the Distributor within seven days after the date of termination exercise its right of repurchase, and for those purposes and to that extent the provisions of this agreement shall continue in full force and effect;
12.1.2   the Distributor shall at its own expense within 30 days send to the Manufacturer or otherwise dispose of in accordance with the directions of the Manufacturer all samples of the Products and any advertising, promotional or sales material relating to the Products then in the possession of the Distributor;
12.1.3   outstanding unpaid invoices rendered by the Manufacturer in respect of the Products shall become immediately payable by the Distributor and invoices in respect of Products ordered prior to termination but for which an invoice has not been submitted shall be payable immediately upon submission of the invoice;
12.1.4   the Distributor shall cease to promote, market or advertise the Products or to make any use of the Trade Marks other than for the purpose of selling stock in respect of which the seller does not exercise its right of repurchase;
12.1.5   the provisions of clauses 8 and 9 shall continue in force in accordance with their respective terms;
12.1.6   the Distributor shall have no claim against the Manufacturer for compensation for loss of distribution rights, loss of goodwill or any similar loss; and
12.1.7   subject as otherwise provided in this agreement and to any rights or obligations which have accrued prior to termination, neither party shall have any further obligation to the other under this agreement.
12.2   The provisions of clause 2.8.2 shall continue to apply for a period of six months after the date of termination.
13.   Nature of agreement
13.1   The Manufacturer shall be entitled to perform any of the obligations undertaken by it and to exercise any of the rights granted to it under this agreement through any other company which at the relevant time is its holding company or subsidiary (as defined by section 736 of the Companies Act 1985) or the subsidiary of any such holding company and any act or omission of any such company shall for the purposes of this agreement be deemed to be the act or omission of the Manufacturer.
13.2   The Manufacturer may assign this agreement and the rights and obligations under this agreement.
13.3   This agreement is personal to the Distributor, which may not without the written consent of the Manufacturer, assign, mortgage, charge (otherwise than by floating charge) or dispose of any of its rights, or subcontract or otherwise delegate any of its obligations under this agreement.
13.4   Subject as provided in clause 4.2, nothing in this agreement shall create, or be deemed to create, a partnership or the relationship of principal and agent or employer and employee between the parties.
13.5   This agreement contains the entire agreement between the parties with respect to the subject matter of this agreement, supersedes all previous agreements and understandings between the parties with respect to this agreement, and may not be modified except by an instrument in writing signed by the duly authorised representatives of the parties.
13.6   Each party acknowledges that, in entering into this agreement, it does not do so on the basis of, and does not rely on, any representation, warranty or other provision except as expressly provided in this agreement, and all conditions, warranties or other terms implied by statute or common law are hereby excluded to the fullest extent permitted by law.
13.7   If any provision of this agreement is held by any court or other competent authority to be void or unenforceable in whole or part, this agreement shall continue to be valid as to the other provisions thereof and the remainder of the affected provision.
14.   Arbitration and proper law
14.1   Any dispute arising out of or in connection with this agreement shall be referred to the arbitration in London of a single arbitrator appointed by agreement between the parties or, in default of agreement, nominated on the application of either party by the President for the time being of The Law Society.
14.2   This agreement shall be governed by and construed in all respects in accordance with the Laws of England, and each party hereby submits to the nonexclusive jurisdiction of the English Courts.
15.   Notices and service
15.1   Any notice or other information required or authorised by this agreement to be given by either party to the other may be given by hand or sent (by first class prepaid post, cable, facsimile transmission, e-mail or comparable means of communication) to the other party at the address referred to in clause 15.4.
15.2   Any notice or other information given by post under clause 15.1 which is not returned to the sender as undelivered shall be deemed to have been given on the second day after the envelope containing the same was so posted; and proof that the envelope containing any such notice or information was properly addressed, prepaid, registered and posted, and that it has not been so returned to the sender, shall be sufficient evidence that such notice or information has been duly given.
15.3   Any notice or other information sent by cable, facsimile transmission, e-mail or comparable means of communication shall be deemed to have been duly sent on the date of transmission, provided that a confirming copy is sent by first class prepaid post to the other party at the address referred to in clause [15.4] within 24 hours after transmission.
15.4   Service of any legal proceedings concerning or arising out of this agreement shall be effected by causing the same to be delivered to the Company Secretary of the party to be served at its principal place of business (in the case of the Manufacturer) or its registered office (in the case of the Distributor), or to such other address as may from time to time be notified in writing by the party concerned.
16.   Notification
16.1   As soon as practicable after the execution of this agreement the parties shall procure that this agreement is:
16.1.1   notified to the Commission of the European Communities in accordance with Regulation 17 of 1962 of the Council of the European Communities; and
16.1.2   notified to the Director General of Fair Trading under the Competition Act 1998;
and accordingly none of the provisions of this agreement other than this provision shall come into force, and none of the parties shall give effect to the provisions, until the day after both such steps have been taken.


SIGNED by                   )
on behalf of the MANUFACTURER   )




SIGNED by                   )
on behalf of the DISTRIBUTOR      )




SCHEDULE 1
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