Supplier-Friendly Distribution Agreement Template
DISTRIBUTION AGREEMENT
This Distribution Agreement (the "Agreement") is made and entered into as of [Effective Date] (the "Effective Date")
BY AND BETWEEN:
[Supplier Full Legal Name], a company duly incorporated and existing under the laws of [Country of Incorporation], having its registered office at [Registered Address], registered under number [Registration Number], represented herein by [Name of Representative], acting in the capacity of [Title] duly authorised for the purposes hereof (hereinafter referred to as the "Supplier");
AND
[Distributor Full Legal Name], a sole trader of full legal capacity, holding registration number [Registration Number] and residing at [Address] (hereinafter referred to as the "Distributor");
The Supplier and the Distributor are hereinafter referred to individually as a "Party" and collectively as the "Parties".
RECITALS:
WHEREAS, the Supplier is engaged in the manufacture, assembly, importation and/or supply of the Products (as hereinafter defined) and holds all rights necessary to market and distribute the same;
WHEREAS, the Distributor represents that it possesses the requisite experience, infrastructure, personnel, financial standing and commercial relationships to promote, market and resell the Products within the Territory (as hereinafter defined);
WHEREAS, the Distributor has solicited and the Supplier has agreed to grant to the Distributor a non-exclusive right to purchase and resell the Products within the Territory, subject to and in accordance with the terms and conditions set out herein;
NOW, THEREFORE, in consideration of the mutual covenants, representations and warranties contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows.
Definitions and Interpretation
In this Agreement, unless the context otherwise requires, the following terms shall bear the meanings ascribed to them hereunder.
"Products" shall mean the goods, articles and items manufactured, assembled, imported or supplied by the Supplier and set forth in the Supplier's then-current product catalogue or price list communicated to the Distributor from time to time, as the same may be amended, supplemented, modified, extended or discontinued by the Supplier at its sole discretion in accordance with the provisions of this Agreement.
"Territory" shall mean the geographical area comprising [Territory / Country or Region], within which the Distributor is authorised to promote, market and resell the Products on a non-exclusive basis pursuant to the terms hereof, excluding any area, country, district or customer group expressly reserved or carved out by the Supplier in writing.
"Brand" shall mean any and all trademarks, trade names, service marks, logos, domain names, trade dress, get-up, insignia and other distinctive signs owned, licensed or used by the Supplier in relation to the Products, whether or not registered, together with all goodwill associated therewith.
"Confidential Information" shall mean any and all information of a confidential or proprietary nature disclosed by one Party to the other, whether in oral, written, electronic or any other form, which is identified as confidential or which, by its nature or the circumstances of its disclosure, ought reasonably to be regarded as confidential.
"Business Day" shall mean any day other than a Saturday, Sunday or public holiday on which commercial banks are generally open for business in the principal place of business of the Supplier.
The headings and sub-headings used in this Agreement are inserted for convenience of reference only and shall not affect the construction or interpretation of any provision hereof. References to clauses are references to clauses of this Agreement. Words importing the singular shall include the plural and vice versa, and words importing any gender shall include all other genders. The expressions "including", "in particular" and "such as" shall be construed as being without limitation.
Any reference to a statute, regulation or other instrument of law shall be construed as a reference to such statute, regulation or instrument as amended, re-enacted or consolidated from time to time. Any reference to writing shall include transmission by electronic mail save where otherwise expressly provided.
In the event of any inconsistency or conflict between any provisions of this Agreement, the provisions appearing in the body of this Agreement shall prevail, and the Parties shall endeavour to construe the conflicting provisions so as to give effect to the commercial intent hereof.
Appointment and Territory
Subject to and in accordance with the terms and conditions of this Agreement, the Supplier hereby appoints the Distributor, and the Distributor hereby accepts the appointment, as a non-exclusive distributor of the Products within the Territory, for the purpose of purchasing the Products from the Supplier and reselling the same to customers located within the Territory.
The appointment granted hereunder is expressly non-exclusive. The Supplier reserves the unrestricted right, at any time and from time to time, to (i) appoint any other distributors, dealers, agents, representatives, resellers or sales channels (whether exclusive, non-exclusive or sole) within the Territory, (ii) itself promote, market, sell, supply and distribute the Products, directly or indirectly, within the Territory, including to end-users, and (iii) establish subsidiaries, branches, offices or online sales platforms within the Territory, without any obligation to compensate the Distributor in respect thereof.
The Distributor shall not, directly or indirectly, actively solicit customers, establish branches or maintain any distribution depot outside the Territory, nor shall it accept orders from, or sell or deliver the Products to, any person whom the Distributor knows or ought reasonably to know intends to resell or re-export the Products outside the Territory, without the prior written consent of the Supplier.
The Distributor shall purchase the Products from the Supplier in its own name, for its own account and at its own risk, and shall resell the Products to its customers as an independent contractor. Nothing in this Agreement shall be construed as creating any relationship of agency, employment, partnership, joint venture or franchise between the Parties, and the Distributor shall have no authority to make any representation, warranty, commitment or undertaking on behalf of the Supplier or in its name.
The Supplier may, upon written notice to the Distributor, modify the scope of the Territory, including by removing specific countries, regions, customer categories, key accounts or sales channels (such as online marketplaces or governmental procurement), and such modification shall take effect as of the date specified in the notice without entitling the Distributor to any indemnity or compensation.
The Distributor acknowledges and agrees that the appointment granted hereunder is personal to it and may not be assigned, sub-contracted, delegated or otherwise transferred, in whole or in part, to any third party, including by way of appointment of sub-distributors or sub-agents, without the prior written consent of the Supplier, which consent may be withheld in the Supplier's sole and absolute discretion.
Minimum Purchase Obligations
During each contract year of the Term, the Distributor shall purchase from the Supplier a minimum quantity or minimum value of Products as set forth hereunder (the "Minimum Purchase Obligation"). For the initial contract year, the Minimum Purchase Obligation shall amount to [Amount] [Currency] or [Quantity] units of Products, as applicable, and for each subsequent contract year the Minimum Purchase Obligation shall be as notified in writing by the Supplier to the Distributor at least [number] days prior to the commencement of the relevant contract year.
For the purposes of this Clause, purchases shall be deemed to be made on the date on which the Supplier receives cleared payment in full in respect of the relevant order, and only Products actually paid for and not subsequently returned, cancelled or rejected shall be counted towards the Minimum Purchase Obligation.
The Distributor acknowledges that the Minimum Purchase Obligation constitutes an essential and material undertaking of the Distributor hereunder, upon which the Supplier has materially relied in entering into this Agreement.
In the event that the Distributor fails to meet the Minimum Purchase Obligation in respect of any contract year, the Supplier shall be entitled, at its sole and absolute discretion and without prejudice to any other rights or remedies available to it, to (i) terminate this Agreement in whole or in part forthwith by written notice to the Distributor, (ii) convert the appointment into one restricted to a reduced Territory, product range or customer base, (iii) invoice and recover from the Distributor a sum equal to the gross margin that would have been realised by the Supplier had the shortfall been purchased, or (iv) adjust pricing, discounts or payment terms applicable to the Distributor going forward.
The Minimum Purchase Obligation shall not be reduced, suspended or waived by reason of any adverse market conditions, competition, changes in demand, regulatory developments or any other circumstances affecting the Distributor's business, save in the case of a Force Majeure Event duly notified and continuing for not less than [number] consecutive days.
The Supplier shall be entitled to revise the Minimum Purchase Obligation upwards for each successive contract year to reflect market growth, inflation, the introduction of new Products and the historical performance of the Distributor, and such revised Minimum Purchase Obligation shall become binding upon the Distributor unless the Distributor terminates this Agreement by written notice served within [number] days of receipt of the revision notice.
Products and Modifications
The Products subject to distribution hereunder shall be those identified in the Supplier's current product catalogue, price list or product data sheets, as made available to the Distributor from time to time, each of which forms an integral part of the commercial arrangements between the Parties.
The Supplier reserves the right, at its sole and absolute discretion and without prior consultation with the Distributor, to (i) modify, alter, improve or redesign any Product, its specifications, formulation, components, packaging, labelling or presentation, (ii) add new products to or discontinue existing Products from the range offered to the Distributor, and (iii) substitute any Product with another product of equivalent or superior functionality, without any such action giving rise to any claim, indemnity or compensation in favour of the Distributor.
The Supplier shall use reasonable endeavours to notify the Distributor of any material modification or discontinuation of a Product with reasonable advance notice, provided that failure to provide such notice shall not constitute a breach of this Agreement nor entitle the Distributor to any remedy.
The Distributor shall not, under any circumstances, alter, modify, repackage, relabel, dismantle, decompile, reverse-engineer or otherwise interfere with the Products or their packaging, markings, instructions or accompanying documentation, nor affix any additional trademark, trade name or sign thereto, without the prior written consent of the Supplier.
The Distributor shall market, offer and resell the Products solely under the Brand and in the condition in which they are delivered by the Supplier, and shall not combine, bundle, incorporate or integrate the Products with any other goods or services in a manner that is reasonably likely to impair the reputation, quality or integrity of the Products or the Brand.
Where the Supplier discontinues any Product, the Supplier shall be under no obligation to repurchase, exchange, credit or compensate the Distributor in respect of any unsold stock of such Product held by the Distributor, provided that the Distributor shall be entitled, during a period not exceeding [number] days following the notice of discontinuation, to continue to resell such stock on the terms and conditions of this Agreement.
Orders and Delivery
All orders for Products shall be placed by the Distributor in writing (including by electronic mail or through such ordering system as the Supplier may designate), specifying the type, quantity, delivery address and requested delivery date of the Products ordered. No order shall be binding upon the Supplier until expressly accepted by the Supplier in writing.
The Supplier reserves the right, at its sole and absolute discretion, to accept, reject, partially fill or defer any order placed by the Distributor, without liability of any kind, including by reason of unavailability of stock, credit considerations, order volume thresholds, or any outstanding indebtedness of the Distributor.
Unless otherwise expressly agreed in writing by the Parties in respect of a specific order, all deliveries shall be made [Incoterm, e.g., Ex Works (EXW)] the Supplier's premises at [Address] (Incoterms in force at the date of the relevant order). Title to and risk of loss or damage in the Products shall pass to the Distributor in accordance with such Incoterm, save that title shall in no event pass before the Supplier has received full and cleared payment of the price for the Products concerned, together with any other sums then owing by the Distributor to the Supplier.
Any delivery dates indicated by the Supplier are given in good faith as estimates only, and time shall not be of the essence in respect of delivery. The Supplier shall not be liable for any delay in delivery howsoever caused, and no delay shall entitle the Distributor to refuse acceptance of the Products, terminate any order or this Agreement, or claim damages, indemnity or compensation of any kind.
The Distributor shall inspect each delivery of Products promptly upon receipt and shall notify the Supplier in writing of any claim for shortage, visible damage or non-conformity within [number] Business Days of delivery, failing which the Products shall be deemed to have been irrevocably accepted and to conform in all respects to the order. In the case of latent defects, written notice must be given within [number] days of discovery and in any event not later than [number] days from delivery.
No Products shall be returned to the Supplier without the Supplier's prior written authorisation. Where a return is authorised, the Products shall be returned at the Distributor's cost and risk, in their original packaging and in resaleable condition, and the Supplier's liability in respect of any accepted return shall be strictly limited, at the Supplier's option, to replacement of the Products concerned or to a credit note equal to the invoiced price thereof.
Marketing and Promotion
The Distributor shall, at its own cost and expense, actively promote, advertise and market the Products throughout the Territory with all due diligence, in a manner consistent with the premium image, reputation and goodwill of the Supplier and the Brand, and shall use its best endeavours to maximise sales of the Products within the Territory.
The Distributor shall develop and maintain, at its own cost, suitable sales infrastructure, including qualified personnel, adequate storage, demonstration and after-sales facilities, and shall provide the Supplier upon request with reasonable details of its marketing plans, promotional campaigns, sales forecasts and market intelligence.
All advertising, promotional, marketing and point-of-sale materials relating to the Products, whether in printed, audio-visual, digital, online or any other form, shall be submitted to the Supplier for prior written approval. The Supplier may withhold approval in its sole discretion and may require modifications prior to publication, use or dissemination.
The Distributor shall not make, publish or disseminate any statement, representation, warranty or claim in relation to the Products, their characteristics, performance, benefits, origin or regulatory status, which is not expressly authorised by the Supplier or substantiated by the Supplier's official documentation.
The Distributor shall not engage in any comparative, misleading, disparaging or aggressive advertising, nor in any practice liable to damage the reputation of the Supplier, the Brand or the Products, and shall comply with all applicable laws, regulations and industry codes of practice governing the advertising and promotion of the Products within the Territory.
The Supplier may, but shall be under no obligation to, provide to the Distributor samples, brochures, specification sheets and other promotional materials, which shall remain the property of the Supplier and shall be used by the Distributor exclusively for the promotion of the Products hereunder and otherwise in accordance with the Supplier's instructions.
Prices and Payment Terms
The prices payable by the Distributor for the Products shall be those set forth in the Supplier's price list in force on the date of acceptance of the relevant order, expressed in [Currency]. The Supplier reserves the right to amend its price list and the discounts (if any) granted to the Distributor at any time, upon not less than [number] days' prior written notice; such revised prices shall apply to all orders accepted on or after the effective date of the revision.
Unless otherwise expressly stated, all prices are exclusive of value added tax, sales tax, customs duties, excise, tariffs, levies, withholding taxes and all other taxes, charges and governmental impositions of whatever nature, which shall be borne exclusively by the Distributor. All prices are further exclusive of carriage, insurance, packaging and handling costs, which shall be invoiced to and borne by the Distributor.
Payment for all Products shall be made by the Distributor by way of prepayment in full, in cleared funds, prior to shipment of the relevant order by the Supplier. The Supplier shall be under no obligation to dispatch any Products until such prepayment has been received and cleared in its designated bank account.
All payments shall be made in [Currency], by wire transfer to such bank account as the Supplier may designate in writing, free and clear of and without any deduction, withholding, set-off, counterclaim or abatement whatsoever. If the Distributor is required by law to make any deduction or withholding, the sum payable shall be increased so that the net amount received by the Supplier equals the amount it would have received had no such deduction or withholding been required.
Any sum which is not paid when due shall bear interest at the rate of [number]% per month, or the maximum rate permitted by applicable law, whichever is the lower, accruing on a daily basis from the due date until actual payment in full, together with such reasonable costs and expenses (including legal and collection fees) as the Supplier may incur in recovering any overdue sum.
Without prejudice to any other right or remedy, the Supplier may, in the event of any delay or default in payment by the Distributor, suspend performance of any outstanding order, withhold further deliveries, cancel any discounts or credit facilities previously granted, require advance payment or additional security in respect of any future orders, and/or terminate this Agreement in accordance with the termination provisions hereof.
The Distributor shall be solely responsible for determining the resale prices of the Products within the Territory and shall bear all risks associated with such resale, including risk of non-payment by its own customers, currency fluctuations and credit risk.
Intellectual Property and Use of Brand
The Distributor acknowledges and agrees that all intellectual property rights of whatever nature subsisting in or relating to the Products, the Brand, the Supplier's documentation, drawings, specifications, know-how, trade secrets, promotional materials, websites, software and any derivatives, improvements or modifications thereof, are and shall remain the sole and exclusive property of the Supplier (or its licensors), and no title, right or interest therein is transferred, assigned or licensed to the Distributor other than as expressly set forth herein.
Subject to the terms of this Agreement, the Supplier grants to the Distributor a non-exclusive, non-transferable, non-sublicensable, revocable licence to use the Brand within the Territory and during the Term, solely to the extent strictly necessary for the promotion, marketing and resale of the Products in accordance with this Agreement, and strictly in compliance with the Supplier's guidelines, instructions and standards as communicated from time to time.
The Distributor shall use the Brand only in the form and manner authorised by the Supplier, shall not combine the Brand with any other sign, trademark or logo, shall not alter, deface or remove any Brand element affixed to the Products, and shall ensure that all use of the Brand accrues to the benefit of the Supplier.
The Distributor shall not, directly or indirectly, apply for, register, acquire or seek to acquire any intellectual property rights which are identical or confusingly similar to the Brand, nor any domain name, social media handle, trading name or company name incorporating the Brand or any element thereof. Any registration made in breach of this undertaking shall be assigned to the Supplier upon first demand, at the Distributor's cost.
The Distributor shall promptly notify the Supplier of any actual, suspected or threatened infringement, misappropriation, counterfeiting, dilution or other violation of the Supplier's intellectual property rights of which it becomes aware, and shall provide, at the Supplier's cost and request, such reasonable assistance as the Supplier may require in connection with any enforcement action. The conduct of any such action shall rest exclusively with the Supplier.
Upon the expiry or termination of this Agreement for any reason, the licence granted hereunder shall automatically and immediately terminate, and the Distributor shall forthwith cease all use of the Brand and the Supplier's intellectual property, and shall destroy or return (at the Supplier's option) all materials bearing the Brand which remain in its possession or control, save to the extent reasonably necessary to dispose of residual stock in accordance with this Agreement.
Obligations of the Distributor
In addition to the other obligations set forth herein, the Distributor shall, throughout the Term:
Devote its best commercial efforts and resources to the promotion, marketing, sale and distribution of the Products within the Territory, maintaining sufficient stock levels to meet reasonably anticipated demand and ensuring prompt, courteous and professional service to customers.
Conduct its business with due care and in a manner that preserves and enhances the reputation and goodwill of the Supplier, the Products and the Brand, and refrain from any act, omission or statement liable to bring the Supplier, the Products or the Brand into disrepute.
Comply at its own cost with all applicable laws, regulations, codes of practice, standards and authorisations in force in the Territory and in any other jurisdiction relevant to its activities hereunder, including those relating to importation, customs, taxation, consumer protection, product safety, labelling, advertising, anti-bribery, anti-corruption, data protection, trade sanctions and export controls, and obtain and maintain in force at its own cost all permits, licences, registrations and authorisations required for the lawful conduct of its activities.
Not, directly or indirectly, during the Term and for a period of [number] months thereafter, manufacture, import, distribute, promote, market, sell, represent or otherwise deal in any products which compete, in whole or in part, with the Products, nor hold any material interest in any entity engaged in such activities, without the prior written consent of the Supplier.
Provide to the Supplier, upon reasonable request and in any event not less than [number] times per contract year, accurate written reports concerning sales volumes, stock levels, customer profiles, market conditions, competitive activity and such other information as the Supplier may reasonably require for the proper monitoring of the distribution of the Products.
Maintain complete and accurate books, records and accounts in relation to its activities hereunder, and permit the Supplier (or its authorised representatives), upon reasonable notice and during normal business hours, to inspect, audit and take copies of such books, records and accounts for the purpose of verifying the Distributor's compliance with this Agreement.
Procure and maintain in force, at its own cost, with reputable insurers, such insurance policies (including public liability, product liability and property insurance) as may be prudent and customary for a business of the nature contemplated hereunder, with coverage of not less than [Amount] [Currency] per occurrence, and provide the Supplier with evidence thereof upon request.
Promptly inform the Supplier of any customer complaint, product safety issue, recall request, regulatory enquiry, investigation or legal proceeding relating to the Products, and cooperate fully with the Supplier in the handling thereof, including in the event of any product recall, which shall be conducted under the Supplier's direction.
Obligations of the Supplier
The Supplier shall, in accordance with the terms of this Agreement:
Use reasonable commercial efforts to supply the Products to the Distributor against orders duly placed and accepted hereunder, subject to availability of stock, production capacity and compliance by the Distributor with its obligations under this Agreement.
Make available to the Distributor, free of charge, such technical and commercial documentation concerning the Products as the Supplier, in its reasonable discretion, considers necessary to enable the Distributor to perform its obligations hereunder.
Inform the Distributor, within a reasonable timeframe, of any material modification or discontinuation of the Products likely to affect the distribution activities of the Distributor in a significant manner.
Supply the Products in conformity with the specifications set forth in the Supplier's then-current documentation, subject to the limited warranty set forth in Clause 11 hereof and to the exclusions, limitations and disclaimers provided therein.
Reserve the exclusive right to determine the composition of its Product range, the sales channels through which the Products may be distributed, the pricing structure, the credit and commercial policy applicable to the Products, and any other aspect of its commercial strategy relating to the Products.
Not be bound to disclose or make available to the Distributor any confidential, proprietary or sensitive information save to the extent strictly necessary for the performance of this Agreement, and nothing herein shall oblige the Supplier to transfer any know-how, trade secret or technology to the Distributor.
Representations and Warranties
The Distributor represents and warrants to the Supplier that: (i) it has full legal capacity, right, power and authority to enter into and perform this Agreement; (ii) the execution and performance of this Agreement do not and will not contravene any law, regulation, agreement or obligation binding upon it; (iii) it has obtained and will maintain all authorisations, licences, permits and registrations necessary for the performance of its obligations hereunder; and (iv) it will perform its obligations with due skill, care and diligence and in accordance with best industry practice.
The Supplier warrants to the Distributor that, upon delivery and for a period of [number] months thereafter (the "Warranty Period"), the Products shall materially conform to the Supplier's published specifications and shall be free from material defects in materials and workmanship, when used, stored, transported and handled in accordance with the Supplier's instructions and normal operating conditions.
The warranty set forth in the preceding clause shall not apply to any Product which has been (i) subject to misuse, neglect, accident, abnormal operating conditions or improper storage, transport or handling, (ii) modified, altered, repaired, repackaged or combined with other goods by any person other than the Supplier or a person authorised by the Supplier, (iii) damaged by any cause external to the Product, or (iv) used after expiry of its indicated shelf life or beyond its intended use.
In the event of any valid warranty claim duly notified in writing to the Supplier within the Warranty Period, the Supplier's sole and exclusive liability, and the Distributor's sole and exclusive remedy, shall be, at the Supplier's option, to repair the defective Product, replace it with a conforming Product, or issue a credit note or refund equal to the invoiced price thereof. In no circumstances shall the Supplier be liable for any onward warranty, guarantee or commitment given by the Distributor to any third party.
Save for the express warranties set forth in this Agreement, the Supplier makes no, and hereby expressly disclaims, all other representations, warranties, conditions and undertakings of whatever nature, whether express or implied, statutory or otherwise, including any implied warranty of merchantability, satisfactory quality, fitness for a particular purpose, non-infringement or arising from course of dealing or usage of trade, in each case to the fullest extent permitted by applicable law.
The Distributor shall not extend to its customers or any third party any warranty, representation, condition, guarantee or commitment going beyond the express warranties set forth in this Clause, and shall be solely liable for and shall hold the Supplier harmless in respect of any such additional warranty, representation, condition, guarantee or commitment.
Limitation of Liability
To the fullest extent permitted by applicable law, in no event shall the Supplier be liable to the Distributor, whether in contract, tort (including negligence), breach of statutory duty, misrepresentation, restitution or otherwise, for any (i) loss of profits, revenue, business, contracts, anticipated savings, goodwill or reputation, (ii) loss or corruption of data, (iii) loss of use of any assets, or (iv) indirect, special, incidental, consequential, punitive or exemplary losses or damages, in each case howsoever arising out of or in connection with this Agreement, even if the Supplier has been advised of the possibility of such losses or damages.
Without prejudice to the foregoing, the aggregate liability of the Supplier arising out of or in connection with this Agreement, from all causes of action and under all theories of liability, shall not in any circumstances exceed the lesser of (i) the total amount actually paid by the Distributor to the Supplier for the Products in the twelve (12) month period immediately preceding the event giving rise to the claim, or (ii) [Amount] [Currency].
The Distributor expressly acknowledges that the pricing of the Products and the commercial terms hereof have been fixed on the basis of the limitations and exclusions of liability set forth herein, and that such limitations and exclusions represent a fair and reasonable allocation of risk between the Parties.
The limitations and exclusions of liability set forth in this Clause shall not apply to any liability which cannot be lawfully excluded or limited under applicable law, including liability for death or personal injury caused by negligence or liability for fraud or fraudulent misrepresentation.
Any claim brought by the Distributor against the Supplier under or in connection with this Agreement must be formally notified in writing to the Supplier, with full particulars, within [number] months of the date on which the Distributor became aware or ought reasonably to have become aware of the circumstances giving rise to the claim, failing which the claim shall be deemed irrevocably waived.
Indemnification
The Distributor shall indemnify, defend and hold harmless the Supplier, its affiliates, and their respective directors, officers, employees, agents and representatives (the "Supplier Indemnitees"), from and against any and all claims, actions, proceedings, demands, losses, damages, liabilities, judgments, settlements, costs and expenses (including reasonable legal fees and disbursements) suffered or incurred by any Supplier Indemnitee arising out of or in connection with (i) any breach by the Distributor of any representation, warranty, covenant or obligation under this Agreement, (ii) any act, omission, negligence, wilful misconduct or fraud of the Distributor or its personnel, (iii) any misrepresentation, additional warranty, guarantee or commitment made by the Distributor to any third party in respect of the Products, (iv) any alteration, modification, repackaging or combination of the Products by the Distributor, (v) the handling, storage, transport, marketing, promotion, sale or resale of the Products by the Distributor, or (vi) any infringement by the Distributor of any third party rights or applicable laws.
The Distributor shall further indemnify and hold the Supplier Indemnitees harmless in respect of any claim brought by any customer, end-user, employee, agent, authority or other third party arising from the Distributor's own commercial, contractual, employment, tax or regulatory arrangements, including any claim for commission, compensation, indemnity or severance arising upon the expiry or termination of this Agreement.
The Supplier shall promptly notify the Distributor of any claim in respect of which it intends to seek indemnification hereunder, provided that any delay or failure to give such notice shall not relieve the Distributor of its indemnification obligations save to the extent that the Distributor is materially prejudiced thereby.
The Supplier shall have the right, but not the obligation, to assume and control the defence and settlement of any indemnified claim with counsel of its choice, at the Distributor's cost, and the Distributor shall provide all reasonable cooperation, information and assistance in connection therewith. The Distributor shall not settle or compromise any indemnified claim in a manner that imposes any obligation, admission or restriction upon the Supplier without the Supplier's prior written consent.
The indemnification obligations set forth in this Clause shall survive the expiry or termination of this Agreement for any reason whatsoever.
Confidentiality
Each Party (the "Receiving Party") shall maintain in strict confidence all Confidential Information of the other Party (the "Disclosing Party") which comes to its knowledge or into its possession in connection with this Agreement, and shall not use, reproduce, disclose or disseminate the same except as strictly necessary for the performance of this Agreement.
The Receiving Party shall apply at least the same degree of care to the Disclosing Party's Confidential Information as it applies to its own confidential information of similar nature, and in any event no less than a reasonable degree of care, and shall limit disclosure to those of its personnel, professional advisers and sub-contractors who have a strict need to know and who are bound by confidentiality obligations no less onerous than those set forth herein.
The obligations of confidentiality shall not apply to any information which the Receiving Party can demonstrate by written records: (i) was in its lawful possession, free of any obligation of confidentiality, prior to disclosure by the Disclosing Party; (ii) is or becomes generally available to the public other than through breach of this Agreement; (iii) was lawfully obtained from a third party entitled to disclose the same without obligation of confidentiality; or (iv) was independently developed by the Receiving Party without reference to the Confidential Information.
The Receiving Party may disclose Confidential Information to the extent required by applicable law, regulation, court order or competent authority, provided that, where lawful and practicable, it first gives prompt written notice to the Disclosing Party so as to afford the Disclosing Party an opportunity to seek protective measures, and that any disclosure is limited to the minimum necessary.
The obligations of confidentiality set forth in this Clause shall remain in force throughout the Term and for a period of [number] years following the expiry or termination of this Agreement, howsoever caused, provided that in respect of any Confidential Information constituting a trade secret the obligations shall subsist for so long as the information retains such status.
Upon the expiry or termination of this Agreement, or earlier upon written request of the Disclosing Party, the Receiving Party shall promptly return or, at the Disclosing Party's option, destroy all Confidential Information in its possession or control (including all copies, extracts and derivatives), and shall, upon request, certify in writing that it has complied with this obligation.
Term and Renewal
This Agreement shall enter into force on the Effective Date and shall remain in force for an initial fixed term of [number] years (the "Initial Term"), unless terminated earlier in accordance with the provisions hereof.
Upon the expiry of the Initial Term, this Agreement shall automatically renew for successive renewal periods of [number] years each (each a "Renewal Term" and together with the Initial Term, the "Term"), unless either Party gives written notice of its intention not to renew to the other Party not less than [number] months prior to the expiry of the then-current Initial Term or Renewal Term.
Non-renewal of this Agreement in accordance with the preceding clause shall not constitute a breach of this Agreement nor entitle the other Party to any indemnity, compensation, damages or other payment of whatever nature, whether in respect of loss of profits, loss of goodwill, loss of market share, loss of clientele, investments made, or otherwise, and each Party expressly and irrevocably waives any such claim.
Each Renewal Term shall be on the same terms and conditions as the Initial Term, save that the Supplier may, prior to the commencement of any Renewal Term, propose amendments to the commercial terms (including pricing, Minimum Purchase Obligations and discounts), and the Distributor's acceptance of continued performance after the commencement of the Renewal Term shall constitute acceptance of such amendments.
The expiry of this Agreement upon the giving of a notice of non-renewal shall take effect without the need for any further formality, judicial intervention or notice of default, and without prejudice to any rights, remedies or obligations having accrued prior to the date of expiry.
Termination and Consequences of Termination
Without prejudice to any other right or remedy available to it, the Supplier may terminate this Agreement, in whole or in part, with immediate effect by written notice to the Distributor upon the occurrence of any of the following events: (i) any material breach by the Distributor of any provision of this Agreement which, if capable of remedy, is not remedied within [number] days of receipt of written notice requiring remedy; (ii) failure by the Distributor to pay any sum due hereunder on the due date; (iii) failure by the Distributor to meet the Minimum Purchase Obligation; (iv) any breach by the Distributor of its obligations relating to intellectual property, confidentiality, non-competition, anti-bribery or compliance with applicable laws; (v) the Distributor becoming insolvent, suspending payments, entering into any arrangement or composition with its creditors, becoming subject to any insolvency, bankruptcy, administration, receivership or liquidation proceeding, or ceasing or threatening to cease to carry on business; (vi) any change in the direct or indirect ownership, control or management of the Distributor's business which the Supplier, in its reasonable discretion, considers prejudicial to its interests; or (vii) the death, incapacity or disappearance of the Distributor in its capacity as a sole trader.
In addition, the Supplier may terminate this Agreement for convenience, without cause and without liability, upon not less than [number] months' prior written notice to the Distributor.
Upon the expiry or termination of this Agreement for any reason: (i) all rights, licences and authorisations granted to the Distributor shall immediately cease; (ii) the Distributor shall immediately cease to describe itself as a distributor of the Supplier, cease all use of the Brand and promptly return or destroy all materials bearing the Brand; (iii) all sums owed by the Distributor to the Supplier shall become immediately due and payable, notwithstanding any contrary payment term; (iv) all pending orders may, at the Supplier's option, be cancelled, suspended or fulfilled against prepayment on cash terms; and (v) each Party shall return or destroy the other Party's Confidential Information in accordance with Clause 14.
The Supplier shall have the option, exercisable at its sole and absolute discretion by written notice given within [number] days of the effective date of expiry or termination, to repurchase from the Distributor all or any part of the unsold stock of Products held by the Distributor, at a price equal to the lesser of the price originally invoiced by the Supplier to the Distributor and the then-current market value of such Products, less any costs of inspection, refurbishment, reconditioning or restocking.
Expiry or termination of this Agreement, howsoever caused, shall not entitle the Distributor to any indemnity, compensation, goodwill payment, severance, clientele indemnity, repurchase obligation or any other payment of any kind, whether in respect of loss of profits, investments, personnel, clientele, goodwill, market share or otherwise, and the Distributor expressly and irrevocably waives any such claim to the fullest extent permitted by applicable law.
Expiry or termination of this Agreement shall be without prejudice to any rights, remedies or obligations having accrued prior to the effective date thereof, and those provisions which by their nature or express terms are intended to survive expiry or termination (including the provisions concerning intellectual property, confidentiality, limitation of liability, indemnification, governing law and dispute resolution) shall continue in full force and effect.
Governing Law and Dispute Resolution
This Agreement, its formation, validity, interpretation, performance and termination, and any non-contractual obligations arising out of or in connection with it, shall be governed by and construed in accordance with the laws of [Governing Law Jurisdiction], without regard to its conflict of laws principles. The application of the United Nations Convention on Contracts for the International Sale of Goods is hereby expressly excluded.
The Parties shall endeavour to resolve amicably any dispute, controversy, claim or difference arising out of or in connection with this Agreement, including any question regarding its existence, validity, interpretation, performance, breach or termination (a "Dispute"), by good faith negotiations between their respective authorised representatives, commenced upon written notice from one Party to the other.
If any Dispute is not resolved within [number] days of such written notice (or within such longer period as the Parties may agree in writing), the Dispute shall be finally and exclusively submitted to [arbitration under the Rules of [Arbitration Institution] by [number] arbitrator(s), seated in [Seat of Arbitration], conducted in the English language / to the exclusive jurisdiction of the competent courts of [Jurisdiction]].
Notwithstanding the foregoing, the Supplier shall be entitled, at its sole discretion, to seek injunctive, interim or conservatory relief, or to initiate proceedings for the recovery of undisputed sums due, before any court of competent jurisdiction, including the courts of the place where the Distributor has its registered office, place of business or assets.
Pending the final resolution of any Dispute, the Parties shall continue to perform their respective obligations under this Agreement, save to the extent that such performance is directly affected by the Dispute.
Each Party shall bear its own costs and expenses incurred in connection with any Dispute, save that the arbitral tribunal or competent court may, in its discretion, order the losing Party to reimburse all or part of the prevailing Party's costs, including reasonable legal and expert fees.
Miscellaneous
This Agreement, together with any documents expressly referred to herein, constitutes the entire agreement between the Parties with respect to its subject matter, and supersedes all prior and contemporaneous negotiations, discussions, understandings, representations, warranties and agreements, whether oral or written, between the Parties relating thereto.
No modification, amendment, variation or supplement of this Agreement shall be valid or binding unless made in writing and duly signed by authorised representatives of both Parties. The Supplier's acceptance of orders or deliveries made pursuant to any purchase order, confirmation or other document containing additional or conflicting terms shall not constitute acceptance of such additional or conflicting terms.
No failure or delay by either Party in exercising any right, power or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any further or other exercise of such or any other right, power or remedy. Any waiver must be in writing and signed by the waiving Party.
If any provision of this Agreement is held by any court or competent authority to be invalid, illegal or unenforceable, in whole or in part, the remaining provisions shall continue in full force and effect, and the Parties shall negotiate in good faith to replace the invalid, illegal or unenforceable provision with a valid provision having an effect as close as possible to the original intent of the Parties.
The Distributor shall not assign, transfer, charge, sub-contract, delegate or otherwise dispose of this Agreement or any of its rights or obligations hereunder, in whole or in part, without the prior written consent of the Supplier, which may be withheld in its sole discretion. The Supplier may freely assign, transfer or sub-contract this Agreement or any of its rights or obligations hereunder to any of its affiliates or to any third party, upon notice to the Distributor.
Neither Party shall be liable for any failure or delay in the performance of its obligations hereunder (other than any obligation to make payment) to the extent that such failure or delay is caused by circumstances beyond its reasonable control, including acts of God, war, terrorism, civil unrest, government action, embargo, strike, lock-out, epidemic, pandemic, natural disaster, failure of utilities or transportation (a "Force Majeure Event"). The affected Party shall promptly notify the other Party of the Force Majeure Event and shall use reasonable efforts to mitigate its effects. If a Force Majeure Event continues for more than [number] consecutive days, the Supplier may terminate this Agreement forthwith by written notice to the Distributor, without liability.
All notices and other communications given or made hereunder shall be in writing and in the English language, and shall be delivered by hand, by internationally recognised courier, by registered mail with acknowledgement of receipt, or by electronic mail to the addresses of the Parties set forth in the signature block below (or such other address as may be notified in accordance with this Clause). Notices shall be deemed received upon actual delivery, or in the case of electronic mail, upon confirmation of successful transmission during normal business hours.
The relationship between the Parties is that of independent contractors. Nothing in this Agreement shall be construed as creating any partnership, joint venture, agency, employment, franchise or fiduciary relationship between the Parties, and neither Party shall have any authority to bind, commit or otherwise represent the other.
This Agreement may be executed in one or more counterparts (including by electronic signature or by exchange of signed copies by electronic means), each of which shall be deemed an original and all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly authorised representatives as of the Effective Date first above written.
FOR AND ON BEHALF OF THE SUPPLIER:
[Supplier Full Legal Name]
Name: [Name of Representative]
Title: [Title]
Signature: ______________________________
Date: [Date]
Address for Notices: [Registered Address]
Email: [Email Address]
THE DISTRIBUTOR:
[Distributor Full Legal Name], sole trader
Name: [Name]
Registration Number: [Registration Number]
Signature: ______________________________
Date: [Date]
Address for Notices: [Address]
Email: [Email Address]