What is a non-exclusive distribution agreement?
A non-exclusive distribution agreement is a legal contract between a manufacturer or supplier and a distributor. It grants the distributor the right to distribute the manufacturer's products or services within a specific market or territory. Unlike an exclusive distribution agreement, a non-exclusive agreement allows the manufacturer to appoint multiple distributors for the same products or services.
What are the types of non-exclusive distribution agreement?
There are several types of non-exclusive distribution agreements that businesses can use, depending on their specific needs. The main types include:
General non-exclusive distribution agreement: This agreement allows the distributor to sell the manufacturer's products or services to customers without any specific restrictions.
Territory-based non-exclusive distribution agreement: This agreement limits the distributor's rights to a specific geographic territory. It ensures that only the appointed distributor can sell the products or services in that particular area.
Product-based non-exclusive distribution agreement: This agreement restricts the distributor's rights to sell only certain products or services offered by the manufacturer. It allows the manufacturer to control the distribution of specific items or services.
Time-based non-exclusive distribution agreement: This agreement grants the distributor the rights to distribute the manufacturer's products or services for a specified period. It can be renewed or terminated after the agreed-upon duration.
How to complete a non-exclusive distribution agreement
Completing a non-exclusive distribution agreement requires attention to detail and adherence to legal requirements. Here are the steps to follow:
01
Identify the parties involved: Clearly state the names and contact information of the manufacturer or supplier and the distributor.
02
Define the scope of the agreement: Specify the products or services covered by the agreement and any limitations or exclusions.
03
Set the territory: Define the geographic area where the distributor has the rights to distribute the products or services.
04
Determine pricing and payment terms: Outline how the distributor will be compensated and any payment terms or conditions.
05
Establish termination provisions: Include clauses that outline the circumstances under which either party can terminate the agreement.
06
Include confidentiality and intellectual property clauses: Protect both parties' proprietary information and intellectual property rights.
07
Seek legal counsel: It is advised to consult with a lawyer or legal expert to ensure the agreement complies with applicable laws and regulations.
08
Sign and store copies: Once both parties have reviewed and agreed to the terms, sign the agreement and keep copies for future reference.
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