Distribution Agreement

Distribution differs from agency in one important respect: the distributor buys and resells in their own name, taking title and risk. That changes the legal analysis (the Commercial Agents Regulations do not apply), and it changes the commercial questions that matter.

What a distribution agreement governs

A distribution agreement governs the relationship between a supplier and a distributor who buys and resells the supplier's goods within a defined territory. It covers appointment, territory, exclusivity, minimum purchase commitments, pricing, marketing obligations, intellectual property, liability, and termination.

The drafting needs to address territory and exclusivity; pricing and discount structure; minimum purchase commitments; brand and IP usage; product warranties and post-sale support; and termination, including what happens to the distributor's stock and customer relationships.

The point of tension in most distribution agreements is the balance between the supplier's desire to control how the product is sold and the distributor's need for commercial autonomy. A good agreement makes that balance explicit rather than papering over it.

Example: a typical scope and fixed fee

For a two-party distribution arrangement covering goods within a defined territory, the typical scope looks like this.

What's included

• A consultation to understand the distribution relationship, products, and territory
• Drafting of a distribution agreement covering appointment, territory, exclusivity or non-exclusivity, minimum purchase commitments, pricing, marketing obligations, IP usage, liability, duration, and termination
• One round of revisions based on your feedback
• Final version ready for execution

What's outside this scope

• Multi-territory or multi-distributor arrangements
• Selective distribution systems requiring competition law analysis
• Agency agreements (see Agency Agreement)
• Negotiation with the other party beyond the scope described above
• Tax advice

Fixed fee: £850, no VAT.

How I will approach your matter

Once you have instructed me, I will arrange a consultation to understand the distribution relationship, products, and territory before drafting. The first draft reflects the commercial structure; the revision round refines the mechanics.