Distribution Agreements II
Supplier’s Trading Obligations
The supplier is usually obliged to supply the relevant goods as defined by the agreement. The agreement may require the goods/ product to conform to a defined specification.
Distributor’s Obligations
The distributor is usually obliged actively to offer the relevant goods/ services in the market. It may undertake that a minimum value will be ordered within a certain time.
Promotion
The distributor is usually obliged to promote the goods or services. The distributor is likely to undertake in an exclusive agreement, to use best endeavours to promote the sale of the goods and/ or services within the territory.
Support
At the outset of the agreement, the supplier/ manufacturer may make available to the distributor, the services of an employee who is suitably qualified in order to assist in setting up the business/ establishment.
The supplier may undertake to supply equipment, know-how, technical and other support, training, promotional material, models and samples as may be required for the operation of the business and sale of the goods by the distributor.
Ongoing Obligations
The supplier may require information in relation to key matters on an ongoing basis. The agreement may oblige the distributor to maintain records of sales and of customers. The supplier may have the right to inspect, audit and monitor performance and sales.
Conditions of Sale
The distribution agreement may specify the general terms under which individual sale contracts are concluded. As the distributor is not an agent of the supplier, it must not represent that is entitled to enter contracts or do anything on its behalf.