Clearly, the interests differ considerably depending on which side of the table the parties are on. The producer may at least want some kind of competition agreement. On the other hand, a non-compete agreement will never be in the distributor`s interest. Non-competitive agreements are one of the most sensitive subjective provisions of the treaty. Counsel for both parties can say with great certainty whether a particular clause is “reasonable” and therefore applicable. However, they differ in that the manufacturer wishes to retain the absolute right to redirect its distribution or to make any other changes to the distribution agreement it wishes. It may want to replace distributors at a later date, or it may eliminate all distributors and sell directly. She might even want to leave the store in a certain line. The manufacturer will also want to protect its interest in its own brand, so that the distributor does not have any rights to it. Both parties will likely want a “merger clause” or a “full agreement” clause. It simply means that the contract is the whole agreement between the parties and that neither party can subsequently say that the terms of the contract are different, based on oral conversations, correspondence, file note, etc. In principle, the “complete agreement” clause is good contractual practice. If two people meet and negotiate a contract, it should be the contract, and its terms should not be changed by conversations, phone calls, letters, etc.
If the product is branded, what right does the distributor have to use the mark? Can he just put a sign in his window, on which we can see the mark? Can he use the mark on his header or other written documents? Can he use the brand in his name? If you are the distributor, you wish to assert all your rights, because without a contract or trademark license, the general rule is that you do not have the right to use the trademark, except as expressly granted by the trademark holder. From the manufacturer`s point of view, the key is to make sure that you retain all rights to your brand. It is acceptable for the distributor to use it, but you certainly do not want to lose your exclusive rights to the brand by granting these rights to the distributor. However, overall, a written agreement will be necessary and appropriate for both parties. Even if we were certainly not as pressing to represent a distributor as if we were to represent a manufacturer, it should be an integral part of any distribution agreement. The rest of this section includes standard distribution agreements ranging from very short agreements to more complex agreements. In our experience, the most typical agreement is a 4-page type agreement, which is made on 11 x 17 paper, so the full agreement is included on a single sheet. Printing is usually easy to read – with a fairly large type, unlike what you can see in an order or agreement with terms of sale. Sometimes the distribution agreement will indicate the distributor`s responsibilities either in terms of targets or quotas or with regard to the necessary purchases.
There are pros and cons to every way of saying it. We believe that the key lies in the fact that the manufacturer and distributor determine an acceptable “objective” for both parties. It is therefore more likely that the objective will be achieved, as it ensures mutual commitment and interest. A successful distribution agreement depends on an ongoing and productive relationship with the producer.