Non-exclusive distribution agreement

We created this template for use in relation to non-exclusive distribution deals. Under a non-exclusive distribution agreement, the supplier remains free to appoint other distributors within the relevant territory, and may itself supply the products that are the subject of the distribution agreement within that territory. In addition, the distributor may be prohibited from actively supplying the products in territories that are reserved to the supplier and its exclusive distributors.

This template is designed to be used in relation to non-exclusive distribution deals where the territory of the grant is within the UK or the EU.

The fundamental obligation of the distributor under this contract is to use reasonable endeavours to market, distribute and sell the products of the supplier.

The agreement includes both the general terms upon which a distributorship will be granted, and the specific terms upon which the distributor will purchase products from the supplier.

The standard variant is a shortened and simplified version of the premium variant. If you require a document with publicity rules, an indemnity benefiting the supplier, a trade mark licence, order forecasting provisions or after-sales support provisions, you should consider the premium version instead.

See also our exclusive distributor agreement.

Non-exclusive distribution agreement contents

1. Definitions
2. Term
3. Non-exclusive distributorship
4. Distributor obligations
5. Supplier obligations
6. Order procedure
7. Forecasting (premium only)
8. After-sales support (premium only)
9. No assignment of Intellectual Property Rights
10. Licence of Supplier Trade Marks (premium only)
11. Change control (premium only)
12. Charges
13. Payments
14. Confidentiality obligations
15. Publicity (premium only)
16. Warranties
17. Distributor indemnity (premium only)
18. Supplier Indemnity
19. Force Majeure Event
20. Effects of termination
21. Anti-corruption
22. Anti-slavery
23. Anti-tax evasion (premium only)
24. Notices
25. Assignment (part of "General" clause in standard version)
26. No waivers (part of "General" clause in standard version)
27. Severability (part of "General" clause in standard version)
28. Third party rights (part of "General" clause in standard version)
29. Variation (part of "General" clause in standard version)
30. Entire agreement (part of "General" clause in standard version)
31. Law and jurisdiction (part of "General" clause in standard version)
32. Interpretation

Can the non-exclusive distribution agreement be used in respect of market that is defined by sector, rather than territory?

A little adaptation is needed if you wish to define the relevant market in some way other than by territory. One advantage of territorial markets is that they can be defined with a high degree of certainty. If you wish to use sectoral distinction, take care to minimise ambiguity and vagueness.

What does the distributor have to provide to the supplier under the reporting clause?

The brief reporting clause from the standard template is quoted below:

"The Distributor will during the Term prepare and keep appropriate, accurate and up-to-date accounts and business records (including [insert details]) and within 10 Business Days following receipt of a written request from the Supplier, supply to the Supplier copies of any or all of these accounts and records."

More detailed reporting clauses are included in the premium document.

What does the legal compliance clause do?

This clause requires the distributor to comply with the laws in the territory in which it operates, and to obtain all licences, permits and approvals that are required for the operation of the distributorship. Of course, the distributor has to do these things anyway, but this clause ensures that the failure to do them constitutes a breach of contract, creating rights for the supplier against the distributor.

What after-sales support is the distributor supposed to provide under this premium variant?

The (entirely optional) support clause provides that the distributor will provide "first line" support to customers, while the supplier will provide "second line" support to the distributor. The precise content of these different levels of support will vary dramatically with the nature of the products. For this reason, very abstract definitions are used. First line support is defined as "support in relation to the use of the Products and in relation to defects in the Products"; whereas second line support is defined as "support in relation to defects in the Products only". If you use the after-sales support clause, you will probably want to add some flesh to these skeletal definitions.

What happens under the distribution contract if products are defective?

The supplier warrants to the distributor that the products will be of satisfactory quality. If they are not, then the distributor has a right to return the products for a credit of the price or replacements, plus in either case a credit of the return costs. The choice of remedy may be granted to either party. This contractual right may be specified to be subject to any other legal rights the distributor has in the circumstances.

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A copy of this non-exclusive distribution agreement is included in the following pack:

• Sale of goods pack (both standard and premium version of the documents)