Reaching Agreements With Suppliers And Distributors

c. The company guarantees and ensures that products are free of design, materials and processing errors and meet specified specifications. 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. The distributor agrees that it will carefully provide the services and obligations described in this agreement. The distributor`s activity is subject to its exclusive and exclusive control, including, but not limited, to the monitoring and liability of personnel-related expenses. The distributor will make the best reasonable efforts to distribute the products in the territory. Limit liability limitation: in most jurisdictions, the manufacturer is responsible for the damage caused by the use of the products. Some agreements try to transfer that responsibility to the distributor, but if they are tested by the courts, they probably will not hold. Therefore, the right way to resolve the liability risk is to formulate an effective compensation mechanism that limits the extent of your liability.

Such a mechanism should limit your liability in terms of both amount and time and be supported by appropriate insurance coverage. 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. If the merchant is expected to call customers at a specific frequency, this should be clarified. The manufacturer may wish for a clause in the contract stipulating that the distributor has been represented by a lawyer. Some fairly harsh provisions were imposed on a merchant when the distributor was a competent businessman, represented by a lawyer. Some manufacturers` lawyers conclude that a clause stipulating that the trader has been represented by a lawyer is desirable. Of course, a trader should seek advice to represent him.

A sales contract is one of the most important documents a merchant will ever sign. It can indeed be the basis of all its activity. The same goes for the manufacturer. This is why, from the point of view of each party, representation by competent and experienced advisors is essential. This article lists and discusses the rules of the thumb and the many aspects that must be taken into account and anchored in the definition and anchoring of the conditions of cooperation with the elected party, after a decision to market the products by the appointment of a distributor.