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How to Draft an Agency or Distributor Agreement?

Incoterms is one particular kind of General Standard Conditions if the exporter and buyer agree on an FOB price - it has a clear defined Incoterms meaning and is legally binding.

7. Relationship of Parties

  • The Sales Representative agrees to keep the Company notified of any change of ownership, control, or management and agrees not to use anyone other than a principal officer, or regular employee of its firm, to sell the company's products (i.e. no sub-contracting).
     
  • Acknowledges its legal status as an independent contractor to the Company and not a legal representative or agent and cannot enter into legally binding contracts on behalf of the Company.

 

8. Expiration or Termination

  • The contract will expire at the end of the stated period unless renewed by written agreement of both parties.

 

9. Termination

  • The Agreement may be terminated earlier by 60 days' notice in writing, with or without cause, by either party to the other or if the Sales Representative attempts to assign the Agreement to someone else without written consent.
     
  • If there is a change in the control or management that is unacceptable or uses the services of anyone unacceptable, if the Representative stops doing business or becomes insolvent.
 
 

10. Obligation on Expiration or Termination

  • The obligations of both parties under the Agreement continue with regard to customer orders received before termination or orders received within six months of termination, commission is payable if the order is the result of the Representative's efforts.
     
  • No other liability exists between the Company and the Sales Representative.
 

11. Private Information

  • The Sales Representative agrees to hold in confidence and safeguard all business and technical information that it receives from the Company.

 

12. Company Trademarks and Trade Names

  • The Sales Representative agrees to abide by the Company's regulations regarding its trademarks and trade names and agrees not to do anything detrimental to them or the Company's reputation or its products.

 

13. Limitations of Liability

  • Neither party is to have any liability to the other party in contract, except as provided under the terms of the agreement.

 

14. Release of Claims

  • The Sales Representative, on signing of the Agreement, releases the Company from any claims it might have.

 

15. Failure to Enforce

  • If either party fails to enforce any provision of the Agreement at any time, the exporter still retains the right to do so later on.

 

16. Notices

  • These may be sent to the other party by: registered Airmail, telegram, cable, fax, E-mail or telex at the stated address.

 

16. Execution and Modifications

  • This provision states that this is the only and entire Agreement between the parties when duly executed with regard to sales representation in the specified country.
     
  • It also states how the Agreement may be modified, if and when necessary.

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