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2 January 2013
A distribution agreement usually involves a manufacturer
(i.e. supplier) selling goods onto a wholesaler
(i.e. distributer), who then sells/ distributes the goods
onto his customers. (e.g. retail stores/consumers).
The distribution agreement is between the supplier
and the distributer, therefore no contractual
relationship is in existence between the supplier and the distributers
customers. (This does not prevent the end users of the products from
making a claim against the manufacturer for a defective product in
tort/product liability as the manufacturer still owes a duty of care to
the consumers of their products.)
The main legislation governing distribution agreements is the Competition
Act 1998 in the U.K and Article 101 of the EC
Treaty for Europe. Distribution agreements come in a number
of forms such as:
- Exclusive Distribution: In a strait foreword exclusive distribution
agreement only one distributer may sell goods in a particular
territory, the supplier/manufacturer is also prevented from selling
goods within the defined territory.
- Non Exclusive Distribution: This type of agreement allows the
manufacturer/supplier to sell and appoint other distributers in a
certain defined territory where he has already appointed a distributor.
- Sole Distribution: In a sole distribution agreement only one
distributer is allowed to sell products in a certain defined territory.
However this does not prevent the manufacturer/supplier from selling
goods in that territory.
The above is not an exhaustive list and distribution agreements may be
tailored (in line with legislation of course) to the specific needs of
a particular business.
By Rehana Ali, a paralegal at Lawdit Solicitors that may be
contacted @ Rehana.email@example.com
About the Author
Solicitors offer services and advice for litigation,
commercial contracts, Intellectual Property and IT legal agreements. We
are experts in commercial law with a heavy emphasis on Intellectual
Property, Internet and e-commerce law. Lawdit is a member of the
International Trademark Association, the Solicitors' Association of
Higher Court Advocates and we are the appointed Solicitors to the
largest webdesign association in the world, the United Kingdom Website
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Article Published/Sorted/Amended on Scopulus 2013-01-22 09:05:12 in Legal Articles