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Contrat Distribution

Template of Distribution Agreement

Modèle de contrat de distribution en anglais.

Bilingual template: this template of contract is available in English and in French.

See the French version

Distribution Agreement

ENTERED INTO BY AND BETWEEN:

ON THE FIRST PART,

XXX [identity of the physical or legal person],

hereafter referred to as the “Brand”,

AND ON THE SECOND PART,

XXX [identity of the physical or legal person],

hereafter referred to as the “Distributor”.

The Brand and the Distributor may be individually referred to as a “Party”or collectively as the “Parties”.

WHEREAS:

The Brand is _____ 

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. The Brand owns the trademark _____ [trademark] (the « Trademark »). The Brand markets _____ [description of the products] under the Trademark (the “Products”).

The Distributor is _____ 

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. He is recognized in his business field.

The Distributor wishes to distribute the Products in _____ [territory] (the « Territory ») and the Brand is willing to accept.

Discussions took place and the Parties decided to enter into this agreement, which, including its recitals and its appendices that incorporate into it and are indivisible, is hereafter referred to as the “Agreement” or the « Contract ».

NOW THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:

1 – Purpose of the Agreement

This Agreement sets forth the conditions under which the Brand authorizes the Distributor to distribute the Products and authorizes him to make use of the Trademark in the Territory.

2 – Distribution of the Products

2.1 – Mode of Distribution

The Distributor will purchase firmly the Products directly from the Brand and resale them retail to the final customers, in accordance with the principles of a concessionaire agreement. The Distributor will therefore invoice directly the customers in his own name [to be confirmed or amended].

2.2 – Territory

The Brand authorizes the Distributor to distribute the Products exclusively in the Territory, during the duration of the Agreement.

2.3 – Exclusivity and Non-Competition

The Distributor is granted exclusive distribution rights in the Territory for these Products. This territorial exclusivity implies that neither the Brand nor another distributor authorized by the Brand will be entitled to sell actively the Products in the Territory. However, the Brand or another authorized distributor will be entitled to make passive sales of Products in the Territory.

Respectively, the Distributor is not authorized to make active sales of Products outside the Territory, but he may make passive sales of Products outside the Territory.

The Distributor will not distribute in the Territory products competing with the Products [to be confirmed or amended – specific legal analysis is required in case of exclusivity / non-competing clause].

2.4 – Marketing

The Distributor undertakes to comply with the marketing policy defined by the Brand, it being understood that this policy may evolve during the Agreement.

The Distributor acknowledges that any action, promotion, canvassing or communication relating to the Brand or to the Products shall respect their image and their positioning and shall comply with the Brand’s quality standards as well as with its marketing policy. The Distributor will comply with all the obligations applying to his activities and will in particular ensure that the distribution of the Products and his promotion actions are always perfectly lawful and appropriate considering the aim pursued, in order to preserve the reputation and the image of the Brand and of the Products.

[Other provisions and any specifications deemed relevant should be detailed here].

2.5 – Internet

The Distributor may advertise and sell the Products on Internet, provided that he complies with the following provisions.

The Products shall be presented on web pages exclusively dedicated to the Trademark and the Products, intended for the final customers located in the Territory (the « Pages ») [to be confirmed or amended]. These Pages shall fully and strictly comply with the Brand’s specifications, notably as to their design, their layout, their content (including the meta-data, the code and all elements, including those that are not directly visible by the Internet user), their title, their name, their URL address, the programming language or the technological platform used. In general terms, the Pages shall comply with the Trademark’s identity and shall reflect the positioning of the Products [to be confirmed or amended]. They shall be updated regularly in order to give a faithful and actual image of the Trademark.

The Brand will provide the Distributor for free with the contents, images and texts relating to the Trademark and the Products in her possession.

The Distributor shall obtain the written authorization of the Brand as to the plan and the content of the Pages, prior to their initial publishing, their modification or update.

The Distributor shall bear all the costs related to these Pages, notably development, hosting, referencing, search engine optimization, exploitation.

The Pages shall target the Territory, since the Distributor is not authorized to sell actively the Products outside the Territory. The web-marketing, any action relating to the Pages, their referencing, their promotion, including canvassing, shall comply with the Brand’s policy. The Distributor shall strictly comply with his obligations as to the processing of personal data.

2.6 – Communication

The Distributor shall advise the Brand as to relevant communication actions in the Territory, in order to promote the Trademark and the Products.

[Other provisions and any specifications deemed relevant should be detailed here].

2.7 – Sales Reports

The Distributor shall provide to the Brand, regularly as defined by the Brand, a detailed sales report. This report shall notably specify the amount of the sales, expressed in the local currency, the wholesale price and the retail price of the Products as well as the number of Products sold.

2.8 – Security, conformity, guarantee and after-sale service

The Brand represents and guarantees to the Distributor that the Products comply with the provisions in force, which apply to them, as well as with her own statements regarding them. The Brand will comply with her security and conformity obligations regarding the Products. The Brand will provide to the Distributor all information, contents and documentation useful to promote the Trademark and the Products.

[To be specified: legal / commercial guarantee and after-sale service].

3 – Trademark Licence

3.1 – Representations and Guarantees by the Brand

The Brand represents and guarantees to the Distributor that she holds regularly all the intellectual property rights related to the Products and to the Trademark, that she does not harm the rights of third parties in this respect and that she may validly grant a licence to the Distributor allowing him to exploit these rights, in order to distribute the Products.

3.2 – Rights Granted to the Distributor

During the Agreement, on a temporary basis and exclusively for the purpose of distributing the Products in the Territory, the Distributor shall be entitled to inform the public that he is the Brand’s authorized distributor in the Territory, to advertise the Products and, more generally, to make directly and personally use of the Trademark in order to promote the Products.

Nothing in the Contract neither provides, nor shall be interpreted as providing, for the transfer, anyhow, to the benefit of the Distributor, of a right, title or interest whatsoever over the Trademark, and the temporary authorizations hereby granted for the sole purpose contemplated by the Agreement shall cease as of right, immediately and automatically, upon termination of this Agreement, either due to the expiry of its contractual term or to an early termination for any reason whatsoever.

The Distributor shall in particular not perform, in his name, or in the name of anyone else than the Brand, any deposit or registration whatsoever including the Trademark or relating to it, notably any trademark deposit or any domain name registration.

The Distributor notably undertakes to refrain from using the Trademark as a company name. He also undertakes to ensure that no confusion may arise, in anyone’s mind, and notably in the mind of the clients, with regard to his status of Distributor independent from the Brand, assuming the risks of his own business and activities.

Upon termination of the Agreement, either due to the expiry of the contractual term or to an early termination for any reason whatsoever, the Distributor shall cease to make use anyhow of the Trademark, either as a commercial name or in any other manner, and shall put at the Brand’s disposal all the advertising materials and all the elements of all kinds incorporating the Trademark or making reference to it, including any local Internet domain name.

3.3 – Transfer of Licence, Sub-licence and Sub-contracting

The Distributor shall under no circumstance grant anyone any title or right whatsoever over the Trademark, and in particular are strictly forbidden the transfer of the licence of Trademark, the sub-licence and the sub-contracting of the Trademark.

3.4 – Counterfeiting, Parasitism and Unfair Competition

The Distributor shall inform the Brand without delay of any counterfeit of the Products or of the Trademark, any attempt to benefit unlawfully from them, any unfair trading or any other unlawful practice likely to attempt to the Products or the Trademark, in the Territory, of which he would become aware, and shall provide his help to the Brand, if this latter so requests, in any action the Brand may undertake to stop such attempts.

4 – Financial Terms

The Brand will sell to the Distributor the Products and the related supplies (together the « Goods ») as defined below.

4.1 – Selling Price

Price of the Products

The Brand shall sell the Products to the Distributor at a price expressed in Euros taxes excluded, determined as follows: _____ [mode of determination of the price of the Products].

The Distributor shall determine freely his resale prices.

Price of the supplies

The Brand shall sell to the Distributor the supplies related to the Products at a price expressed in Euros taxes excluded, determined as follows: _____ [mode of determination of the price of the supplies].

4.2 – Payment Terms

The Brand will invoice the Distributor after each order of Goods (the « Order »)  [to be confirmed].

The invoices of the Brand shall be payable in Euros [to be confirmed], within _____ [payment term inferior or equal to 45 days end of the month or 60 days] as from the issuance of the invoice.

For any late payment, the Distributor shall automatically owe the Brand late payment penalties at a rate amounting to _____ [rate at least equal to three times the annual legal interest rate in force in France] and a minimum flat recovery costs indemnity of 40 (forty) Euros, due as of right, without a reminder being necessary.

[Minima to be specified in a paragraph 4.3 « minima » if any].

5 – Selling Terms

5.1 – Orders

The Orders placed by the Distributor with the Brand shall be confirmed in writing.

The Brand undertakes to supply the Distributor according to his Orders, within _____ [delivery time] as from each Order, provided that the Distributor has duly fulfilled all his contractual and notably payment obligations under this Agreement. The Brand may refuse to deliver Orders in case of any contractual breach by the Distributor.

5.2 – Delivery, Shipment

The Goods shall be delivered to the Distributor « ex-works », in _____ [place of delivery]. The prices of the Goods are therefore intended as net prices in Euros, taxes and costs excluded, for a delivery in this place.

The dispatch, shipment, insurance, tax clearance costs, the taxes and any other costs incurred shall be supported exclusively by the Distributor.

The Distributor shall make without delay any observations and reservations that would be appropriate towards the carrier and inform the Brand in writing. In the absence of written notification sent to the Brand at least fifteen calendar days after the receipt of the Goods by the Distributor, it shall be presumed that the Goods were provided to the Distributor in perfect condition.

5.3 – Transfer of Ownership of the Products

The Goods shall remain the Brand’s exclusive property until they are fully paid to the Brand. The Distributor shall take all the steps required to inform properly and in due time his creditors.

5.4 – Transfer of Risks

The risks related to the Goods shall be transferred from the Brand to the Distributor upon delivery of the Goods to the Distributor at the place of delivery. Given the ex-works terms agreed, the Goods shall be shipped at the exclusive risks of the Distributor [to be confirmed or amended].

6 – Specific Undertakings

6.1 – Audit and Inspection

During the enforcement of the Agreement and during a three-year period as from its expiry, the Distributor shall keep and retain, at his principal place of business, true, detailed and accurate books and records together with supporting invoices and vouchers of any and all transactions relating to the Products. The said books and records with supporting documentation and other items shall be open to audit and the taking of copies thereof by the Brand or its designee during regular business hours, upon no more than _____ [notice, for example: five business days notice].

The Brand or its designee may carry out a physical inventory of the stock of Goods retained by the Distributor or by any service provider of this latter.

The Distributor shall take any relevant measures to facilitate these audits and inspections.

In case an audit or an inspection reveals any breach of the Distributor’s contractual obligations, the costs of all the checks run by the Brand in this respect, duly justified by this latter, shall be exclusively supported by the Distributor, without prejudice to any other measures which the Brand may take.

6.2 – Regulations

The Distributor hereby commits to run his business in full compliance with any rules, laws and regulations in force in the Territory, to respect any rights of third parties, and to obtain and maintain any licenses, authorizations or registrations, which may be needed in the Territory, and to proceed with any declaration that may be required.

The Distributor shall inform and advise the Brand as to any rules applicable in the Territory, notably as regards the importing and marketing of the Goods, the legal and contractual guarantees and the after-sales service.

The Distributor holds the Brand harmless against all the consequences of any violations of rules of all kinds whatsoever applying in the Territory, of which the Brand would not be aware.

6.3 – Confidentiality

The Distributor shall, during the enforcement of the Agreement and during a five-year period after it’s expiry, keep all the terms of this agreement confidential, and shall not disclose to any third party any information contained in the Agreement or any information concerning the business of the Brand, notably the Trademark, the Products, the Goods and the Brand’s distribution network, except where required by law and where needed to implement the Agreement.

The Distributor undertakes to attend to the observation of this obligation by his employees, agents, service providers or partners whatsoever, and shall guarantee the Brand in this respect.

6.4 – Intuitus Personae

The Brand enters into this Agreement considering the specificities of the Distributor and of the persons who manage, own and control the Distributor.

Any direct or indirect change of control shall be notified beforehand to the Brand in writing, in order to solicit the Brand’s authorization. In case a change of control occurs without the Brand’s prior authorization, the Brand shall be entitled to terminate the Agreement at any time without prior notice.

7 – Duration of the Agreement

The Agreement shall enter into force as at the date when all the Parties sign it.

It is entered into for one or several successive fixed-term periods of _____[duration of the Agreement – for example five years]. At the expiry of each fixed-term period of _____[duration of the Agreement – for example five years], the Agreement shall be automatically renewed except if a Party notifies to the other Party, by letter with acknowledgment of receipt or by any other written means sufficiently probative, its decision not to renew the Agreement, at least _____ [prior notice – for example nine months]prior to the expiry date of the Agreement.

8 – Early Termination of the Agreement

Either party shall be entitled to terminate this Agreement unilaterally and with an immediate effect in the event that the other party does not remedy a material breach of its obligations under this Agreement and/or of its obligations inherent to the business at stake, within _____ [prior notice – for example 60 (sixty) days] of a written notification to do so delivered by the other Party, by letter with acknowledgment of receipt or by any other written means sufficiently probative, specifying the intent to apply this article.

9 – Remaining Products upon Termination of the Contract

At the expiry of this Agreement, whether at its initial term or after, or in case of early termination, the Brand shall have the option i) either to repurchase from the Distributor, at the original purchase price less a discount amounting to _____ [percentage, for example 20% (twenty percent)], all or part of the Products and other Goods in perfect condition held in inventory by the Distributor at the date of termination ii) or to allow the Distributor a _____ [duration of the sell-off period, for example: 3-month (three-month)] sell-off period, at the expiry of which the Brand may request destruction of the remaining Goods, at the Distributor’s expense. During the sell-off period, the Distributor shall strictly comply with the provisions of the Agreement relating to the distribution of the Products and the use of the Trademark, which will survive after the expiry of the Agreement, until the end of the sell-off period.

10 – Rules Governing the Agreement

10.1 – Law and Jurisdiction

The Agreement shall be governed by and interpreted in accordance with French law [alternatively, insert the clause for an international contract not governed by a State law: click here to learn more and find an appropriate template].

In case of any litigation arising in relation with the Agreement, the Parties hereby grant an exclusive jurisdiction to rule the case to French Courts, and specifically the Courts of _____ [city] (France).

10.2 – Nature of the Contractual Relationship

This Agreement is a commercial Agreement entered into between independent professionals.

This Agreement shall not in any way constitute a work agreement, since the Parties expressly refuse any employment relationship as an essential condition without which they would not have entered into this Agreement.

The Parties declare that the Agreement shall not in any case be considered as i) providing for a ”mandat d’intérêt commun” (common interest mandate) as per the French law concept, ii) a commercial agent agreement, notably in the meaning of the Directive 86/653/EEC on the coordination of the laws of the Member States relating to self-employed commercial agents, iii) a “voyageur, représentant, placier” (sales representative) agreement as per the French law concept, in the meaning of article L. 7311-3 of the French Labour Code.

The Distributor shall not be entitled to any indemnity whatsoever upon expiry or termination of the Agreement.

The Parties expressly state that it is not in their common intent that the responsibilities of a Party, including the employment contracts in force with its employees, may be transferred anyhow from a party to another party, in any circumstances whatsoever. Therefore they expressly want, as far as possible, to depart from any provision that could entail such consequences, notably any provision similar to articles L. 1224-1 and L. 1224-2 of the French Labour Code and to the European Council Directive 2001/23/EC of 12 March 2001 on the approximation of the laws of the Member States relating to the safeguarding of employees’ rights in the event of transfers of undertakings, businesses or parts of undertakings or businesses.

The Distributor guarantees the Brand against the consequences which may result from the existence of provisions providing for such transfer of responsibilities to the Brand, applying in the Territory and which would be mandatory provisions from which the Parties could not validly depart.

10.3 – Entirety of the Agreement

The Parties expressly state that the Agreement expresses the entirety of their agreement as regards its subject matter, and invalidates and replaces any previous agreements entered into between them in relation with its subject matter.

10.4 – Severability, Adaptation and Amendment

In case any provision whatsoever of the Agreement is deemed void, this provision shall not apply but the other provisions of the Agreement shall remain into force.

The Parties will do their best efforts to negotiate in good faith and in due time any potential modifications of the Agreement that may be necessary, particularly pursuant to mandatory legal or regulatory provisions or the binding decision of a Court.

In any case, notably where mandatory provisions apply, the purpose and the useful effect of the Agreement shall be taken into account as far as possible.

The Agreement may not be amended except by express and written mutual agreement of the Parties, in which case any amendment or waiver of any provision hereof shall be attached to the Agreement and shall incorporate to it.

10.5 – Renunciation

The fact that a Party abstains from requesting application of any provision whatsoever of the Agreement, shall not be considered as a renunciation to request said application and shall not give any right to the other Party.

10.6 – Official Domicile

For the purpose of this Agreement, the Parties take up residence in their respective domicile or registered office as indicated in the headings hereto. Any modification shall be notified to the other Party by letter with acknowledgement of receipt or otherwise in writing provided that the other Party duly and expressly acknowledges receipt, in order to be valid.

*****

The Agreement is drafted in English and printed in two [to be confirmed – each party shall be provided with one original copy] original copies, signed on this page and initialled on each other page, one original copy being provided to each Party. No word, figure or sign was crossed, invalidated, modified or added, either handwritten or by any means, between the printing and the signing of the original copies.

The Brand

On behalf of: _______________ [legal person]

Name of the signatory: _______________ [signatory duly authorized]

Title: _______________ [title or capacity of the signatory]

Date: _______________ [signing date]

Place: _______________ [place where the agreement is signed]

Signature:

The Distributor

On behalf of: _______________ [legal person]

Name of the signatory: _______________ [signatory duly authorized]

Title: _______________ [title or capacity of the signatory]

Date: _______________ [signing date]

Place: _______________ [place where the agreement is signed]

Signature:

Par Franck BEAUDOIN, Avocat

Avocat, président et fondateur de la société d’avocats FB JURIS, directeur de la publication des sites juridiques droit.co et idroit.co.

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