Distribution Agreement Solicitors
A distribution agreement is a contract under which a supplier appoints a distributor to buy its products and resell them in a defined territory or market, setting out exclusivity, pricing, targets, marketing obligations and termination rights.
call 0207 100 2525 to speak to a specialist today. Available 24/7
Adam Bernard Solicitors drafts distribution agreements for UK manufacturers, brand owners and international suppliers, and advises distributors on the terms they are offered.
Distribution is one of the fastest ways to enter a new market, but the relationship can be difficult to unwind if it goes wrong. A clear distribution agreement sets expectations from the start.
Call 0207 100 2525 or book a free consultation — via Zoom, Teams, WhatsApp or Skype
Distributor vs Commercial Agent
A distributor buys and resells products in its own name and takes the commercial risk; a commercial agent negotiates or concludes sales on the supplier’s behalf and is paid commission. The difference matters because commercial agents in Great Britain have statutory rights, including compensation or indemnity on termination, under the Commercial Agents (Council Directive) Regulations 1993. Distributors generally do not. Labelling the arrangement correctly in the contract, and reflecting it in practice, avoids unexpected claims.
Types of Distribution Agreement
- Exclusivedistribution–one distributor for a territory; the supplier agrees not to appoint
- Soledistribution – one distributor, but the supplier can also sell
- Non-exclusivedistribution – multiple distributors in the same
- Selective distribution – only distributors meeting set quality criteria may sell, common for luxury and technical goods.
Competition Law Rules for Distribution Agreements
Most contributor agreements use one of three models: full assignment, exclusive licence for a period, or non-exclusive licence.
Assignment suits content you will reuse indefinitely, such as course material or brand content.
Exclusive first-publication licence suits journalism, with rights reverting after a set period.
Non-exclusive licence suits guest blogs and podcasts where the contributor wants to reuse the material.
The agreement should cover editing rights, syndication, translation and use in marketing.
Moral Rights and Credit
Distribution agreements are vertical agreements, and most are lawful if they fall within the Vertical Agreements Block Exemption Order 2022, but certain hardcore restrictions are never permitted. Under the Competition Act 1998 and the Vertical Agreements Block Exemption Order 2022:
The block exemption generally applies where the supplier’s and buyer’s market shares are each 30% or less.
Resale price maintenance (fixing minimum resale prices) is a hardcore restriction.
Restrictions on passive sales into other territories are generally prohibited, while some active sales restrictions are allowed.
Non-compete obligations on distributors are generally limited to five years unless they fall within an exception.
The CMA’s VABEO guidance explains the rules, including online sales restrictions. The Order is currently due to expire on 31 May 2028.
Key Clauses in a Distribution Agreement
A distribution agreement should cover appointment, territory, products, supply terms, pricing, minimum targets, marketing, intellectual property, compliance and termination.
- Appointmentand exclusivity – territory, customer groups and any reserved
- Products– and the right to add or withdraw
- Supplyterms –ordering, delivery, title and risk, often by reference to sale and purchase terms.
- Minimumpurchase targets – and the consequences of missing them, such as loss of
- Marketingand brand use – trade mark licence and approval of
- Productcompliance – labelling, safety and regulatory
- Termand termination – including what happens to unsold stock and customer
International Distribution
Cross-border agreements should address governing law, currency, import and export responsibilities, customs, and the laws of the distributor’s territory. Some countries give distributors protection on termination, so local advice may be needed.
Distribution vs Wholesale vs Franchise
A distribution agreement appoints a reseller in a market. If you simply sell goods to trade customers on standard terms, see our wholesale supply agreement page. If the reseller will operate under your brand and business system, see franchise agreements.
Distribution Agreement Checklist for Suppliers
Before appointing a distributor, suppliers should confirm seven points.
- Theterritory and customer groups are clearly
- Exclusivityis linked to realistic minimum purchase
- Pricingand payment terms protect cash flow, including retention of
- Marketingobligations and brand guidelines are set
- Productliability, recall and compliance responsibilities are
- Thearrangement complies with competition
- Terminationand post-termination stock arrangements are
Distributors should check the same points from their side, particularly targets, exclusivity and what happens to their investment if the agreement ends.
Distribution Agreement Duration and Renewal
Most distribution agreements run for an initial term of one to five years with renewal options. A shorter initial term with performance-based renewal gives the supplier flexibility, while distributors investing heavily in a territory will want a longer term or compensation for early termination.
How Adam Bernard Solicitors Can Help
We draft distribution and agency agreements, review agreements offered to you through our contract review service, and carry out competition law checks. See all our commercial contract services.
Call 0207 100 2525 (24/7) or book a free consultation to discuss your contract.
This page is for information only and does not constitute legal advice.
Frequently Asked Questions
What is a distribution agreement?
What is the difference between a distributor and an agent?
Can a supplier fix the resale price charged by a distributor?
Can a distribution agreement be exclusive?
What happens to stock when a distribution agreement ends?
Request to book a Free Consultation
Our Clients Share Their Success Stories.
Good service 👍 👌 many thanks for the great service you have provided to us. Our visa got approved just within 2 weeks only because of your hardwork and subject matter expertise. I am very thankful to you
For me, it was the attitude towards the job the lawyers displayed. Totally unmatched. I've been in and out of law firms because of the divorce with my wife and other related issues but Adam Bernard Solicitors was it for me guys. The best!
I want to thank Adam Benard team, they really helped me in my process of purchasing a property, their team are listen and respond to their customers fast. I really love your service, thanks alot.
Adam Bernard team helped me to purchase the best property for the best amount of time for the best money i have . i personally love dealing with them and i thank the team for all the efforts they made to make the task better .
