Trakti Smart "Legal" Contracts Blog

This agreement allow an Agent to earn commission on sales of the Principal’s goods in a defined geographical area, territory or on exclusive or non-exclusive basis. Commercial Agents Regulations 1993 create certain duties and rights for those defined within the regulations as commercial agents in their respective EU countries. If it is intended that the parties do not have a relationship which falls within those regulations, this document should not be used. The agent acts on the supplier’s behalf. Although an agent may arrange sales, the sales contract will be between the supplier and the end customer, i.e. an end user of the product. This figure is different from the distributor who is, instead, a supplier’s customer. The distributor sells the product to their own customers.

A distribution agreement is an agreement under which a supplier of goods appoints an independent distributor to market them; he sells in his own name and for his own account. The Distributor shall be responsible for all advertising necessary to promote the Products within the Territory. It may be categorised as either exclusive or non-exclusive. In an exclusive distribution agreement, the supplier will grant to the distributor exclusivity over a particular territory and/or product line and/or sales channel. Unlike agents, distributors purchase products from the supplier and then resell them to customers on their own account, thereby taking control of pricing and the ensuing profit.