Distribution agreements operate on the principle that a company gives another company or another individual the right to resell its goods or services, assuming that the reseller meets certain conditions and does not represent the original distributor or the product itself. The distribution agreement does not allow the reseller to display or market the product in a manner it has chosen; Instead, it must sell in accordance with the distribution company`s guidelines. These guidelines could stipulate that the price is limited to a certain point or that the product must be sold with a limited warranty. For more information on agency and distribution agreements, please contact our commercial lawyers in Alconbury, Peterborough, Spalding, Nottingham or Birmingham. When it comes to trade deals, a key consideration is whether existing agency contracts or distribution agreements will be affected by Brexit. Read our guide below. It is also important, if you are thinking about the best way to market, sell or distribute your products, to be aware of the legal and practical difference between appointing an agent and a reseller. If your company wants to appoint agents or distributors, it is important that the paperwork is correct. An agency relationship is when one party (the agent) has the authorization of another party (the supplier) to receive orders from a third party (the customer) or to establish a legal relationship between the supplier and the customer. The difference lies in the fact that the agent acts in the name of the principle, whereas a trader probably acts in his own name, but has a contractual relationship with the principle of buying certain goods and marketing them directly under preservation prohibitions.
Agency contracts give agents much more power and responsibility. They are also generally much riskier for the client. Agents may take out and market a good or service on behalf of the contracting authority. You can also conclude distribution agreements and other contracts on behalf of the contracting authority, depending on the precise terms of the agency contract and the nature of the goods or services. This is useful for companies that have a new product or service and want to increase market awareness and turnover in new areas. One of the main differences is the lack of regulation in distribution contracts compared to agency contracts. Judgment 130/15 March 2011, based on doctrine and case law, shows that the most notable differences in these two contracts are: agency contracts and distribution agreements are a necessary part of the business, both in the UK and around the world. . . .