CHECKLIST :

DISTRIBU TION AGREEMEN T

1. P a rt i es 2. Desc r i pt i o n o f p r o d u ct 3. Typ e o f d i str i b ut i o n 4. Ter m 5. Ter r it o r y 6. P r o m ot i o n 7. C o m p l i a n c e w it h L o c a l Re g u lat i o ns Who are the parties to this agreement? (individual, company or trust) Contact details Is the agreement to distribute: A selection of the suppliers products; All of the suppliers products. Is the distributorship to be: Non-exclusive; Exclusive. Can the agreement be assigned? Is the distribution agreement for: A fixed period; An indefinite period; Subject to sales figures. Where can the products be distributed: Everywhere; Defined territory; Only in specific markets/locations. Will the supplier be restricted from supplying products in the territory? What about online/web sales? Who is responsible for marketing and promotion? Will marketing and promotions costs be shared? Will a proportion of the sales profits be used for marketing and promotions? Who pays for, or supplies brochures and manuals? How are budgets agreed? Who is responsible for compliance with local regulations relating to: Safety; Labelling; Product liability;

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Created by Peter English, Surry Partners Lawyers, for the Australian Design Unit www.surrypartners.com.au Surry Partners Lawyers 2009

8. C o sts 9. F e e / P a y m e nt Te r ms 1 0. Or d e r P r o c e d u r e 1 1. Ow n e r sh i p / T itle a n d R isk 1 2. S u p p l i e rs Wa r r a nt i es

Import/export permits. Who is responsible for costs in relation to Sales; Warranty and service; Storage. What are the payment terms for the product? Is set-off and deduction available? How will orders be placed for the product? Is there any minimum quantity requirements? Product delivery location? When does title/risk pass to the distributor? Does the supplier retain ownership of the goods until sold by the distributor? Is the distributor insured for loss or damage? Warranties with respect to merchantable quality and fitness for purpose? Product testing? Warranties that the intellectual property rights in the product does not infringe third party rights? Who is responsible for after sales issues? Will the supplier indemnify the distributor for any injury resulting from the use of the product? Is product liability insurance available? Are there any minimum sales targets imposed? Can the distributor distribute competing products? Do the parties want an option for renewal? What criteria must be present before an option can be exercised? Is renewal automatic if pre-agreed sales targets are met?

13.

After S a les

1 4. 15. 1 6.

Sa les Ta r g ets C o m p et i n g P r o d u cts O pt i o n f o r R e n ew a l

1 7.

I n d e m n it y

What indemnities are to be provided by the parties? For example injury resulting from use of the product. Any other risk issues that may arise?

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Created by Peter English, Surry Partners Lawyers, for the Australian Design Unit www.surrypartners.com.au Surry Partners Lawyers 2009

1 8.

Disp ut es

How will disputes be resolved: In relation to payment? If theres a breach of the distribution agreement? Mediation and arbitration first resort? Who pays the costs or parties share equally? What jurisdiction can the disputes be heard in? How will the distribution agreement end? Can a party terminate without giving a reason? What happens if there is breach by either party? Will the parties be given an opportunity to remedy a breach? What happens if the agreement is terminated: Will the distributor be allowed to sell-off stock and for what period? What happens to confidential information? Is confidential information an agreed term? Will there be any restraint provisions after termination?

1 9.

Ter m i n at i o n

Disc la i m e r: This c he c k list c o nt a ins ge n e r a l inf o r m at i o n o n l y. It is n ot a n ex ha ustiv e c he c k list a n d is p r o p o se d as a g u id e o n l y. I t is n ot inte n d e d t o b e g iv e n as a d v ic e a n d sho u ld n ot b e r e l ie d u p o n as suc h. S u r r y P a r tne rs Lawye r s r e c o m m e n d s t hat pa rt ies t o a Distr i b ut i o n Agr e e m e nt o bta in spe c if ic a d v ic e f r o m a n e x pe r ie n c e d lawye r .

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Created by Peter English, Surry Partners Lawyers, for the Australian Design Unit www.surrypartners.com.au Surry Partners Lawyers 2009