Business Contracts

Distribution

Distribution arrangements are common where a company wishes to expand into new markets or areas. They are lower risk than agency agreements and it is important that the difference between the appointment of an agent and a distributor is appreciated before engaging either.

Whilst an agent is engaged to negotiate on behalf of the company and is paid a commission for any sales made, a distributor buys products from a company and then sells them onto customers generally adding an additional margin to cover costs and profit. This often raises issues as to title to the product and the contractual liability of the distributor to both the original supplier and the final consumer.

Our Commercial Team can discuss the difference between agency and distribution with you to help you decide which is more suitable for your company and ensuring that you get a well drafted agreement that takes into account all the issues of title, liability and cost.