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A Value Added Reseller Agreement lets businesses legally resell products after adding their own enhancements or services. Think of a tech company that buys software, bundles it with custom features and support, then sells the improved package to end customers. The agreement sets the rules for this relationship, including pricing, territories, and branding requirements.

Under Canadian commercial law, these agreements protect both the original manufacturer and the reseller by clearly outlining intellectual property rights, warranty obligations, and liability limits. They're especially common in technology, manufacturing, and distribution sectors, where companies often customize or integrate products before reselling them to specific market segments.

Use a Value Added Reseller Agreement when you plan to enhance and resell another company's products to Canadian customers. This is crucial for businesses that customize software, add consulting services to hardware products, or bundle multiple products into comprehensive solutions. The agreement becomes essential before starting any value-added distribution activities.

The timing matters most when negotiating with major manufacturers or entering new markets. Canadian distributors need these agreements in place to protect their investment in product modifications, secure territorial rights, and maintain compliance with federal and provincial consumer protection laws. Having clear terms also helps avoid disputes about warranty coverage and support responsibilities.

• Reseller Software License: Focuses specifically on software distribution rights, including source code protection, update policies, and technical support obligations. Ideal for pure software resellers in the Canadian tech sector.
• Software License Reseller Agreement: More comprehensive agreement covering both software licensing and value-added services, including customization rights, integration services, and end-user support requirements. Better suited for full-service IT solution providers.

• Original Manufacturers: Companies that create products and authorize their resale, typically tech firms, software developers, or equipment manufacturers who want to expand their market reach through value-added channels.
• Value-Added Resellers: Businesses that enhance original products with additional features, services, or integrations before reselling them to end customers in Canadian markets.
• Corporate Lawyers: Draft and review these agreements to ensure compliance with Canadian distribution laws, intellectual property rights, and consumer protection regulations.
• End Users: Customers who purchase the enhanced products, protected by warranty terms and support obligations outlined in the agreement.

• Product Details: List all products or services being resold, including specifications, pricing tiers, and any customization limits allowed under Canadian law.
• Territory Rights: Define exact geographical boundaries for resale activities, considering provincial licensing requirements and local regulations.
• Value-Add Specifics: Document your planned enhancements, support services, and integration offerings that justify reseller status.
• Pricing Structure: Outline wholesale costs, suggested retail prices, and margin expectations while ensuring compliance with competition laws.
• Support Terms: Detail warranty coverage, technical support responsibilities, and service level commitments between all parties.

• Party Identification: Full legal names, addresses, and business numbers of manufacturer and reseller, plus authorized signatories.
• Product Scope: Detailed description of products, permitted modifications, and value-added services allowed under the agreement.
• Territory Rights: Clear geographical boundaries and any exclusive/non-exclusive distribution terms under Canadian law.
• Payment Terms: Pricing structure, payment schedules, and currency specifications compliant with Canadian banking regulations.
• Intellectual Property: Rights to trademarks, patents, and modifications, including protection under Canadian IP laws.
• Termination Clauses: Specific conditions for ending the agreement and post-termination obligations.

A Value Added Reseller Agreement differs significantly from an Agency Agreement, though both involve selling products on behalf of another company. The key distinctions lie in ownership, modification rights, and relationship structure under Canadian law.

• Product Ownership: Resellers purchase and own inventory outright, while agents never take ownership and simply facilitate sales for commission.
• Customization Rights: VARs have explicit rights to modify or enhance products before resale; agents must sell products as-is.
• Legal Liability: VARs assume direct responsibility for product modifications and customer relationships, while agents act purely as representatives of the principal company.
• Pricing Control: VARs set their own prices and margins after purchasing at wholesale rates; agents must follow the principal's pricing structure.