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Distribution Agreement
I need a distribution agreement for a local distributor in Ireland to exclusively distribute our consumer electronics products. The agreement should include terms for minimum purchase requirements, territory exclusivity, and a 2-year initial term with options for renewal.
What is a Distribution Agreement?
A Distribution Agreement sets out the legal terms between a supplier and a distributor who will sell the supplier's products in specific markets. Under Irish commercial law, these contracts establish how products will be marketed, sold, and delivered across designated territories - from nationwide retail chains to local resellers.
The agreement spells out key business terms like pricing, minimum purchase requirements, and product quality standards. It also covers critical legal protections around intellectual property rights, liability limits, and termination conditions. Irish distributors often use these agreements to secure exclusive rights for particular regions while suppliers rely on them to maintain brand control and ensure proper product handling.
When should you use a Distribution Agreement?
Use a Distribution Agreement when expanding your product's reach through third-party sellers in Ireland. This is especially important when entering arrangements with retailers, wholesalers, or online marketplaces who will represent your brand and products to end customers.
The agreement becomes essential when you need to control how your products are sold, maintain quality standards, or protect your market position. Irish businesses particularly benefit from these agreements when granting exclusive territorial rights, setting sales targets, or establishing specific marketing requirements. It's crucial to have this in place before shipping your first product to avoid disputes over responsibilities and revenue sharing.
What are the different types of Distribution Agreement?
- Product Distribution Agreement: Basic template for single-product distribution relationships, covering essential terms and conditions
- Contract For Exclusive Distribution Rights: Grants sole distribution rights within specific territories or markets
- Distribution And Licensing Agreement: Combines product distribution with intellectual property licensing rights
- Agency And Distribution Agreement: Hybrid arrangement allowing distributor to act as both reseller and sales agent
- Master Distributor Agreement: Comprehensive agreement for distributors authorized to appoint sub-distributors
Who should typically use a Distribution Agreement?
- Manufacturers/Suppliers: Irish companies producing goods who need distribution channels to reach customers, typically drafting the initial agreement terms
- Distributors: Businesses that purchase and resell products, often investing in storage, logistics, and sales networks
- Commercial Lawyers: Legal professionals who review and refine Distribution Agreements to ensure compliance with Irish competition law
- Sales Directors: Key decision-makers who negotiate territory rights and sales targets
- Operations Managers: Responsible for implementing the agreement's practical requirements around storage, handling, and delivery
- Quality Control Teams: Monitor compliance with product standards and brand guidelines specified in the agreement
How do you write a Distribution Agreement?
- Basic Details: Gather company information, registration numbers, and authorized signatories for both supplier and distributor
- Product Scope: List all products covered, including specifications, quality standards, and packaging requirements
- Territory Rights: Define exact geographical areas or market segments for distribution
- Commercial Terms: Prepare pricing structures, minimum purchase quantities, and payment terms
- Performance Metrics: Outline sales targets, reporting requirements, and review periods
- Brand Guidelines: Document marketing restrictions and approved promotional materials
- Legal Compliance: Our platform ensures your agreement meets Irish competition law requirements and includes all mandatory elements
What should be included in a Distribution Agreement?
- Party Details: Full legal names, addresses, and company registration numbers of supplier and distributor
- Product Description: Detailed specifications, quality standards, and any relevant technical requirements
- Territory Rights: Clear definition of geographical areas or markets covered by the agreement
- Commercial Terms: Pricing, payment conditions, minimum purchase requirements, and delivery terms
- Duration & Termination: Agreement length, renewal options, and grounds for early termination
- IP Protection: Trademark usage rights, confidentiality obligations, and data protection provisions
- Competition Compliance: Clauses ensuring adherence to Irish and EU competition laws
- Dispute Resolution: Irish jurisdiction clause and agreed method for resolving conflicts
What's the difference between a Distribution Agreement and an Agency Agreement?
A Distribution Agreement differs significantly from an Agency Agreement in several key aspects under Irish law. While both involve selling products, their legal structures and relationships create distinct obligations and risks for the parties involved.
- Ownership Structure: Distributors purchase and resell products as independent businesses, while agents sell on behalf of the principal without taking ownership
- Financial Risk: Distributors carry inventory risk and set their own prices, whereas agents typically earn commissions on sales at principal-set prices
- Legal Protection: Agents enjoy significant statutory protections under Irish Commercial Agents Regulations, while distributors rely mainly on contract terms
- Control Level: Principals maintain more direct control over agents' activities and pricing, but distributors operate with greater independence
- Agency Agreement: Creates a principal-agent relationship with specific statutory obligations and protections, unlike the arms-length commercial relationship in distribution agreements
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