Distribution Agreement

comments before final execution.
7. Have this document reviewed by qualified legal counsel before use.

JURISDICTION: Universal (adapt to selected state)
LAST UPDATED: 2026-03-18
-->

DISTRIBUTION AGREEMENT

THIS DISTRIBUTION AGREEMENT (this "Agreement") is entered into as of [__/__/____] (the "Effective Date") by and between:

SUPPLIER:

DISTRIBUTOR:

TABLE OF CONTENTS

1. Recitals and Definitions
2. Appointment and Territory
3. Products and Pricing
4. Orders, Acceptance, and Delivery
5. Minimum Purchase and Performance Requirements
6. Inventory Management and Returns
7. Marketing, Promotion, and Channel Conduct
8. Antitrust Compliance
9. Branding and Intellectual Property
10. Warranties and Pass-Through
11. Product Liability and Indemnification
12. Anti-Diversion and Gray Market Provisions
13. Compliance Obligations
14. Confidentiality
15. Insurance
16. Limitation of Liability
17. Term and Termination
18. Effects of Termination and Wind-Down
19. Governing Law and Dispute Resolution
20. General Provisions
21. Signature Block
22. Schedules

1. RECITALS AND DEFINITIONS

1.1 Recitals

WHEREAS, Supplier manufactures or sources certain products described in Schedule 1 (the "Products"); and

WHEREAS, Supplier desires to appoint Distributor to purchase Products from Supplier and resell them within the Territory defined herein; and

WHEREAS, Distributor desires to accept such appointment and to distribute the Products in accordance with the terms of this Agreement;

NOW, THEREFORE, in consideration of the mutual promises contained herein, the Parties agree as follows:

1.2 Definitions

(a) "Authorized Channels" means the distribution channels identified in Schedule 5.

(b) "Minimum Purchase Commitment" means the minimum quantity or dollar value of Products that Distributor must purchase during each performance period, as set forth in Schedule 3.

(c) "Net Price" means the price set forth in Schedule 2, less any applicable discounts, credits, or rebates.

(d) "Products" means the goods described in Schedule 1, as amended from time to time.

(e) "Territory" means the geographic area defined in Schedule 5.

(f) "Trademark" means all trademarks, service marks, trade names, logos, and brand identifiers owned by Supplier.

2. APPOINTMENT AND TERRITORY

2.1 Appointment

Supplier hereby appoints Distributor as its:

☐ Exclusive distributor within the Territory for the Authorized Channels
☐ Non-Exclusive distributor within the Territory for the Authorized Channels
☐ Sole distributor (Supplier may sell directly but will not appoint other distributors)

2.2 Territory

The Territory is defined in Schedule 5 and includes: [________________________________]

2.3 Channel Restrictions

Distributor's appointment is limited to the following Authorized Channels:

☐ Retail (brick-and-mortar)
☐ E-commerce / Online
☐ Systems Integrators / VARs
☐ Wholesale / Subdistribution
☐ Government / Public Sector
☐ Other: [________________________________]

2.4 Reservation of Rights

Supplier reserves the right to: (a) sell Products directly to customers outside the Territory; (b) appoint other distributors outside the Territory; (c) sell directly to national or global accounts listed in Schedule 5, regardless of Territory; (d) modify Products, pricing, or territories upon [____] days' notice.

2.5 No Agency

Distributor is an independent contractor purchasing Products for its own account and reselling at its own risk. Distributor has no authority to bind Supplier, create obligations on behalf of Supplier, or represent itself as Supplier's agent.

3. PRODUCTS AND PRICING

3.1 Products

The Products covered by this Agreement are described in Schedule 1. Supplier may add or discontinue Products upon [____] days' written notice.

3.2 Pricing

(a) Wholesale prices are set forth in Schedule 2.

(b) Supplier may adjust prices upon [____] days' written notice. Adjusted prices apply to orders placed after the effective date of the adjustment.

(c) Price adjustments shall not apply to orders already accepted by Supplier.

3.3 Discounts and Rebates

Volume discounts, promotional rebates, and performance incentives are described in Schedule 2. All discounts shall be applied in a manner consistent with the Robinson-Patman Act (15 U.S.C. § 13).

3.4 Payment Terms

(a) Payment due within [____] days from date of invoice (Net [____]).

(b) Late payments accrue interest at [____]% per month or the maximum permitted by law, whichever is less.

(c) Supplier may require prepayment or letter of credit for initial orders or if Distributor's creditworthiness deteriorates.

3.5 Taxes

Distributor is responsible for all sales, use, VAT, and other taxes applicable to its purchase and resale of Products, excluding taxes based on Supplier's income.

4. ORDERS, ACCEPTANCE, AND DELIVERY

4.1 Purchase Orders

Distributor shall submit purchase orders via [________________________________] (e.g., electronic portal, email, EDI). Each order shall specify Product SKU, quantity, requested delivery date, and shipping destination.

4.2 Order Acceptance

Supplier may accept or reject orders in its reasonable discretion. Orders are binding only upon written acceptance by Supplier (or upon shipment, whichever occurs first).

4.3 Delivery Terms

(a) Delivery shall be ☐ FCA ☐ FOB Origin ☐ FOB Destination ☐ DDP ☐ Other Incoterm: [________________________________]

(b) Lead times: [____] days from order acceptance.

(c) Title and risk of loss pass to Distributor in accordance with the selected Incoterm.

4.4 Inspection and Acceptance

(a) Distributor shall inspect Products within [____] business days of receipt.

(b) Distributor shall notify Supplier in writing of any nonconformity within [____] business days of inspection. Failure to provide timely notice constitutes acceptance under UCC § 2-606.

(c) Supplier shall, at its option, repair, replace, or credit Distributor for confirmed nonconforming Products.

4.5 Shortages and Allocation

If Supplier is unable to fill all orders due to supply constraints, Supplier may allocate available inventory among its distributors and direct customers on a fair and equitable basis, consistent with UCC § 2-615 and antitrust requirements.

5. MINIMUM PURCHASE AND PERFORMANCE REQUIREMENTS

5.1 Minimum Purchase Commitment

Distributor shall purchase the following minimum quantities or dollar amounts during each performance period:

5.2 Performance Metrics

In addition to minimum purchases, Supplier may evaluate Distributor on:

☐ On-time payment rate (target: [____]%)
☐ Sales growth (target: [____]% year-over-year)
☐ Forecast accuracy (target: within [____]% of actual)
☐ Returns rate (target: below [____]%)
☐ Territory coverage (geographic penetration targets)
☐ Customer satisfaction scores
☐ Other: [________________________________]

5.3 Consequences of Failure

If Distributor fails to meet Minimum Purchase Commitments:

(a) Supplier may downgrade exclusivity to non-exclusive upon [____] days' notice;

(b) Supplier may reduce Territory upon [____] days' notice;

(c) If failure continues for [____] consecutive periods after notice and opportunity to cure, Supplier may terminate this Agreement per Section 17.

6. INVENTORY MANAGEMENT AND RETURNS

6.1 Inventory Requirements

Distributor shall maintain sufficient inventory to meet reasonably anticipated customer demand and shall provide inventory reports to Supplier on a [____] basis (monthly/quarterly).

6.2 Stock Rotation

Distributor may return up to [____]% of net purchases per quarter for credit, subject to:

(a) Products being in original, unopened, resalable condition;

(b) Advance authorization via Supplier's RMA process;

(c) Restocking fee of [____]% of invoice price;

(d) Freight costs borne by Distributor.

6.3 Dead-on-Arrival (DOA)

Products determined to be defective on arrival may be returned for full credit or replacement at Supplier's expense within [____] days of delivery.

6.4 Obsolete and Slow-Moving Inventory

(a) Supplier shall provide [____] days' advance notice of Product end-of-life or discontinuation.

(b) Distributor may return unsold end-of-life inventory within [____] days of discontinuation notice for credit at [____]% of the original purchase price.

6.5 Forecasting

Distributor shall provide Supplier with rolling [____]-month demand forecasts updated [____] (monthly/quarterly). Forecasts are non-binding but shall be prepared in good faith.

7. MARKETING, PROMOTION, AND CHANNEL CONDUCT

7.1 Marketing Obligations

Distributor shall use commercially reasonable efforts to promote and market the Products within the Territory, including:

(a) Maintaining trained sales personnel familiar with Product features and applications;

(b) Participating in Supplier-sponsored training programs;

(c) Attending trade shows and industry events as reasonably requested;

(d) Maintaining a professional online presence featuring the Products.

7.2 Advertising and Promotional Materials

(a) All advertising and promotional materials using Supplier's Trademarks must be approved in writing by Supplier prior to use.

(b) Distributor shall not make any false, misleading, or unauthorized claims regarding the Products.

7.3 Minimum Advertised Price (MAP)

☐ MAP Policy Applies: Distributor agrees not to advertise Products below the prices specified in Supplier's MAP policy (Schedule 6). The MAP policy applies to advertised prices only and does not restrict the actual resale price.

☐ No MAP Policy

7.4 Co-Op and Market Development Funds

Supplier may offer cooperative advertising or market development funds (MDF) as described in Schedule 3. MDF claims must be submitted with documentation within [____] days of the promotional activity.

7.5 No Bundling or Rebranding

Distributor shall not bundle Products with third-party products, rebrand, repackage, or alter Products without prior written consent.

8. ANTITRUST COMPLIANCE

8.1 Robinson-Patman Act Compliance

(a) Supplier represents that pricing, discounts, and promotional allowances offered to Distributor are available to all distributors similarly situated in terms of volume, creditworthiness, and services performed, in compliance with the Robinson-Patman Act (15 U.S.C. § 13).

(b) Supplier may offer different prices based on legitimate cost differences in manufacture, sale, or delivery, or to meet a competitor's price in good faith (15 U.S.C. § 13(a)-(b)).

(c) Distributor shall not knowingly induce or receive discriminatory prices in violation of 15 U.S.C. § 13(f).

8.2 Sherman Act and Clayton Act

(a) Nothing in this Agreement requires or authorizes Distributor to resell Products at any particular price. Distributor is free to determine its own resale prices.

(b) Exclusive dealing provisions, if any, are limited in scope and duration to avoid unreasonable foreclosure of competition, consistent with 15 U.S.C. § 14 (Clayton Act § 3).

(c) Neither Party shall enter into agreements with competitors to fix prices, allocate markets, or engage in group boycotts (per se violations of 15 U.S.C. § 1).

8.3 Tying Arrangements

Supplier shall not condition the sale of any Product on Distributor's purchase of other products, unless such arrangement is justified by legitimate business reasons and does not unreasonably restrain trade.

9. BRANDING AND INTELLECTUAL PROPERTY

9.1 Trademark License

Supplier grants Distributor a non-exclusive, non-transferable, revocable license to use the Trademarks solely for the purpose of marketing and distributing the Products within the Territory during the Term.

9.2 Trademark Usage Guidelines

Distributor shall use the Trademarks in accordance with Supplier's trademark usage guidelines (Schedule 7). Distributor shall not modify, alter, or create derivative marks. All goodwill generated through use of the Trademarks inures to Supplier's benefit.

9.3 No Reverse Engineering

Distributor shall not reverse engineer, decompile, disassemble, or otherwise attempt to derive the composition, structure, or proprietary technology of any Product.

9.4 Removal of Marks

Distributor shall not remove, alter, or obscure any product identification marks, serial numbers, UPC codes, or regulatory labels affixed to the Products.

10. WARRANTIES AND PASS-THROUGH

10.1 Supplier's Product Warranty

Supplier warrants that the Products, at the time of delivery, will: (a) conform to the specifications set forth in Schedule 1; (b) be free from material defects in materials and workmanship; and (c) be merchantable under UCC § 2-314.

10.2 Warranty Period

The warranty period is [____] months from the date of delivery to Distributor or [____] months from the date of sale to end customer, whichever occurs first.

10.3 Pass-Through Warranty

Distributor shall pass through Supplier's warranty to end customers without modification, addition, or expansion. Distributor shall not make any warranty representations beyond those expressly authorized by Supplier.

10.4 Warranty Disclaimer

EXCEPT AS EXPRESSLY SET FORTH IN THIS SECTION 10, SUPPLIER MAKES NO WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE. THIS DISCLAIMER IS CONSPICUOUS AND IS MADE PURSUANT TO UCC § 2-316.

10.5 First-Line Support

☐ Distributor shall provide first-line customer support and warranty claims processing
☐ Supplier handles all warranty claims directly
☐ Other arrangement: [________________________________]

11. PRODUCT LIABILITY AND INDEMNIFICATION

11.1 Supplier Indemnification

Supplier shall indemnify, defend, and hold harmless Distributor from and against any third-party claims, damages, losses, and expenses (including reasonable attorneys' fees) arising from:

(a) Product defects or failure to comply with applicable product safety laws;

(b) Infringement of third-party intellectual property rights by the Products;

(c) Breach of Supplier's warranties under Section 10;

(d) Supplier's negligence or willful misconduct.

11.2 Distributor Indemnification

Distributor shall indemnify, defend, and hold harmless Supplier from and against any third-party claims arising from:

(a) Distributor's unauthorized modification of Products;

(b) Distributor's breach of this Agreement, including sales outside the Territory or Authorized Channels;

(c) Unauthorized warranty representations;

(d) Distributor's negligence or willful misconduct;

(e) Distributor's failure to comply with applicable laws.

11.3 Indemnification Procedures

(a) Prompt written notice of any claim;

(b) Control of defense by the indemnifying Party;

(c) Reasonable cooperation by the indemnified Party;

(d) No settlement without the indemnifying Party's prior written consent.

12. ANTI-DIVERSION AND GRAY MARKET PROVISIONS

12.1 Prohibition on Diversion

Distributor shall not, directly or indirectly:

(a) Sell, transfer, or divert Products outside the Territory;

(b) Sell to purchasers that Distributor knows or has reason to know intend to resell outside the Territory;

(c) Remove, alter, or tamper with anti-diversion markings, serial numbers, or tracking codes;

(d) Participate in or facilitate gray market or parallel import activity.

12.2 Transshipment Controls

Distributor shall maintain records sufficient to demonstrate compliance with this Section 12, including customer identification, delivery destinations, and chain-of-custody documentation.

12.3 Remedies for Diversion

Diversion of Products constitutes a material breach. In addition to termination rights, Supplier may recover liquidated damages of [____]% of the diverted Products' net invoice value, or actual damages, whichever is greater.

13. COMPLIANCE OBLIGATIONS

13.1 Export Controls and Sanctions

Distributor shall comply with all applicable export control and sanctions laws, including: U.S. Export Administration Regulations (15 C.F.R. Parts 730-774), International Traffic in Arms Regulations (22 C.F.R. Parts 120-130), and OFAC regulations (31 C.F.R. Part 500 et seq.).

13.2 Anti-Corruption

Distributor represents and covenants that it will not, directly or indirectly, offer, promise, or make any payment or gift to any government official, political party, or candidate in connection with this Agreement, in violation of the Foreign Corrupt Practices Act (15 U.S.C. § 78dd-1 et seq.) or applicable local anti-corruption laws.

13.3 Record-Keeping

Distributor shall maintain accurate books and records related to its activities under this Agreement for at least [____] years. Supplier shall have the right to audit such records upon [____] days' notice, no more than [____] times per year.

14. CONFIDENTIALITY

14.1 Confidential Information

"Confidential Information" includes pricing, customer lists, business plans, technical data, marketing strategies, and any other information designated as confidential by the disclosing Party.

14.2 Obligations

Each Party shall: (a) hold Confidential Information in strict confidence; (b) not disclose to third parties except as authorized; (c) use only for purposes of this Agreement; (d) limit access to need-to-know personnel.

14.3 Duration

Confidentiality obligations survive for [____] years after termination.

14.4 Exceptions

Obligations do not apply to information that: (a) is or becomes publicly available without breach; (b) was independently developed; (c) was lawfully received from a third party; or (d) must be disclosed by law (with prompt notice to the disclosing Party).

15. INSURANCE

15.1 Distributor Insurance

Distributor shall maintain the following insurance during the Term:

15.2 Additional Insured

Supplier shall be named as an additional insured on Distributor's CGL and products liability policies.

15.3 Certificates

Distributor shall provide certificates of insurance upon request and within [____] days of any policy renewal.

16. LIMITATION OF LIABILITY

16.1 Cap

EXCEPT FOR BREACHES OF CONFIDENTIALITY, INDEMNIFICATION OBLIGATIONS, AND WILLFUL MISCONDUCT, NEITHER PARTY'S AGGREGATE LIABILITY UNDER THIS AGREEMENT SHALL EXCEED THE TOTAL AMOUNTS PAID OR PAYABLE BY DISTRIBUTOR TO SUPPLIER DURING THE TWELVE (12) MONTHS PRECEDING THE EVENT GIVING RISE TO THE CLAIM.

16.2 Exclusion of Consequential Damages

EXCEPT FOR BREACHES OF SECTION 12 (ANTI-DIVERSION), SECTION 13 (COMPLIANCE), AND SECTION 14 (CONFIDENTIALITY), NEITHER PARTY SHALL BE LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL, OR PUNITIVE DAMAGES, INCLUDING LOST PROFITS AND LOST BUSINESS OPPORTUNITIES, REGARDLESS OF THE THEORY OF LIABILITY.

17. TERM AND TERMINATION

17.1 Initial Term

This Agreement commences on the Effective Date and continues for an initial term of [____] years (the "Initial Term").

17.2 Renewal

☐ Automatic renewal for successive [____]-year terms unless either Party provides written notice of non-renewal at least [____] days before the end of the then-current term.

☐ Renewal by mutual written agreement only.

17.3 Termination for Cause

Either Party may terminate this Agreement upon written notice if:

(a) The other Party materially breaches and fails to cure within [____] days after written notice specifying the breach;

(b) The other Party becomes insolvent, files for bankruptcy, or makes a general assignment for creditors;

(c) The other Party violates Section 8 (Antitrust), Section 12 (Anti-Diversion), or Section 13 (Compliance).

17.4 Termination for Convenience

☐ Either Party may terminate without cause upon [____] days' written notice.

☐ Supplier only may terminate without cause upon [____] days' written notice.

☐ No termination for convenience.

17.5 Termination for Performance Failure

Supplier may terminate if Distributor fails to meet Minimum Purchase Commitments for [____] consecutive measurement periods after notice and opportunity to cure per Section 5.3.

18. EFFECTS OF TERMINATION AND WIND-DOWN

18.1 Sell-Off Period

Upon termination or non-renewal, Distributor shall have [____] days to sell remaining inventory of Products in the ordinary course of business (the "Sell-Off Period"). During the Sell-Off Period, the terms of this Agreement continue to apply.

18.2 Inventory Repurchase

☐ Supplier shall repurchase Distributor's remaining new, unopened, resalable inventory at [____]% of the original purchase price.

☐ No repurchase obligation.

18.3 Cessation of Trademark Use

Distributor shall immediately cease all use of Supplier's Trademarks upon expiration of the Sell-Off Period and shall remove or destroy all materials bearing the Trademarks.

18.4 Return of Confidential Information

Each Party shall return or destroy the other's Confidential Information within [____] days of termination and certify destruction in writing.

18.5 Outstanding Payments

All amounts due under this Agreement become immediately payable upon termination. Distributor's right to any accrued but unpaid rebates or credits is preserved.

18.6 Survival

Sections 8, 9, 10, 11, 12, 13, 14, 15, 16, and 19 survive termination.

19. GOVERNING LAW AND DISPUTE RESOLUTION

19.1 Governing Law

This Agreement is governed by the laws of the State of [________________________________], without regard to conflict-of-laws principles. UCC Article 2 applies to all transactions in goods under this Agreement.

19.2 Dispute Resolution

(a) Escalation. Disputes shall first be escalated to senior executives of each Party for good-faith negotiation for [____] days.

(b) Mediation. If unresolved, the Parties shall participate in mediation administered by [________________________________].

(c) Resolution:

☐ Arbitration: Binding arbitration administered by [________________________________], before a single arbitrator, in [________________________________]. The award is final and enforceable.

☐ Litigation: Exclusive jurisdiction in the state and federal courts located in [________________________________].

19.3 Prevailing Party Fees

The prevailing Party recovers reasonable attorneys' fees and costs.

19.4 Jury Waiver

TO THE FULLEST EXTENT PERMITTED BY LAW, EACH PARTY IRREVOCABLY WAIVES THE RIGHT TO TRIAL BY JURY.

20. GENERAL PROVISIONS

20.1 Notices

Written notices deemed delivered: (a) personally; (b) confirmed email; (c) one business day after overnight courier; (d) three business days after certified mail, return receipt requested.

20.2 Assignment

No assignment without prior written consent, except in connection with merger, acquisition, or sale of substantially all assets.

20.3 Force Majeure

No liability for delays or failures due to causes beyond reasonable control (including acts of God, war, terrorism, pandemics, government actions, labor disputes, natural disasters, supply chain disruptions), provided prompt notice and commercially reasonable mitigation. If force majeure continues for more than [____] days, the non-affected Party may terminate upon [____] days' notice. See UCC § 2-615.

20.4 Independent Contractor

Distributor is an independent contractor. Nothing creates a partnership, joint venture, employment, or agency relationship.

20.5 Entire Agreement

This Agreement and all Schedules constitute the entire agreement and supersede all prior agreements.

20.6 Amendments

Amendments require written instrument signed by both Parties.

20.7 Severability

Invalid provisions severed; remainder continues.

20.8 Waiver

Failure to enforce a provision is not a waiver of future enforcement.

20.9 Counterparts

May be executed in counterparts. Electronic signatures valid.

20.10 Order of Precedence

In case of conflict: (1) this Agreement; (2) Schedules; (3) purchase orders.

21. SIGNATURE BLOCK

IN WITNESS WHEREOF, the Parties have executed this Distribution Agreement as of the Effective Date.

SUPPLIER:

Signature: [________________________________]
Printed Name: [________________________________]
Title: [________________________________]
Date: [__/__/____]

DISTRIBUTOR:

Signature: [________________________________]
Printed Name: [________________________________]
Title: [________________________________]
Date: [__/__/____]

22. SCHEDULES

Schedule 1 — Products

Schedule 2 — Pricing, Discounts, and Rebates

Schedule 3 — Minimum Purchase Commitments and MDF

Schedule 4 — Warranty Terms

Schedule 5 — Territory and Channel Map

Schedule 6 — MAP Policy (if applicable)

Schedule 7 — Trademark Usage Guidelines

☐ Attached as separate exhibit
☐ Available at: [________________________________]

SOURCES AND REFERENCES

• 15 U.S.C. § 13 — Robinson-Patman Act
• 15 U.S.C. § 1 — Sherman Antitrust Act
• 15 U.S.C. § 14 — Clayton Act § 3
• U.C.C. Article 2 — Sale of Goods
• FTC Guide: Price Discrimination / Robinson-Patman Violations
• Leegin Creative Leather Products v. PSKS, Inc., 551 U.S. 877 (2007)