Agent Versus Distributor. Agent the agent may have

Agent Versus Distributor

Agent the agent may have authority to enter into contracts on behalf of the supplier; the contract for the sale of the products or supply of services will be between the supplier and the customer, with the agent acting as intermediary, the supplier controlling the price and other terms of supply to the customer; the agent will generally have no liability under the contract made on the supplier's behalf; the supplier, not the agent, will bear the risk of bad debts; and the agent will usually be remunerated by commission paid by the supplier.

Distributor the distributor has no authority to bind (i.e. incur contractual obligations on behalf of) the supplier; because there are two separate contracts for the sale of the products: - from the supplier to the distributor - from the distributor to the customer the distributor bears the risk of customers' bad debts (and the supplier's risk of bad debts is channelled into one debtor, i.e., the distributor); and the distributor is remunerated from the profit on the supply of the products to the customer.

Agency Agent - Principal

Fiduciary relationship The Agent must, at all times, act in the ‘best interests’ of the Principal; The Agent must not prioritize its interests over those of the Principal, i.e. avoid conflicts of interest when possible; The Agent must not disclose any confidential information about the Principal, unless otherwise authorized to do so; and The Agent must not misuse any of the Principal’s money or property in its capacity as Agent.

Distribution relationship Principal – Distributor - Customer

Types of distributorship arrangement Exclusive distributorship Sole distributorship Non-exclusive distributorship Selective distributorship

Agency Agreement Checklist 1. Parties 2. Definitions 3. Scope of the Appointment 4. Duration of the Agreement 5. Responsibilities of the agent

Agency Agreement Checklist 6. Responsibilities of the Supplier 7. Supply of products/services 8. Commission 9. Intellectual Property rights (patents, trade marks, etc) 10. Reservations of the Supplier 11. The Supplier's right to terminate the Agreement

Agency Agreement Checklist 12. Consequences of Termination 13. Choice of Law, Submission to the Jurisdiction and Address for Service 14. Whole Agreement Provision 15. No Joint Venture or Partnership 16. General Provisions

Distributorship Agreements Checklist 1. Parties 2. Definition 3. Scope of Appointment 4. Duration of the Agreement 5. Terms of Sale of Products from Supplier to Distributor

Distributorship Agreements Checklist 6. General Obligations on Distributor 7. Advertising 8. Intellectual Property Rights 9. Technical Support and Confidentiality 10. Reservations of the Supplier 11. The Supplier's Right to terminate the Agreement

Distributorship Agreements Checklist 12. Consequences of Termination 13. Choice of Law, Submission to the Jurisdiction and Address for Service 14. Whole Agreement Provision 15. No Joint Venture or Partnership 16. General Provisions