Agency and Distribution Agreements
When running a business, it can often be useful to forge relationships with others who can help get your product to market or to procedure orders for your goods and services. This can be done in a number of ways, including through the appointment of a commercial agent or via entering a distribution agreement.
At IMD Solicitors, our commercial solutions team have a wealth of experience in drafting contracts for each type of arrangement, both here in the UK and abroad.
When might an agency or distribution arrangement be useful?
There are many circumstances in which an agency or distribution arrangement may be helpful to your business operations and ambitions for growth, including where you want to enter a foreign market and would find it useful to have a representative on the ground or where you need to increase the size and geographic reach of your sales team but do not have the resources to take on additional personnel.
Agency or distribution — what is the difference?
Under an agency arrangement, your appointed representative is engaged to do one thing and that is to secure you contracts. Once the contract has been agreed, the agent steps out of the picture and is left to you to deliver what has been promised.
This is in contrast to a distribution arrangement, under which your representative agrees to buy in what you produce and to then sell it on to their own customers with no further involvement expected from you.
In most cases, an agency arrangement is best suited to businesses who sell high-value, bespoke goods or who provide services that need to be personally delivered and a distribution arrangement is best suited to businesses who sell low-value, commoditized products in which no service element is required.
How can we help?
By drawing on our experience of working with a variety of organisations across a diverse range of sectors, including entertainment, IT and construction, our commercial contracts lawyers can help you to:
- consider the pros and cons of agency and distribution arrangements in order to decide where either are a good fit for your business needs and ambitions;
- explore alternative options, such as joint ventures, franchising or outsourcing arrangements and how these stack up when you take account of employment law considerations and the TUPE regulations;
- access whether it is in your interests to agree to any exclusivity rights over a particular geographic area or part of your product offering;
- carry out legal due dilligence to ensure your proposed business partner is capable and trustworthy; and
- negotiate terms for any proposed deal and draft the resultant agreement.
We can also help you to review existing arrangements to ensure they remain fit for purpose and assist you with the appointment of further agents or distributors in the event you find one or both of these models work well for you.
Why choose IMD Solicitors?
As an international firm, which operated across several offices spread throughout the UK and Europe, we know what it is like to put your trust in people from whom you are physically separated and who you have tasked with flying the flag for your brand.
As such, when you engage us to draft an agency or distribution agreement on your behalf you can rest assured that what we produce will be a contract tailored to your specific needs and which ensures your interest are fully protected.
You can also take comfort from the fact that we have an impressively fast turn around rate and in most cases we can prepare an agreement on your behalf for a fixed fee.
As a full-service law firm, we are not just here to support you when negotiating and entering these sorts of arrangements but also if you run into problems or want to bring an agreement to an end.
Working alongside our commercial dispute resolution team, we can provide advice on:
- the termination of a commercial agency or distribution arrangement;
- entitlement on the part of an agent to post-termination compensation;
- claims that a commercial agency or distribution agreement breaches competition and anti-trust rules;
- intellectual property disputes centred around the ownership of confidential information;
- the availability of an injunction to prevent an agent or distributor engaging in anti-competitive behaviour or otherwise breaching the terms of their agreement with you; and
- any other sort of commercial dispute arising out of your contractual arrangements.
List of notable commercial cases
- Advising one of the largest European banks on a number of occasions in respect of validity and construction of guarantees and on demand bonds, together with validity of agreements varying the guarantees and the underlying multi-million facility agreements.
- Advising on the establishment of a large entertainment company. Preparing various corporate and investment documents and leading extensive negotiations of shareholder agreement and ancillary documents. In addition, we provided various legal support to the company on on-going basis.
- Acting for a major automotive manufacturer in a joint venture with a UK company to commence production and distribution on the product in the UK and the Commonwealth. Negotiating and preparing all the relevant joint venture documents.
- Acting for the construction company in a large scale building project of circa £25m. Involved in negotiating an extensive JCT D&B contract as between our client (main contractor) and the local authority who were their client in this project.
- Drafting Terms & Conditions and Warranty terms for a leading UK manufacturer of steel doors, windows and partitions.
- Representing a sub-contractor in construction contract negotiations involving a large number of parties for construction of a museum in Kuwait.
- Advising on and drafting SaaS (Software as a Service) contract for the Client entering the UK market
- Advising on both pro-supplier and pro-customer Software Development Agreements for various Clients
- Advised a technology start up to set up and validate a messaging app, a direct competitor to Facebook’s Messenger
- Advising the client on and negotiating terms of corporate and personal guarantees tied to a cross-border commercial contract.
- Assisting a charity in preparation of various terms and conditions and contractual agreements.
- Advising the client on the terms of a joint venture agreement in an innovative waste management project.
- Advised the first Polish-owned bridging company in the UK
- Advising the client on the validity of execution of a number of international corporate finance agreements.