For technology owners, agency and distribution agreements can extend the reach of their business by harnessing the ability of third parties to promote and supply their products. To optimise their value:

  • The agreement needs to embody a clear and shared understanding of the roles and responsibilities of the stakeholders
  • Precise boundaries need to be drawn around territories, market sectors and product lines
  • Clear and measurable performance goals need to be included
  • Effective and graduated issues/dispute management and resolution processes should be agreed
  • Reporting requirements should be designed to provide the manufacturer/wholesaler/importer with all the information they require to manage the channel, without overburdening the agent/distributor
  • An agent/distributor can cause damage to the manufacturer/wholesaler/importer’s reputation, and even create legal liability for it … the agreement needs to manage these risks practically (by training clauses, limitations on marketing collateral, etc) and legally (by mandating good behaviours and proscribing bad ones, with particular attention to any industry-specific laws that are relevant)
  • Clearly identify which party owns the end customer, and limit the possibility of the non-owner poaching the customer base (eg when the agreement ends)
  • Allocate responsibility and provide for processes for customer carefully
  • Detail the financial arrangements between the parties in crystal clear terms
  • Provide for orderly wind down of the relationship in various circumstances
  • Ensure that all intellectual property is captured to its intended owner
  • Allocate risk and liability in a satisfactory way.

These kinds of agreements are not a ‘one size fits all’ solution. Cooper Mills has many years of experience in working with clients to design and create tailored agency and distribution agreements that provide certainty to all stakeholders. We also work with agents and distributors that need to negotiate agreements being proposed to them by upstream suppliers.

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Some of the clients we have worked with