Sole Distributor Agreement

by Elizabeth Burns; Updated September 26, 2017

A sole distributor agreement gives a person or company the right to exclusively sell and supply a product on behalf of the person or company that manufactured it.

Significance

Only the person or company named in the agreement has the right to sell or supply a product. Such agreements usually involve a contract between the product’s manufacturers and the appointed distributor.

Features

Sole distributors take responsibility for any risks associated with selling a product, such as accidental breakage. Distributors make a profit by marking up the product they are selling, while manufacturers are freed of the responsibility of the administrative tasks involved in selling a product.

Considerations

Sole distributor contracts usually contain clauses that protect both parties. They may, for example, specify minimum sales targets or have confidentiality clauses. Manufacturers may also agree to provide distributors with initial training and this will usually be specified in the contract. Sometimes sole distributor agreements cover only a specific geographic region such as California, Oregon and Washington, for example.

About the Author

Based in Belfast, Northern Ireland, Elizabeth Burns began writing professionally in 1988. She has worked as a feature writer for various Irish newspapers, including the "Irish News," "Belfast News Letter" and "Sunday Life." Burns has a Bachelor of Arts in English literature from the University of Ulster as well as a Master of Research in arts.

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