Distributor Agreement - India

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Distributor Agreement for use in India.

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This kit includes tools and guidelines to assist you in drafting a Distributor Agreement.

A Distributor Agreement governs the relationship between a manufacturing firm, sole selling agent of a company. It is the common feature of the manufacturing operations of the industrial concerns that distributors or resellers are appointed to sell the manufactured goods. It is because of this that Distributor Agreements are invariably considered a integral element to demarcate the contours of relations.

Distributors may be either exclusive (where there will be no other distributors in the territory or the geographic area) or nonexclusive (where new distributor might be one of several distributors franchised in the territory).

Among others, this form includes the following key provisions:
  • Supplier/manufacturer's conditions of supply
  • Exclusive and Non-exclusive status of the distributor
  • Restrictions on distributor selling competitive products
  • Restrictions on distributor selling outside the agreement
  • Duration and termination conditions
  • Causes of termination and matters after termination
  • Responsibilities and covenants of distributors with respect to storage, minimum quotas, transportation, etc.
  • Appropriate legal provisions, warranties and exclusions
  • Use of trademarks and restrictions
  • Ways of tackling frequent price changes, minimum quotas of sale, etc
  • After sales services to customers
  • >
This attorney-prepared Distributor Agreement packet contains:
  1. Description and Instructions for Distributor Agreement
  2. Distributor Agreement for use in India
Law Compliance: This form is designed for use in India.
This is the content of the form and is provided for your convenience. It is not necessarily what the actual form looks like and does not include the information, instructions and other materials that come with the form you would purchase. An actual sample can also be viewed by clicking on the "Sample Form" near the top left of this page.
 
 
Distributor Agreement
(India)

 

 
THIS DISTRIBUTORAGREEMENT (this “Agreement”) made at _____on this ____day of______200_ between M/s .______ a partnership firm [company] having its principal office at __________________________________ (hereinafter referred to as "Company", [OR may be referred to as “Manufacturer” etc.] which expression shall unless repugnant to the context, be deemed to include the partners for the time being and from time to time constituting the said partnership firm, the survivor of them, the legal representatives, heirs, executors and administrators of such last survivor) of the ONE PART and M/s____________ proprietor Shri ______________ (hereinafter called "the Distributor" which expression shall unless repugnant to the context, be deemed to include his heirs, administrators, executors, legal representatives, successors and assigns) of the OTHER PART.
WHEREAS Company are the sole selling agents of _________________ Ltd. (the “Client”), for the whole of India and under the Agreement dated ____________________ executed between ___________ Ltd. and Company, Company are entitled to appoint agents, distributors for marketing the Products of ____________________ Ltd. (the “Products”).
[WHEREAS, Company is engaged in the manufacturing of _______________________].
WHEREAS Company have agreed to appoint M/s __________________ as their distributor and Distributor hereby agrees to accept the offer to be the [non] exclusive distributors to sell the Products in the Territory.
NOW IT IS HEREBY AGREED BETWEEN THE PARTIES AS UNDER:1. Distribution Right. The Company hereby appoints and grants Distributor the [non] exclusive and non-assignable right to sell the Products set forth in Exhibit "A" attached hereto.  The distribution right shall be limited to customers who have places of business in, and will initially use the Company's Products in the Territory set forth in Exhibit "B" attached hereto. [Add If Exclusive Distributor:  Manufacturer shall not directly or indirectly sell or offer to sell any of the Products in the Territory to any third party. In the event Manufacturer receives requests for information relating to, or purchase orders for, Products from customers or potential customers within the Territory, Manufacturer shall promptly forward such requests or orders to Distributor. Distributor shall have the right to appoint sub- distributors at its discretion]. [Add if Non-Exclusive: The Company at its own discretion may appoint new Distributors in the Territory OR revoke this distributorship.]
 
2. Duration of Agreement.
 
a.   This Agreement shall be valid with effect from _______________ or date of the approval of the distributorship, till it is revoked in writing by the Company. The notice by registered post/courier shall be constituted as effective revocation for this purpose.
 
b. The Distributor would be entitled to represent to third parties that he is owner of the Products supplied by the Company only for the purpose of enabling it to sell the Products. The Company shall have the final decision with regard to    ascertain the amounts which may be payable to the Company at any point of time by the Distributor.   
 
3. Infrastructure.
 
a. The Distributor has represented and assured to the Company, about the ownership/availability of a [showroom/outlet/warehouse] and other existing infrastructure facilities which are available with Distributor and which shall be utilised in marketing and selling the Products, during the currency of this agreement.
 
b. The Distributor has assured that the Products of the Company shall be prominently displayed in the Showroom, as per the guidelines and/or instructions given by the Company from time to time; however, under no circumstances the Distributor will give more prominence to the Products belonging to the competitors.
 
c. The Distributor shall be responsible for the rent and other expenses of the showroom and warehouse occupied by him for the purpose of agency business. He shall at his own expense keep insured the company's Products for full value against all risks. Company may inspect the receipts for the rent, rates and taxes of the showroom and godown/warehouse and for the premium of insurance policies. Company will not be liable or responsible for the expenses relating to or incidental to the said agency.
 
d. The Distributor shall hold all assets provided by the Company in good condition on trust and shall return the assets on termination of distributorship.  In case of damage to assets of the Company, Company at its own discretion can deduct/adjust/recover the cost of assets so damaged.
 
4.  Prices; Expenses.
 
a. The Distributor shall not charge the Customer more than the maximum retail price as mentioned on the Products on the attached “Price List” (in Exhibit C).  However, the Distributor may charge a price below the maximum retail price up to such limits as set forth in Exhibit C.  The Company shall make provision of the Distributor margin in the retail price.
 
b. All expenses incurred by the Distributor, for the services rendered, shall be borne by them and not the Company.
 
c. The Distributor shall be liable to make the payments to the Company for the value of the Products purchased within such time, as may be noticed/announced by the Company, as per the provisions of the credit policy of the Company, which may be announced from time to time.
 
d. Company has the final discretion to evaluate the performance of the Distributor and all payments to the Distributor are linked to their performance as per the targets that may be given by the Company from time to time.  In case the Distributor does not perform as per the targets set by the Company, the Company may at its own sole discretion terminate the distributorship without assigning any reasons for such termination [or terminate the exclusive distributorship status].
 
e. The Company shall not entertain any claims from the Distributor over the prices or for any schemes other than the ones specifically intimated in writing to the Distributor or set forth in Exhibit C.
 
 
5. Responsibilities & Liabilities of the Distributor. Following are the responsibilities of the Distributor. The Company may define such additional responsibilities and liabilities on the Distributor as may be required from time to time.
 
a. The Distributor shall promptly pay all amounts as may be outstanding against the invoices that may have been raised by the Company and acknowledged by the Distributor.  Unless expressly provided by the Distributor, the Company shall have the absolute right to adjust the payments received from the Distributor towards satisfaction of interest on delayed payments, penalty, damages OR the invoice value as may deemed proper by the Company. Each invoice made by the Company and acknowledged by the Distributor shall constitute a valid contract as per the Indian Contract Act 1872 or any other rules and regulations.
 
b. The Distributor shall adopt all measures to enhance the sale of the Company's Products to achieve/exceed the targets as may be communicated by the Company from time to time.
 
c. The Distributor shall keep the record of all sales whether sold on cash or credit basis. The Distributor shall also be required to send such reports as may be required from time to time by the Company.
 
d. In case of delay in payments beyond the standard credit terms allowed by the Company, the Distributor, in addition to the sums due shall be liable to pay interest of __% per month on the sums due and outstanding.
 
e. The Distributor shall be liable to pay the price of Products purchased on credit from the Company as well as other dues of the Company in accordance with the instructions/policies framed by the Company from time to time. The Company shall have lien and first charge on all unsold Products lying with the Distributor.  If the Company so desires, it may, at its discretion take back or cause to be taken back the unsold Products/stock lying with the Distributor. The unpaid price of the Products supplied by the Company to the Distributor shall remain in trust with the Distributor till the same is paid to the Company.  Any refusal, failure or inability to pay the dues of the Company for any reason whatsoever shall tantamount to misappropriation and breach of trust. In such event the Distributor shall be liable to face civil and criminal consequences at the costs of the Distributor.
 
f. The Distributor shall provide service to the customers of the Company in the Territory and such other places as may be directed by the Company from time to time. However, nothing stated herein shall prejudice the right of the Company to directly affect supply in the Territory or cause other agencies to affect such supplies in the Territory.
 
g. The Distributor shall prominently display the Products inside the Outlet as per the instructions of the Company from time to time.
 
h. The Distributor shall be liable for all compliance under any local law, control orders and state government rules and shall take all necessary steps for obtaining registrations, licenses and renewals thereof, maintaining proper registers and also submitting necessary returns to the authorised agencies. In the event of any contravention by the Distributor of the provisions thereof, the Distributor shall remain fully liable and shall also keep the Company indemnified against any breach and monetary liability or cost arising thereof.
 
i. The Distributor shall keep the Company posted with the latest market developments and customer preferences and other information as desired by the Company.
 
j. The Distributor shall not sell the Products directly or indirectly outside the Territory. The Distributor while selling the company's Products to persons in trade shall obtain undertaking in writing that the company's Products shall not be re-sold outside the district agency and the said Products shall not be re-sold to the public below the fixed retail price.
 
k. Distributor will not represent or distribute during the term of this Agreement any Products which, in Company's opinion, compete, directly or indirectly, with the Products. Exhibit D contains a list of Products which, as of the Effective Date, compete with Company Products. Upon thirty (30) days prior written notice to Distributor, Company may, at its sole discretion, update or modify the list specified by Exhibit D at any time during the term of this Agreement.
l. Distributor is personally responsible for all income taxes due to any earnings from selling the Products. All Products delivered to the Distributor will bear Value Added tax (VAT) and any other taxes / levies whenever required and applicable from time to time. Distributors are responsible to meet the Sales Tax on product purchase as per VAT.
6. Distributor Covenants. Distributor covenants that Distributor shall:
 
a. conduct business in a manner that reflects favourably at all times on Company Products and the good name, good will and reputation of Company;
 
b. avoid deceptive, misleading or unethical practices that are or might be detrimental to Company, Company Products or the public;
 
c. make no false or misleading representations with regard to Company or Company Products;
 
d.  not publish or employ, or cooperate in the publication or employment of, any misleading or deceptive advertising material with regard to Company or Company Products; and
 
e.  make no representations, warranties or guarantees to customers or to the trade with respect to the specifications, features or capabilities of Company Products that are inconsistent with the literature distributed by Company.
 
 
7. Storage & Documentation
 
a. The Distributor will ensure that the Products are stored carefully and arrange to protect/guard the Products against theft, damage, fire, flood, burglary and other hazards and also damage due to handling and storage, water logging, combustible materials, acids and explosives etc. The Company shall not be liable to take back the stock of Products, which have been damaged due to the negligence/carelessness of the Distributor. The Distributor shall forthwith make payment of such stock to the Company without prejudice to damage/deterioration in the value of the Stock.
 
b. The Distributor shall insure the Products in its custody and control against all risks including but not restricting to risks against riots, strike, hurricane, typhoon, and wilful damage.
 
c. The Distributor shall be responsible for the inspection of the Stocks of Products when they are transported to Distributors storage. The Distributor shall issue a format acknowledgement as may be required from time to time by the Transport Contractor/ Agency and also issue Products inward advice to the Factory/ Office of the Company in a proforma as may be prescribed by the Company.  Any discrepancies found in the Products received and the details given on the invoice should immediately be brought to the notice of the Company in writing by the Distributor but in any case not later than two weeks from the date of their receipt by the Distributor.
 
d. The Distributor shall make payments to the Transport Contractor/Advertisement, Hoarding bills etc. and shall remain liable to deduct & deposit the tax at source under the Income Tax Act 1961 and to comply with all other related statutory compliance. The Distributor shall at the time of seeking reimbursement, produce evidence of complying with the formalities.
 
e. The Distributor shall be responsible for the maintenance of the stock of the Products purchased from the Company. The Company shall be entitled to depute the authorised representatives to verify the stocks of the Distributor. The Distributor shall extend all necessary facilities and cooperation to the representatives of the Company taking the inventory of the Products.
 
f. The Distributor shall not have any right to unilaterally return the Products, which has been sold by the Company.  The Company shall, however, have a right to repossess the Products in case the payments are due from the Distributor.
 
8. Manpower & Utilities.
 
a. The Distributor shall employ its own manpower in order to fulfil his obligations and duties, which shall arise out of this Agreement. The Distributor shall be responsible for payment of wages/salary to such manpower appointed by them and to comply with all statutory rules and regulations governing the employment. They shall keep the Company harmless and indemnified against any legal action, loss, claim or damages arising from negligence or breach of any rules and regulations.
 
b. The Distributor shall engage the services of adequate number of staff for diligent performance of the duties enumerated herein as may be specified by the Company from time to time.
 
c. It is expressly understood that such employees are those of the Distributor and the Company shall not be responsible for any act by such employees. Company shall not be liable for payment of any compensation/damages due to death/full or partial disability caused to any of distributors employees.
 
 
9. Records & Invoicing
 
a. The Distributor shall maintain complete and up-to-date accounts of all the Products purchased and sold by the Distributor to the customers of the Company, and shall maintain/send such records/reports as may be prescribed by the Company. Such records and information shall be open to inspection by the representatives of the Company and they will be entitled to take photocopies of the Accounts or any part thereof.
 
b. The Company shall have a right to alter/vary the retail price of its Products from time to time without prior intimation to the Distributor. In case of un-executed orders, the prices at the time of execution shall be applicable.
 
c. __________________________________________________ [Additional provisions]
 
10. Liability
 
a. The Distributor shall be liable for all losses, damages, shortages of the Products by reason of any act of omission or commission on its part or its employees, representatives while the Products are in the custody and/or control of the Distributor.
 
b. All taxes (Central or State/Local), levies, impositions, octroi and duties, which may be assessed on the Company in respect of the sale of the Company's Products or levied on the said sales shall be borne by the Distributor. The Distributor shall keep the Company indemnified against any taxes, claims, demands, proceedings, costs, charges and expenses in respect of such impositions, taxes, levies & duties.
 
c. The Distributor shall remain liable to pay to the Company all amounts that may be due on outstanding to the Company prior to the commencement of this agreement.
10. Commissions.
The Distributor shall be entitled to _______per cent commission on the retail price of the Products realised on the basis of accounts maintained by him.
11. Trademarks, Trade Names, Logos, Designations and Copyrights.
 
During the term of this Agreement and subject to the terms and conditions specified herein, Company grants to Distributor a nonexclusive, non-transferable, limited licence to use, in the Territory, Company's trademarks, trade names, logos and designations only as necessary for Distributor to fulfill its obligations hereunder. Distributor's use of such trademarks, trade names, logos and designations will be in accordance with Company's policies in effect from time to time. Changes to this trademark use policy that Company in its sole discretion will specify, shall be effective upon thirty (30) days' written notice to Distributor. Distributor agrees not to attach any additional trademarks, trade names, logos or designations to any Company Product.  Distributor further agrees not to use any Company trademark, trade name, logo or designation in connection with any non-Company Product. Company reserves the right to review planned uses of its trademarks, trade names, logos and designations to confirm that they are within the guidelines, prior to usage of such trademarks by Distributor.
 
 
12. Sub-Distributors
 
The Distributor may appoint such sub-distributors as he deems fit and necessary. Each such sub-distributor appointed by the Distributor, and their directors, partners, employees and agents, to the extent required or necessary, shall have the necessary qualifications, approvals or licenses required to act in such capacity. The Distributor will oversee the activities of the sub-distributors and will responsible for the activities of the sub-distributors. Further, the Distributor shall indemnify the Company for any and all costs, expenses, losses and damages that they may incur due to the negligence, willful default or fraud or any other act or omission of the sub-distributor.
13. Commissions.
The Distributor guarantees a minimum sale of the value of Rs.______ per year. In case, the sale fails short by 25% or more for consecutive two years, Company may terminate this agreement.
14. Independent Contractors. Distributor is an independent contractor and is not the legal representative or agent of Company for any purpose and shall have no right or authority (except as expressly provided in this Agreement) to incur, assume or create in writing or otherwise, any warranty on the part of Company. Company shall not exercise any control over any of Distributor's employees, all of who are entirely under the control of Distributor. Distributor shall be responsible for the acts and omissions of Distributor's employees. Nothing contained in this Agreement shall be deemed to create any partnership or joint venture relationship between the parties.
 
15. Termination of Agreement.
a. Any of the Parties may terminate this agreement by serving a notice of ____(__)  months to the other Party. The accounts between the Parties will be settled and adjusted finally within the aforesaid period of ____(__) months.
b. In the expiry or earlier determination of this Agreement, the Distributor shall forthwith deliver to Company all the unsold stock of Products, all books of account and other documents of agency to Company and shall pay to Company for the shortage or deficiency of stocks at list prices less commission allowed to the Distributor.
c. Notwithstanding anything contained to the contrary herein, the Company shall be entitled to terminate forthwith this agreement with immediate effect upon the happening of one or more of the following events:
 
   i) Should the Distributor in the opinion of the Company become incapable of performing the obligations of this Agreement and the duties thereunder or its position, at any time be such, which in the sole discretion of the Company, render it inexpedient for it to continue to act as Distributor.
 
   ii) The Distributor acts in a manner prejudicial to the interest of the Company. The Company shall be the sole judge in this regard.
 
   iii) The Distributor commits a breach of any of the provisions of this Agreement and fails to cure the same within the cure period of _____(__) days after a written notice from the Company.
 
iv) If there is any change in the constitution, ownership, control or composition of the Distributor, unless such change or alteration has been agreed to by the Company in writing.
 
d. The termination of this agreement shall not discharge, affect or otherwise modify the rights and obligations of the parties established or incurred prior to the termination thereof.
 
16. Miscellaneous.
 
a. No terms and conditions of this Agreement shall be assigned, changed, modified or waived in any way without mutual written consent of the parties hereto duly signed by authorised representatives.
 
b. The Company shall not be deemed to have waived their rights nor the Distributor exonerated from its obligations from the failure of the Company to enforce strict observance of the terms of the Agreement by the Distributor.
 
c. Unless otherwise expressly agreed to in writing, all supplies of Company's Products shall be against cash on delivery or on negotiation of documents of title against payment through a Schedule Bank, as per the choice of the Company or as per the terms declared from time to time.
d. The rights under this agreement shall not be assigned or transferred to any other person, except with the prior permission of Company in writing.
e. This Agreement shall be executed in duplicate. The original it shall be retained by Company and the duplicate by the Distributor.
17. Governing Law; Disputes. This Agreement and the rights and obligations of the Parties hereunder shall, be construed in accordance with and be governed by the courts of _____________, in the State of ______________, India. In the event of disputes, differences, claims and questions between the parties hereto arising out of this Agreement or in any way relating hereto or any term, consultation or provision herein mentioned or the construction or interpretation thereof or otherwise in relation hereto, the parties shall first endeavor to settle such differences, disputes, claims or questions by friendly consultation. In the event of failure of parties to resolve by friendly consolation the dispute, the disputes, differences, claims and questions between the Parties hereto arising out of this Agreement or in any way relating hereto or any term, condition or provision herein mentioned or the construction or interpretation thereof or otherwise shall be referred to arbitration.  The proceedings held by the arbitrator in making the award will be in accordance with the provisions of Indian Arbitration and Conciliation Act, 1996 or any statutory modification thereof. The award of the arbitrator shall be final and binding on the parties.
18. Force Majeure. None of the parties will be liable for delay in performing any of its obligations under this Agreement or for failure to perform any of its obligations under this Agreement caused by events beyond its reasonable control including, without limitation, any act of God, flood, earthquake, fire, explosion, accident, war, terrorism, civil disorder, labor dispute, act of Government or regulatory authority, power failure or any similar event (each a “Force Majeure Event”) and in the event of a Force Majeure Event, each party will continue to use all reasonable endeavors to perform its obligations under this Agreement.
IN WITNESS WHEREOF the parties hereto have set their respective hands to these presents and the duplicate hereof on the date, month and year hereinabove written.
Signed and delivered by M/s..…........ the within named Principals by their partners
Signed and delivered by the within named Distributor by their proprietor Shri ..........
WITNESSES;1.
2.
EXHIBITS
Products List- Exhibit "A"
Territory -Exhibit "B"
Price List -Exhibit “C
Competing Products - Exhibit “D
Number of Pages11
DimensionsDesigned for Letter Size (8.5" x 11")
EditableYes (.doc, .wpd and .rtf)
UsageUnlimited number of prints
Product number#33466
This is the content of the form and is provided for your convenience. It is not necessarily what the actual form looks like and does not include the information, instructions and other materials that come with the form you would purchase. An actual sample can also be viewed by clicking on the "Sample Form" near the top left of this page.
 
 
Distributor Agreement
(India)

 

 
THIS DISTRIBUTORAGREEMENT (this “Agreement”) made at _____on this ____day of______200_ between M/s .______ a partnership firm [company] having its principal office at __________________________________ (hereinafter referred to as "Company", [OR may be referred to as “Manufacturer” etc.] which expression shall unless repugnant to the context, be deemed to include the partners for the time being and from time to time constituting the said partnership firm, the survivor of them, the legal representatives, heirs, executors and administrators of such last survivor) of the ONE PART and M/s____________ proprietor Shri ______________ (hereinafter called "the Distributor" which expression shall unless repugnant to the context, be deemed to include his heirs, administrators, executors, legal representatives, successors and assigns) of the OTHER PART.
WHEREAS Company are the sole selling agents of _________________ Ltd. (the “Client”), for the whole of India and under the Agreement dated ____________________ executed between ___________ Ltd. and Company, Company are entitled to appoint agents, distributors for marketing the Products of ____________________ Ltd. (the “Products”).
[WHEREAS, Company is engaged in the manufacturing of _______________________].
WHEREAS Company have agreed to appoint M/s __________________ as their distributor and Distributor hereby agrees to accept the offer to be the [non] exclusive distributors to sell the Products in the Territory.
NOW IT IS HEREBY AGREED BETWEEN THE PARTIES AS UNDER:1. Distribution Right. The Company hereby appoints and grants Distributor the [non] exclusive and non-assignable right to sell the Products set forth in Exhibit "A" attached hereto.  The distribution right shall be limited to customers who have places of business in, and will initially use the Company's Products in the Territory set forth in Exhibit "B" attached hereto. [Add If Exclusive Distributor:  Manufacturer shall not directly or indirectly sell or offer to sell any of the Products in the Territory to any third party. In the event Manufacturer receives requests for information relating to, or purchase orders for, Products from customers or potential customers within the Territory, Manufacturer shall promptly forward such requests or orders to Distributor. Distributor shall have the right to appoint sub- distributors at its discretion]. [Add if Non-Exclusive: The Company at its own discretion may appoint new Distributors in the Territory OR revoke this distributorship.]
 
2. Duration of Agreement.
 
a.   This Agreement shall be valid with effect from _______________ or date of the approval of the distributorship, till it is revoked in writing by the Company. The notice by registered post/courier shall be constituted as effective revocation for this purpose.
 
b. The Distributor would be entitled to represent to third parties that he is owner of the Products supplied by the Company only for the purpose of enabling it to sell the Products. The Company shall have the final decision with regard to    ascertain the amounts which may be payable to the Company at any point of time by the Distributor.   
 
3. Infrastructure.
 
a. The Distributor has represented and assured to the Company, about the ownership/availability of a [showroom/outlet/warehouse] and other existing infrastructure facilities which are available with Distributor and which shall be utilised in marketing and selling the Products, during the currency of this agreement.
 
b. The Distributor has assured that the Products of the Company shall be prominently displayed in the Showroom, as per the guidelines and/or instructions given by the Company from time to time; however, under no circumstances the Distributor will give more prominence to the Products belonging to the competitors.
 
c. The Distributor shall be responsible for the rent and other expenses of the showroom and warehouse occupied by him for the purpose of agency business. He shall at his own expense keep insured the company's Products for full value against all risks. Company may inspect the receipts for the rent, rates and taxes of the showroom and godown/warehouse and for the premium of insurance policies. Company will not be liable or responsible for the expenses relating to or incidental to the said agency.
 
d. The Distributor shall hold all assets provided by the Company in good condition on trust and shall return the assets on termination of distributorship.  In case of damage to assets of the Company, Company at its own discretion can deduct/adjust/recover the cost of assets so damaged.
 
4.  Prices; Expenses.
 
a. The Distributor shall not charge the Customer more than the maximum retail price as mentioned on the Products on the attached “Price List” (in Exhibit C).  However, the Distributor may charge a price below the maximum retail price up to such limits as set forth in Exhibit C.  The Company shall make provision of the Distributor margin in the retail price.
 
b. All expenses incurred by the Distributor, for the services rendered, shall be borne by them and not the Company.
 
c. The Distributor shall be liable to make the payments to the Company for the value of the Products purchased within such time, as may be noticed/announced by the Company, as per the provisions of the credit policy of the Company, which may be announced from time to time.
 
d. Company has the final discretion to evaluate the performance of the Distributor and all payments to the Distributor are linked to their performance as per the targets that may be given by the Company from time to time.  In case the Distributor does not perform as per the targets set by the Company, the Company may at its own sole discretion terminate the distributorship without assigning any reasons for such termination [or terminate the exclusive distributorship status].
 
e. The Company shall not entertain any claims from the Distributor over the prices or for any schemes other than the ones specifically intimated in writing to the Distributor or set forth in Exhibit C.
 
 
5. Responsibilities & Liabilities of the Distributor. Following are the responsibilities of the Distributor. The Company may define such additional responsibilities and liabilities on the Distributor as may be required from time to time.
 
a. The Distributor shall promptly pay all amounts as may be outstanding against the invoices that may have been raised by the Company and acknowledged by the Distributor.  Unless expressly provided by the Distributor, the Company shall have the absolute right to adjust the payments received from the Distributor towards satisfaction of interest on delayed payments, penalty, damages OR the invoice value as may deemed proper by the Company. Each invoice made by the Company and acknowledged by the Distributor shall constitute a valid contract as per the Indian Contract Act 1872 or any other rules and regulations.
 
b. The Distributor shall adopt all measures to enhance the sale of the Company's Products to achieve/exceed the targets as may be communicated by the Company from time to time.
 
c. The Distributor shall keep the record of all sales whether sold on cash or credit basis. The Distributor shall also be required to send such reports as may be required from time to time by the Company.
 
d. In case of delay in payments beyond the standard credit terms allowed by the Company, the Distributor, in addition to the sums due shall be liable to pay interest of __% per month on the sums due and outstanding.
 
e. The Distributor shall be liable to pay the price of Products purchased on credit from the Company as well as other dues of the Company in accordance with the instructions/policies framed by the Company from time to time. The Company shall have lien and first charge on all unsold Products lying with the Distributor.  If the Company so desires, it may, at its discretion take back or cause to be taken back the unsold Products/stock lying with the Distributor. The unpaid price of the Products supplied by the Company to the Distributor shall remain in trust with the Distributor till the same is paid to the Company.  Any refusal, failure or inability to pay the dues of the Company for any reason whatsoever shall tantamount to misappropriation and breach of trust. In such event the Distributor shall be liable to face civil and criminal consequences at the costs of the Distributor.
 
f. The Distributor shall provide service to the customers of the Company in the Territory and such other places as may be directed by the Company from time to time. However, nothing stated herein shall prejudice the right of the Company to directly affect supply in the Territory or cause other agencies to affect such supplies in the Territory.
 
g. The Distributor shall prominently display the Products inside the Outlet as per the instructions of the Company from time to time.
 
h. The Distributor shall be liable for all compliance under any local law, control orders and state government rules and shall take all necessary steps for obtaining registrations, licenses and renewals thereof, maintaining proper registers and also submitting necessary returns to the authorised agencies. In the event of any contravention by the Distributor of the provisions thereof, the Distributor shall remain fully liable and shall also keep the Company indemnified against any breach and monetary liability or cost arising thereof.
 
i. The Distributor shall keep the Company posted with the latest market developments and customer preferences and other information as desired by the Company.
 
j. The Distributor shall not sell the Products directly or indirectly outside the Territory. The Distributor while selling the company's Products to persons in trade shall obtain undertaking in writing that the company's Products shall not be re-sold outside the district agency and the said Products shall not be re-sold to the public below the fixed retail price.
 
k. Distributor will not represent or distribute during the term of this Agreement any Products which, in Company's opinion, compete, directly or indirectly, with the Products. Exhibit D contains a list of Products which, as of the Effective Date, compete with Company Products. Upon thirty (30) days prior written notice to Distributor, Company may, at its sole discretion, update or modify the list specified by Exhibit D at any time during the term of this Agreement.
l. Distributor is personally responsible for all income taxes due to any earnings from selling the Products. All Products delivered to the Distributor will bear Value Added tax (VAT) and any other taxes / levies whenever required and applicable from time to time. Distributors are responsible to meet the Sales Tax on product purchase as per VAT.
6. Distributor Covenants. Distributor covenants that Distributor shall:
 
a. conduct business in a manner that reflects favourably at all times on Company Products and the good name, good will and reputation of Company;
 
b. avoid deceptive, misleading or unethical practices that are or might be detrimental to Company, Company Products or the public;
 
c. make no false or misleading representations with regard to Company or Company Products;
 
d.  not publish or employ, or cooperate in the publication or employment of, any misleading or deceptive advertising material with regard to Company or Company Products; and
 
e.  make no representations, warranties or guarantees to customers or to the trade with respect to the specifications, features or capabilities of Company Products that are inconsistent with the literature distributed by Company.
 
 
7. Storage & Documentation
 
a. The Distributor will ensure that the Products are stored carefully and arrange to protect/guard the Products against theft, damage, fire, flood, burglary and other hazards and also damage due to handling and storage, water logging, combustible materials, acids and explosives etc. The Company shall not be liable to take back the stock of Products, which have been damaged due to the negligence/carelessness of the Distributor. The Distributor shall forthwith make payment of such stock to the Company without prejudice to damage/deterioration in the value of the Stock.
 
b. The Distributor shall insure the Products in its custody and control against all risks including but not restricting to risks against riots, strike, hurricane, typhoon, and wilful damage.
 
c. The Distributor shall be responsible for the inspection of the Stocks of Products when they are transported to Distributors storage. The Distributor shall issue a format acknowledgement as may be required from time to time by the Transport Contractor/ Agency and also issue Products inward advice to the Factory/ Office of the Company in a proforma as may be prescribed by the Company.  Any discrepancies found in the Products received and the details given on the invoice should immediately be brought to the notice of the Company in writing by the Distributor but in any case not later than two weeks from the date of their receipt by the Distributor.
 
d. The Distributor shall make payments to the Transport Contractor/Advertisement, Hoarding bills etc. and shall remain liable to deduct & deposit the tax at source under the Income Tax Act 1961 and to comply with all other related statutory compliance. The Distributor shall at the time of seeking reimbursement, produce evidence of complying with the formalities.
 
e. The Distributor shall be responsible for the maintenance of the stock of the Products purchased from the Company. The Company shall be entitled to depute the authorised representatives to verify the stocks of the Distributor. The Distributor shall extend all necessary facilities and cooperation to the representatives of the Company taking the inventory of the Products.
 
f. The Distributor shall not have any right to unilaterally return the Products, which has been sold by the Company.  The Company shall, however, have a right to repossess the Products in case the payments are due from the Distributor.
 
8. Manpower & Utilities.
 
a. The Distributor shall employ its own manpower in order to fulfil his obligations and duties, which shall arise out of this Agreement. The Distributor shall be responsible for payment of wages/salary to such manpower appointed by them and to comply with all statutory rules and regulations governing the employment. They shall keep the Company harmless and indemnified against any legal action, loss, claim or damages arising from negligence or breach of any rules and regulations.
 
b. The Distributor shall engage the services of adequate number of staff for diligent performance of the duties enumerated herein as may be specified by the Company from time to time.
 
c. It is expressly understood that such employees are those of the Distributor and the Company shall not be responsible for any act by such employees. Company shall not be liable for payment of any compensation/damages due to death/full or partial disability caused to any of distributors employees.
 
 
9. Records & Invoicing
 
a. The Distributor shall maintain complete and up-to-date accounts of all the Products purchased and sold by the Distributor to the customers of the Company, and shall maintain/send such records/reports as may be prescribed by the Company. Such records and information shall be open to inspection by the representatives of the Company and they will be entitled to take photocopies of the Accounts or any part thereof.
 
b. The Company shall have a right to alter/vary the retail price of its Products from time to time without prior intimation to the Distributor. In case of un-executed orders, the prices at the time of execution shall be applicable.
 
c. __________________________________________________ [Additional provisions]
 
10. Liability
 
a. The Distributor shall be liable for all losses, damages, shortages of the Products by reason of any act of omission or commission on its part or its employees, representatives while the Products are in the custody and/or control of the Distributor.
 
b. All taxes (Central or State/Local), levies, impositions, octroi and duties, which may be assessed on the Company in respect of the sale of the Company's Products or levied on the said sales shall be borne by the Distributor. The Distributor shall keep the Company indemnified against any taxes, claims, demands, proceedings, costs, charges and expenses in respect of such impositions, taxes, levies & duties.
 
c. The Distributor shall remain liable to pay to the Company all amounts that may be due on outstanding to the Company prior to the commencement of this agreement.
10. Commissions.
The Distributor shall be entitled to _______per cent commission on the retail price of the Products realised on the basis of accounts maintained by him.
11. Trademarks, Trade Names, Logos, Designations and Copyrights.
 
During the term of this Agreement and subject to the terms and conditions specified herein, Company grants to Distributor a nonexclusive, non-transferable, limited licence to use, in the Territory, Company's trademarks, trade names, logos and designations only as necessary for Distributor to fulfill its obligations hereunder. Distributor's use of such trademarks, trade names, logos and designations will be in accordance with Company's policies in effect from time to time. Changes to this trademark use policy that Company in its sole discretion will specify, shall be effective upon thirty (30) days' written notice to Distributor. Distributor agrees not to attach any additional trademarks, trade names, logos or designations to any Company Product.  Distributor further agrees not to use any Company trademark, trade name, logo or designation in connection with any non-Company Product. Company reserves the right to review planned uses of its trademarks, trade names, logos and designations to confirm that they are within the guidelines, prior to usage of such trademarks by Distributor.
 
 
12. Sub-Distributors
 
The Distributor may appoint such sub-distributors as he deems fit and necessary. Each such sub-distributor appointed by the Distributor, and their directors, partners, employees and agents, to the extent required or necessary, shall have the necessary qualifications, approvals or licenses required to act in such capacity. The Distributor will oversee the activities of the sub-distributors and will responsible for the activities of the sub-distributors. Further, the Distributor shall indemnify the Company for any and all costs, expenses, losses and damages that they may incur due to the negligence, willful default or fraud or any other act or omission of the sub-distributor.
13. Commissions.
The Distributor guarantees a minimum sale of the value of Rs.______ per year. In case, the sale fails short by 25% or more for consecutive two years, Company may terminate this agreement.
14. Independent Contractors. Distributor is an independent contractor and is not the legal representative or agent of Company for any purpose and shall have no right or authority (except as expressly provided in this Agreement) to incur, assume or create in writing or otherwise, any warranty on the part of Company. Company shall not exercise any control over any of Distributor's employees, all of who are entirely under the control of Distributor. Distributor shall be responsible for the acts and omissions of Distributor's employees. Nothing contained in this Agreement shall be deemed to create any partnership or joint venture relationship between the parties.
 
15. Termination of Agreement.
a. Any of the Parties may terminate this agreement by serving a notice of ____(__)  months to the other Party. The accounts between the Parties will be settled and adjusted finally within the aforesaid period of ____(__) months.
b. In the expiry or earlier determination of this Agreement, the Distributor shall forthwith deliver to Company all the unsold stock of Products, all books of account and other documents of agency to Company and shall pay to Company for the shortage or deficiency of stocks at list prices less commission allowed to the Distributor.
c. Notwithstanding anything contained to the contrary herein, the Company shall be entitled to terminate forthwith this agreement with immediate effect upon the happening of one or more of the following events:
 
   i) Should the Distributor in the opinion of the Company become incapable of performing the obligations of this Agreement and the duties thereunder or its position, at any time be such, which in the sole discretion of the Company, render it inexpedient for it to continue to act as Distributor.
 
   ii) The Distributor acts in a manner prejudicial to the interest of the Company. The Company shall be the sole judge in this regard.
 
   iii) The Distributor commits a breach of any of the provisions of this Agreement and fails to cure the same within the cure period of _____(__) days after a written notice from the Company.
 
iv) If there is any change in the constitution, ownership, control or composition of the Distributor, unless such change or alteration has been agreed to by the Company in writing.
 
d. The termination of this agreement shall not discharge, affect or otherwise modify the rights and obligations of the parties established or incurred prior to the termination thereof.
 
16. Miscellaneous.
 
a. No terms and conditions of this Agreement shall be assigned, changed, modified or waived in any way without mutual written consent of the parties hereto duly signed by authorised representatives.
 
b. The Company shall not be deemed to have waived their rights nor the Distributor exonerated from its obligations from the failure of the Company to enforce strict observance of the terms of the Agreement by the Distributor.
 
c. Unless otherwise expressly agreed to in writing, all supplies of Company's Products shall be against cash on delivery or on negotiation of documents of title against payment through a Schedule Bank, as per the choice of the Company or as per the terms declared from time to time.
d. The rights under this agreement shall not be assigned or transferred to any other person, except with the prior permission of Company in writing.
e. This Agreement shall be executed in duplicate. The original it shall be retained by Company and the duplicate by the Distributor.
17. Governing Law; Disputes. This Agreement and the rights and obligations of the Parties hereunder shall, be construed in accordance with and be governed by the courts of _____________, in the State of ______________, India. In the event of disputes, differences, claims and questions between the parties hereto arising out of this Agreement or in any way relating hereto or any term, consultation or provision herein mentioned or the construction or interpretation thereof or otherwise in relation hereto, the parties shall first endeavor to settle such differences, disputes, claims or questions by friendly consultation. In the event of failure of parties to resolve by friendly consolation the dispute, the disputes, differences, claims and questions between the Parties hereto arising out of this Agreement or in any way relating hereto or any term, condition or provision herein mentioned or the construction or interpretation thereof or otherwise shall be referred to arbitration.  The proceedings held by the arbitrator in making the award will be in accordance with the provisions of Indian Arbitration and Conciliation Act, 1996 or any statutory modification thereof. The award of the arbitrator shall be final and binding on the parties.
18. Force Majeure. None of the parties will be liable for delay in performing any of its obligations under this Agreement or for failure to perform any of its obligations under this Agreement caused by events beyond its reasonable control including, without limitation, any act of God, flood, earthquake, fire, explosion, accident, war, terrorism, civil disorder, labor dispute, act of Government or regulatory authority, power failure or any similar event (each a “Force Majeure Event”) and in the event of a Force Majeure Event, each party will continue to use all reasonable endeavors to perform its obligations under this Agreement.
IN WITNESS WHEREOF the parties hereto have set their respective hands to these presents and the duplicate hereof on the date, month and year hereinabove written.
Signed and delivered by M/s..…........ the within named Principals by their partners
Signed and delivered by the within named Distributor by their proprietor Shri ..........
WITNESSES;1.
2.
EXHIBITS
Products List- Exhibit "A"
Territory -Exhibit "B"
Price List -Exhibit “C
Competing Products - Exhibit “D

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