ABSTRACT
Development of the Product ☐ Identify parties’ representatives ☐ Describe process for setting meetings ☐ Draft development plan with technical aspects of product design ☐ Agree ahead of time how parties will allocate expenses
Obligations of the Parties ☐ Distribution and sale of the product ☐ Training distributor’s employees ☐ Customer support ☐ Marketing of product
S Marketing materials
S Marketing plans S Press releases
☐ Assign primary marketing contact for each party ☐ Ensure that distributor cannot misrepresent or otherwise make false statements regarding product
Product Pricing ☐ Determine price of product and royalty payments ☐ Collecting fees
S Initial license S Add-on services S Subscriptions
☐ Shipping costs and taxes ☐ Expenses incurred in distribution ☐ Invoicing and collection of fees ☐ Distributor’s periodic reports:
S Sales S Marketing S Audit payments
☐ Maintain records after termination of distribution agreement Confidentiality Term of Agreement
☐ Ensure survivorship of certain contractual clauses S Warranties S Indemnification S Risk of loss S Limitation of liability S Intellectual property
Distribution agreements are used between a manufacturer of information technology (e.g., a software manufacturer) and a supplier of information technology or publisher of content to a wide base of customers (e.g., a marketer and distributor of software products). Generally speaking, a distribution arrangement provides an opportunity for both sides to make money and a balanced relationship will be one where the manufacturer and the distributor both make monetary gains. In most cases, the
manufacturer will “sell” whatever it is that it manufactures to the distributor, who will then “sell” the product for a higher price. It is often the case that the manufacturer makes the least money, but it should, nonetheless, be well compensated for the products being distributed.
