What is Reseller Agreement Drafting?
A reseller agreement is a contract between a supplier and a reseller who sell goods on their behalf. This type of agreement can assist suppliers in gaining access to larger markets, boosting their success.
When drafting a reseller agreement, it’s important to include key terms to govern the working relationship between parties and prevent future disputes. This can include their duties, responsibilities, payment structures, and more.
Read the rest of this article to explore why you might need a reseller agreement, what’s typically included in a reseller agreement, what pitfalls to avoid when drafting it, and why you should work with a qualified lawyer for assistance with the agreement-drafting process.
When Do You Need to Draft a Reseller Agreement?
There are various instances when you’ll require a reseller agreement, such as if you’re:
- Launching new goods, as you’ll want your reseller to understand your preferred marketing strategies and pricing structures.
- Entering new markets, as you’ll need to explain territorial rights for your resellers. This serves to prevent disputes.
- Working with a business that will market and sell your software subscriptions.
What Key Terms are in a Reseller Agreement?
It’s common for a reseller agreement to include the following essential terms:
- Parties. The agreement must specify the full legal names and physical addresses of both parties.
- Goods or services. This details exactly what goods or services will be sold.
- Targets. This outlines the minimum units or sales quotas that need to be met by the reseller.
- Duties. The reseller has specific roles and obligations during the agreement term, such as regarding marketing. There are also supplier duties that should be included so that both parties know what’s expected of them.
- Payments and pricing. This should be comprehensive, such as by covering commission rates and payment schedules.
- Confidentiality. Since the supplier will share private information with the reseller, the contract must specify how it will be protected.
- Disputes. If parties disagree on certain issues and can’t resolve the situation, the agreement should specify dispute-resolution methods, such as mediation or arbitration.
What are Potential Pitfalls to Avoid when Drafting a Reseller Agreement?
When drafting a reseller agreement, there are some things to avoid so that you prevent disputes or legal problems. Here’s a rundown of common errors.
Vague Intellectual Property (IP) Guidelines
Your reseller agreement must specify how the reseller is allowed to use the supplier’s IP, such as their logos and trademarks. It must be clearly stated that the IP ownership remains with the supplier to avoid potential infringements.
This prevents the reseller from engaging in prohibited activities that could harm the brand’s reputation while helping them know what activities are expected of them.
Lack of Termination Provisions
If either party wants to end the agreement earlier than expected, there should be clarity for how this can be achieved, such as with notice periods. The agreement must also state what conditions will trigger a termination, such as a contract breach.
Missing Post-Termination Duties
The reseller agreement must detail any obligations that need to be fulfilled after the contract comes to an end. This will include provisions for what to do with unsold inventory. It helps parties to make a clear exit with a minimal risk of disputes.
Unclear Exclusivity Clauses
A core component of the reseller’s agreement is to define if it’s exclusive or non-exclusive. In an exclusive agreement, a reseller has the sole right to sell the supplier’s goods in a specific market segment or territory. By comparison, a non-exclusive agreement specifies that more than one reseller can sell goods in the same location.
Not Defining Customers
It’s essential to explain what customers the reseller will be selling to and potentially drafting agreements with, such as other companies. Create a list of approved customers for your reseller to provide them with clarity.
How Can a Lawyer Help You With Reseller Agreement Drafting?
When drafting a reseller agreement, you might wonder if you should consult a lawyer for assistance. This is advisable, especially if you’re worried about making certain mistakes that could harm you legally or financially.
A lawyer can help you in various ways during the drafting of a reseller agreement, such as by:
- Using clear, simple language in the contract so that there’s no confusion or hidden risks for either party.
- Aligning the reseller agreement with relevant laws and regulations so you don’t get into legal trouble.
- Negotiating with the other party before finalizing the agreement to ensure mutually favorable terms.
- Reviewing the agreement whenever required so that it contains updated information and prevents disputes.
- Evaluating your career goals and business requirements so that you have a customized reseller agreement.
Where to Find a Lawyer for Reseller Agreement Drafting
If you need to hire a lawyer to draft your reseller agreement, you don’t have to search far and wide for the best legal professional to help you. When searching for a lawyer who’s reliable and experienced in contract drafting, you should make use of an online legal platform such as ContractsCounsel.
ContractsCounsel is an online legal marketplace that gives you access to a network of vetted lawyers who have the expertise to help you draft a legally-solid reseller agreement.
Here are the easy steps to follow if you need to find a reputable lawyer on the platform.
1. Go to the ContractsCounsel marketplace, where you can post your project for free. Be specific by providing a few details of what you need. This will help you match with the most suitable lawyers.
2. Wait for lawyer bids. You’ll receive multiple bids from lawyers directly on the platform who are ready to assist you.
3. Review the lawyers’ profiles. After receiving the lawyer bids, review the lawyers' profiles. ContractsCounsel provides lawyer data to help you, such as the lawyers’ location, client ratings, years of experience, and field of expertise.
4. Connect with a lawyer you think is best suited to your requirements and hire them to draft your reseller agreement for clarity.
