Software Reseller Agreement

Clients Rate Lawyers on our Platform 4.9/5 Stars
based on 3,359 reviews

Jump to Section

Need help with a legal contract?

CREATE A FREE PROJECT POSTING
Post Project Now

What is a Software Reseller Agreement?

A software reseller agreement is a legal agreement that outlines the rights and responsibilities between an owner of the software, publisher, person, or business or a reseller that wants the rights to sell or license the software to a third party.

Often referred to as a software distributor agreement or software distribution agreement, this common software agreement is created for one purpose: to make sure both parties are keeping up their end of the bargain.

The entire concept of third-party reselling is not new or without its faults. Missed communication, poorly defined requirements, or loopholes could threaten even the best business deals. This is why a licensed attorney should review any software agreement that involves reselling.

This is an article about getting the most from your software distribution agreement.

How Do You Structure a Software Reseller Agreement?

A reseller agreement for software can be structured as exclusive or non-exclusive.

  • Exclusive Software Reseller Agreement: a software reseller agreement in which the reseller is the only entity legally allowed to resell or distribute the software, including the publisher and any of the publisher’s other resellers. However, it is common for an exclusive arrangement to be limited by a geographical area or industry.
  • Non-Exclusive Software Reseller Agreement: Most mainstream software reseller agreements are non-exclusive. In these arrangements, the publisher is free to permit other resellers to sell the same software.

What’s Included in a Software Reseller Agreement?

Depending on the complexity, a software reseller agreement could include more specific topics, but at a minimum, it should include:

  1. Applicable Law: There are some cases in which the publisher and reseller are in different countries. In these especially, there is a need to define under which jurisdiction the laws governing the agreement will be based.
  2. Ownership Terms: As mentioned above, a software reseller agreement can be exclusive or non-exclusive. The publisher is the one who decides which type of agreement they want to offer, and it sometimes varies among individual sellers.
  3. Intellectual Property Rights: Intellectual property rights are one of the trickiest, but most important points in a software reseller agreement. Suppose a reseller does not have express permission to use the trademark, or copyright. In that case, they could face copyright infringement or trademark infringement charges if there is a breach.
  4. Payment Terms: As with many legal agreements, the financial terms should also be delineated in the software reseller agreement. If you are a reseller, this is the part you want to pay attention to. It will outline how you will be compensated.
  5. Software Maintenance/Updates: Make sure you have support after the agreement. If you don’t, you could be left hanging once the agreement is signed. Typically, the SaaS publishing company is responsible for updating and maintaining software throughout the contract's lifetime. A schedule should be included.
  6. Additional Services: As a reseller, if you will be responsible for end-user training, you’ll want to know ahead of time and be compensated accordingly. This should be agreed upon at the start and outlined in the software agreement.

Here is an article about some of the top software resellers in the market, according to users.

Meet some lawyers on our platform

Gregory B.

61 projects on CC
View Profile

Michael M.

91 projects on CC
View Profile

Jane C.

93 projects on CC
View Profile

Albert M.

8 projects on CC
View Profile

How Does a Software Reseller Agreement Work?

To set up a software reseller agreement, there has to be an interested party, the reseller, and a producing party, the publisher. The rest is a series of steps.

  1. Meet with the software publisher to get a feel for the product and answer any initial questions.
  2. Review terms and outline notes to prepare for the next meeting.
  3. Meet with the publisher again and negotiate the distribution terms.
  4. Hammer out the deal's details, such as promotional literature, patent or trademark information, payment information, and generally expected duties of both parties.
  5. Consult a licensed lawyer to help draft the agreement.
  6. Time to sign or take this last chance to renegotiate any contract terms.
  7. If signed, you can now execute the agreement as outlined.

Here is an article about building a SaaS reseller business model.

ContractsCounsel Software Reseller Agreement Image

Image via Pexels by Christina Morillo

Types of Software Reseller Agreements

There are three main types of reseller agreements: top-down, bottom-up, or the less common, three-party.

Top-Down Agreements

Suited for a more high-value customer or SME, top-down agreements spell out how the reseller contracts with customers. This usually takes the form of an agreed-upon schedule, and they are expected to include standard compliance provisions, such as:

  • Anti-bribery
  • Audit
  • Information security
  • Record-keeping.

Bottom-Up Arrangements

This arrangement may be necessary when working with a larger corporate customer. Still, in a nutshell, bottom-up agreements are a product of active negotiations between the customer and the reseller. While they may not work in every situation, they create a win-win for both publisher and seller.

Three-Party Contracts

A less popular form, the three-party contract, happens when a publisher wants to act as an intermediary between reseller and customer. While not impossible to work with, this arrangement is a bit improbable. Moreover, even with all of the stars aligned, agreements of this nature are complex and expensive undertakings.

Here is an article about reseller agreement formats.

Typical Payment Terms for Reseller Agreements

The most common payment terms for reseller agreements are margin, commission, or subscription.

  • Margin: with margin-based payment terms, the reseller would purchase the original product and resell it for more than the purchase price. The difference between what the reseller paid and what they sold it for is called margin and represents the profit made per product.
  • Commission: commission-based payment terms would be based on a license fee paid to the publisher, by the end-user. This is similar in set-up to a sales agent’s commission and is commonly used in a SaaS agreement.
  • Subscription: this is one of those situations where knowledge can keep you out of trouble. If there is a subscription payment model for the end-user, what part of that payment is due to the reseller? This is different for every agreement; make sure it is part of your review checklist.

Here is an article about how to determine your reseller margins.

Post a project in ContractsCounsel’s marketplace to receive flat fee bids from lawyers for your project. All lawyers have been vetted by our team and peer-reviewed by our customers for you to explore before hiring.

How ContractsCounsel Works
Hiring a lawyer on ContractsCounsel is easy, transparent and affordable.
1. Post a Free Project
Complete our 4-step process to provide info on what you need done.
2. Get Bids to Review
Receive flat-fee bids from lawyers in our marketplace to compare.
3. Start Your Project
Securely pay to start working with the lawyer you select.

Meet some of our Software Reseller Agreement Lawyers

Michael C. on ContractsCounsel
View Michael
5.0 (1)
Member Since:
March 17, 2022

Michael C.

Managing Member
Free Consultation
Get Free Proposal
Remote
11 Yrs Experience
Licensed in NY, TX
Wake Forest University School of Law

A seasoned senior executive with experience leading the legal and compliance functions of healthcare entities through high-growth periods. I have experience managing voluminous litigation caseloads, while also handling all pre-litigation investigations for employment, healthcare regulatory, and compliance matters. Similarly, I have led multiple M&A teams through purchase and sale processes, including diligence and contract negotiations. Finally, I have extensive contract review experience in all matters, including debt and equity financing, healthcare payor contracting, vendor and employment agreements, as well as service and procurement agreements.

Mark D. on ContractsCounsel
View Mark
Member Since:
March 15, 2022

Mark D.

Attorney
Free Consultation
Get Free Proposal
Dallas/Houston Texas
27 Yrs Experience
Licensed in CO, TX
Thomas M Cooley Law School

Partnering with business clients to keep their greatest asset - their employees - from becoming their biggest liability. Mark accomplishes this by working with in-house counsel and human resource professionals of several Fortune 50 companies, as well as many smaller public and privately held profit and not for profit organizations, to provide advice and counsel on the day to day employment and workforce practice issues encountered by those organizations. For over fifteen years Mark has been Board Certified in Labor and Employment Law by the Texas Board of Legal Specialization. He is licensed and practices in both Texas and Colorado and has focused his practice for the last 20 plus years on defending companies in employment and labor related matters. During this time Mark has had extensive experience in handling and responding to a wide range of local, state and federal employment issues that impact the management and operations of businesses in a wide range of industries. Mark's experience includes appearances before state and federal agencies and regulatory boards, litigation in both state and federal courts, defense of class actions and appearances before courts of appeal. While Mark regularly handles matters in litigation, he has a high regard for handling every issue with the best interest of the client’s business. Mark is a published author and regular speaks on labor, employment and workplace practice topics. Whether it be an investigation by the Occupational Safety and Health Administration (OSHA), the Wage & Hour division of the U.S. Department of Labor, or other state agency; an Equal Employment Opportunity Commission (EEOC) or state agency charge claiming a violation of local, state or federal employment or labor laws; or the need for direction on a hiring, termination or business operational issue involving employees, Mark has extensive experience in handling these and many other employment and labor issues.

Rebecca R. on ContractsCounsel
View Rebecca
5.0 (2)
Member Since:
March 16, 2022

Rebecca R.

Attorney
Free Consultation
Get Free Proposal
St. Petersburg, FL/Nashville, TN
21 Yrs Experience
Licensed in TN
University of Tennessee College of Law

An experienced commercial contracts attorney with sales, leasing, NDA, SEC compliance, corporate governance, commercial real estate, and employment experience. Also well versed in internal and external policy document and manual creation.

Joann H. on ContractsCounsel
View Joann
Member Since:
March 23, 2022

Joann H.

Attorney at Law
Free Consultation
Get Free Proposal
Miami
22 Yrs Experience
Licensed in FL, NY
University of Buffalo School of Law; SUNY at Buffalo School of Law

I practiced law for the past 22 years in Immigration, Bankruptcy, Foreclosure, Civil Litigation, and Estate Planning. I am interested in downsizing to a more workable schedule to allow the pursuit of other interests.

Gregory F. on ContractsCounsel
View Gregory
5.0 (1)
Member Since:
March 23, 2022

Gregory F.

Attorney
Free Consultation
Get Free Proposal
Atlanta, Georgia
24 Yrs Experience
Licensed in GA, NY
University of Pennsylvania

Greg Fidlon has been practicing exclusively in employment law since 1998. He represents and advises clients in all aspects of the employment relationship. In addition to his litigation work, Greg regularly negotiates and drafts corporate policy handbooks, employment contracts, separation agreements and restrictive covenants. He also develops and presents training programs and has spoken and written extensively on labor and employment law topics.

Pankaj R. on ContractsCounsel
View Pankaj
Member Since:
March 25, 2022

Pankaj R.

Owner
Free Consultation
Get Free Proposal
Los Angeles/Inland Empire
13 Yrs Experience
Licensed in AZ, CA
University of Arizona Rogers College of Law

I advise clients in the areas of business, trademarks, real estate, employment, and finance. My overarching goals are to unite creative people and companies to assist them in making sound legal and business decisions. I have been fortunate enough to build a fast-growing, 21st-century law firm with an amazing staff by my side. Our focus is not just on providing invaluable legal insight but creating a better all-around client experience. We provide unique subscription pricing and flat-fee options for our clients, providing billing transparency and enhanced value to all of our wonderful clients. Focus areas: contract drafting, negotiations, research, trademarks international law, entertainment, business development, entity choice; business: manager, team builder, leader, motivator. Speaking Engagements: National Business Institute (NBI) - "Business Contracts 101"

Find the best lawyer for your project

Browse Lawyers Now

Want to speak to someone?

Get in touch below and we will schedule a time to connect!

Request a call