Software Reseller Agreement: What is it? What to Include
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What is a Software Reseller Agreement?
A software reseller agreement is a legal contract between a software publisher and reseller. The agreement specifies the rights and responsibilities of each party involved in reselling the software to third parties.
Sometimes referred to as a software distribution agreement, this type of licensing agreement is created set clear legal and business terms on the obligations of both parties.
Third parties reselling software is not a new concept and it is key to make sure all terms are clearly outlined to ensure a successful relationship. Missed communication, poorly defined requirements, or loopholes could threaten even the best software resale deals, which is why it is always recommend to consult a technology lawyer when drafting or negotiating these types of agreements.
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:
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
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.
- Meet with the software publisher to get a feel for the product and answer any initial questions.
- Review terms and outline notes to prepare for the next meeting.
- Meet with the publisher again and negotiate the distribution terms.
- Hammer out the deal's details, such as promotional literature, patent or trademark information, payment information, and generally expected duties of both parties.
- Consult a licensed lawyer to help draft the agreement.
- Time to sign or take this last chance to renegotiate any contract terms.
- If signed, you can now execute the agreement as outlined.
Here is an article about building a SaaS reseller business model.
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.
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Tabetha H.
I am a startup veteran with a demonstrated history of execution with companies from formation through growth stage and acquisition. A collaborative and data-driven manager, I love to build and lead successful teams, and enjoy working full-stack across all aspects of the business.
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Benjamin E.
Benjamin is an attorney specializing in Business, Intellectual Property, Employment and Real Estate.
"Benjamin E was very easy to work with and would recommend him."
Kenneth G.
Kenneth E. Gray, Jr. is a business and tax attorney who advises entrepreneurs, investors, and closely held companies on transactions, tax planning, disputes, and long-term wealth structuring. He focuses on helping clients make legally sound decisions that also make business sense. Ken’s practice includes business formation and restructuring, mergers and acquisitions, private investments and fundraising transactions, contract drafting and negotiation, and cross-border matters. He also maintains a significant tax practice, advising on federal and state structuring, specialty filings (including partnership, corporate, and non-resident matters), and representing clients in disputes before the U.S. Tax Court and other federal and state tribunals. In addition to his transactional work, Ken handles commercial and business litigation, including tax controversies, financial disputes, and partnership matters. His litigation experience informs how he structures deals and governance documents, with an eye toward preventing disputes before they arise. Ken also advises individuals and families on estate planning, trust formation, tax-efficient wealth transfer strategies, and probate administration, including planning involving closely held businesses and foreign assets. Before practicing law, Ken worked in banking and private equity, including managing a $5 billion emerging markets fund-of-funds portfolio at the U.S. Overseas Private Investment Corporation (OPIC) and serving in equity research at ABN AMRO. That financial background allows him to understand transactions from both the legal and capital perspective. He holds a J.D. from Georgetown University Law Center and an MBA from Yale University. He practices before the U.S. Tax Court, various state courts, and other federal courts.
"Kenneth was great to work with, and gave insightful legal advice. He respond quickly and working with him made me feel like I was in good hands."
Antoine D.
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Alexander N.
Having overseen over $1.2 billion in transaction value, we are able to provide top-tier service at affordable rates, with much more personalized attention and fast turnarounds. After working for a AM Law Top 100 firm, I started my own firm and have been lucky enough to represent numerous conglomerates (FOX, Endeavor, etc.), promising startups, small businesses and private individuals. Our areas of expertise - Business Formations and Operating Agreements; Capital Raises and Debt Financing; Commercial Transactions; M&A; Real Estate; Intellectual Property; Employment and Hiring; Outside General Counsel; Corporate Agreements and Governance; Litigation and Dispute Resolution. We have been featured in The Wall Street Journal, Marketwatch, Yahoo Finance, Variety, Business Insider, Los Angeles Magazine, the LA Times, and others. We are driven by an unwavering commitment to our clients, going above and beyond to deliver results.
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Brad A.
Brad Adams is the founder of Adams Outside GC, PLLC, a legal consulting firm providing fractional General Counsel services to businesses across Florida, Alabama, and Georgia. With more than 25 years of legal experience, Brad offers practical, business-minded legal support to help companies navigate complex legal issues, minimize risk, and focus on growth. Brad’s practice spans both business law and employment law, with a focus on delivering real-world solutions tailored to each client’s needs. He regularly advises companies on legal compliance, drafts and negotiates contracts, supports clients with collections and dispute resolution, and helps businesses manage day-to-day legal and HR matters. His employment law experience includes drafting policies and agreements, conducting internal investigations, delivering compliance training, guiding employers through regulatory challenges and responding to administrative complaints. Brad has represented employers of all sizes—ranging from startups to Fortune 500 companies—in a wide variety of industries, including construction, manufacturing, retail, healthcare, hospitality, solar energy, and technology. In addition to this broad experience, Brad has developed significant expertise in worker classification issues, particularly in the gig economy. He has worked with businesses using independent contractor models to help them navigate the legal and operational complexities unique to non-traditional workforces. Brad’s guidance helps clients reduce misclassification risk and design more sustainable, compliant contractor arrangements that support operational flexibility. His published work on this topic has appeared in Bloomberg Law’s Daily Labor Report, and he is a valuable resource for companies working within this rapidly evolving space. Prior to founding Adams Outside GC, Brad served as General Counsel for Meraki Installers LLC, where he managed the company’s legal, compliance, and HR functions. He previously practiced at top national and regional law firms, including Littler Mendelson, P.C., where he spent over a decade focusing exclusively on employment law as both an associate and shareholder. Earlier in his career, he worked in the Atlanta office of Powell Goldstein LLP (now Bryan Cave Leighton Paisner) and the Mobile, Alabama office of McDowell Knight Roedder & Sledge, LLC. Prior to joining Meraki, Brad worked in the Pensacola, Florida office of Emmanuel, Sheppard & Condon. Brad is licensed in Florida, Alabama, and Georgia, and was a Board-Certified Specialist in Labor and Employment Law through the Florida Bar from June 2021 through May 2026. He earned his J.D. with honors from the University of Florida Levin College of Law, where he was recognized for excellence in legal writing. He also holds a B.A. with honors and distinction from the University of the South (Sewanee). Brad is a speaker and published author on employment law topics and compliance strategy, contributing to Bloomberg Law, LexisNexis, and regional HR and legal conferences. For additional information, please visit adamsoutsidegc.com
Monica T.
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Monica T.
NYC based attorney of over 15 years in NY & CT who specializes in entertainment transactional law. 10 years as a general/in-house counsel in 2 entertainment companies and former indie film company executive as well as a creative professional (actress, singer, writer, model, blogger, podcast host/producer and beauty ambassador). Also have over 5 years of court appearance experience in various practice areas including foreclosure defense, bankruptcy, personal injury (plaintiff), immigration, consumer debt, etc.
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