A distributor is an entity that buys noncompeting products or product lines, warehouses them, and resells them to retailers or direct to the end users or customers. Most distributors provide strong manpower and cash support to the supplier or manufacturer's promotional efforts. They usually also provide a range of services (such as product information, estimates, technical support, after-sales services, credit) to their customers.
A manufacturer is an entity that makes a good through a process involving raw materials, components, or assemblies, usually on a large scale with different operations divided among different workers. Commonly used interchangeably with producer.
Sample Agreement For Exclusive Distributorship In California
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Multi-State
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US-0012BG
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The Company represents and warrants that no other person or entity has any rights to sell and promote the Company's products or services, including those products or services listed in Attachment A (the “Products”) hereto, within the Exclusive Territory in derogation of the rights granted to the Exclusive Distributor ...
Examples of companies that use exclusive distribution include Apple for its high-priced and luxury products, as well as companies like Lamborghini, BMW, Rolex, and Mercedes. These companies appoint only a few distributors to cover a specific region, maintaining exclusivity in their distribution agreements.
Exclusive distribution is when a manufacturer grants a single retailer or distributor the exclusive rights to sell their products within a specific region. The goal with this strategy is to create a sense of scarcity. If the product is only found in certain locations, demand can go up.
A Standard Clause providing a distributor with the exclusive right to resell products purchased from a manufacturer, producer, or other supplier within a specified geographic territory during the term of the underlying distribution agreement.
When a purchaser places restrictions on a supplier, this is also exclusive dealing. For example, a purchaser refuses to buy from a supplier unless the supplier agrees not to supply the purchaser's competitors.
Isn't that illegal? A: Exclusive distribution arrangements like this usually are permitted. Although the retailer is prevented from selling competing flat-panel display monitors, this may be the type of product that requires a certain level of knowledge and service to sell.
Thus, the question of whether a distributorship contract is governed by the UCC will depend on the exact nuances of the contract. To determine whether the UCC applies, “courts generally examine the transaction to determine whether the sale of goods predominates.” Princess Cruises v. GE, 143 F. 3d 828, 833 (4th Cir.
As discussed in the Fact Sheets on Dealings in the Supply Chain, exclusive contracts between manufacturers and suppliers, or between manufacturers and dealers, are generally lawful because they improve competition among the brands of different manufacturers (interbrand competition).
Although some claims under Sherman Act, Section 1 are per se illegal under the antitrust laws, exclusive dealing is not. Instead, courts analyze these claims under the rule of reason. That means that the court won't allow any shortcuts.
An exclusive distribution clause prevents the supplier from forming other distribution contracts in a given market or territory. This gives the distributor the exclusive right to sell the products in that region. Exclusivity might be provided contingent on the distributor's performance.