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What is a Contract Manufacturing Agreement? A contract manufacturing agreement is a legal document that outlines the terms and conditions of a company's relationship with contract manufacturer. Contract manufacturing is a form of outsouricng used by businesses to produce products to sell to their customers.
An important difference between a distribution agreement and a purchase agreement is that the purpose of the purchase agreement is to transfer ownership of a product, while the distribution agreement is aimed at a long-term collaboration between the parties to resell the products.
Many distribution agreements contain a clause providing what the distributor gets paid for selling the product, as well as a commission based on the number of products it sells. Commissions give the distributor the added incentive of selling as much of the supplier's product as possible.
Exclusive distribution is defined as when a company grants another company or individual the sole right to sell, distribute, or resell its products or services in a defined territory. The terms of an exclusive distribution agreement vary depending on the industry and product being distributed.
Distribution agreements are contracts between a distributor and manufacturer. They are also sometimes called wholesale distribution agreements, though not all distribution agreements are wholesale in nature.
The key terms of a distribution agreement can vary on multiple factors including the: product to be distributed; appointment of the distributor; and. obligations that each party have relating to the marketing, sale and distribution of the product.
The Distributor Agreement should clearly set forth the duties, responsibilities and expectations of each of the parties. The Distributor Agreement should also set forth provisions related to limitations and protections that each party can understand.
A manufacturing and distribution agreement is a legally binding contract between a supplier or manufacturer and distributor of a product. The agreement sets forth certain roles, duties, and obligations which each party must uphold as long as the agreement is in effect.