Table of Contents

1. Frequently asked question

2. Dealership Agreement


Frequently asked question

  1. What is the purpose of a Dealership Agreement?

    A Dealership Agreement legally defines the relationship between a supplier/manufacturer and a dealer, outlining rights, obligations, payment terms, territory, and dispute resolution procedures.

  2. Is this Dealership Agreement exclusive?

    It depends on what is stated in the agreement. If it’s marked “exclusive,” the dealer will be the only authorized seller in the assigned territory.

  3. Can the dealer sell outside the assigned territory?

    No, unless the agreement specifically allows it in writing. Selling outside the territory without approval may be considered a breach.

  4. How are product prices determined?

    The supplier issues a price list (in Schedule C) that can be updated periodically. The dealer is required to follow this price list unless otherwise agreed.

  5. What happens if the dealer does not meet the minimum purchase target?

    If minimum purchase targets (Schedule D) are not met for a specified period, the supplier may issue a warning or terminate the agreement.

  6. How are payments made and what are the terms?

    Payments must follow the terms set in Schedule B. Late payments may incur interest as specified in Clause 5.

  7. Who handles after-sales service and warranty claims?

    The dealer is responsible for first-level customer service as per the supplier’s guidelines. Warranty claims are handled according to the warranty terms in Schedule E.

  8. Can either party terminate the agreement before the term ends?

    Yes, the agreement may be terminated early in cases such as breach of terms, insolvency, or with prior written notice as per Clause 13.

  9. How are disputes resolved?

    Disputes are first attempted to be resolved amicably. If that fails, arbitration is conducted under the Arbitration and Conciliation Act, 1996.

  10. What happens to unsold stock after termination?

    Upon termination, the supplier may repurchase unsold stock on mutually agreed terms, and the dealer must stop using the supplier’s branding immediately.


Dealership Agreement

This Dealership Agreement (“Agreement”) is made and entered into on this [Date] (“Effective Date”), by and between:


[Manufacturer/Supplier Name], a company incorporated under the laws of [Jurisdiction], having its registered office at [Full Address] (hereinafter referred to as the “Supplier”, which expression shall, unless repugnant to the context or meaning thereof, be deemed to include its successors and permitted assigns),


AND


[Dealer Name], a sole proprietorship/partnership/private limited company, having its principal place of business at [Full Address] (hereinafter referred to as the “Dealer”, which expression shall, unless repugnant to the context or meaning thereof, be deemed to include its successors and permitted assigns).


The Supplier and the Dealer are hereinafter collectively referred to as the “Parties” and individually as a “Party”.


RECITALS

WHEREAS:

  1. The Supplier is engaged in the business of manufacturing, marketing, and selling [Products Description] (“Products”);

  2. The Dealer is engaged in the business of retail/wholesale distribution of similar products and has the necessary experience, infrastructure, and sales network to promote and sell the Products;

  3. The Supplier desires to appoint the Dealer, and the Dealer desires to accept such appointment, to sell and distribute the Products in the defined Territory, subject to the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual promises, covenants, and undertakings contained herein, the Parties agree as follows:

  1. APPOINTMENT

    1. The Supplier hereby appoints the Dealer as its [exclusive/non-exclusive] dealer for the sale and distribution of the Products in the territory described in Schedule A (“Territory”).

    2. The Dealer shall not, without prior written consent of the Supplier, sell or distribute the Products outside the Territory.

  2. TERM

    1. This Agreement shall commence on the Effective Date and remain in force for a period of [X years], unless terminated earlier in accordance with Clause 13 of this Agreement.

    2. The Agreement may be renewed by mutual written consent of the Parties.

  3. DEALER’S OBLIGATIONS

    The Dealer agrees to:

    1. Promote, market, and sell the Products actively and in good faith within the Territory;

    2. Maintain adequate stock of the Products to meet reasonable customer demand;

    3. Employ qualified sales personnel and maintain suitable showroom, storage, and service facilities;

    4. Adhere strictly to the Supplier’s brand guidelines, quality standards, and promotional materials;

    5. Avoid dealing in counterfeit, imitation, or competing products without written approval;

    6. Submit monthly/quarterly sales reports to the Supplier;

    7. Make payments strictly as per the payment terms agreed in Schedule B.

  4. SUPPLIER’S OBLIGATIONS

    The Supplier agrees to:

    1. Supply the Products to the Dealer as per confirmed orders, subject to availability;

    2. Provide reasonable marketing support, promotional materials, and training;

    3. Ensure that Products supplied are free from manufacturing defects;

    4. Notify the Dealer promptly of any changes in product specifications, prices, or terms of sale.

  5. PRICING & PAYMENT TERMS

    1. The prices of the Products shall be as per the Price List in Schedule C, as amended by the Supplier from time to time.

    2. Payments shall be made by the Dealer in accordance with the terms specified in Schedule B.

    3. Late payments shall attract interest at the rate of [X%] per annum from the due date until payment is received.

  6. MINIMUM PURCHASE REQUIREMENT

    The Dealer shall achieve the minimum purchase targets specified in Schedule D. Failure to meet such targets for [two consecutive quarters/one financial year] may result in termination of this Agreement.

  7. EXCLUSIVITY & NON-COMPETE

    1. Where this Agreement is exclusive, the Supplier shall not appoint any other dealer for the Products in the Territory during the Term.

    2. The Dealer shall not, without written consent, market or sell any directly competing products during the Term.

  8. MARKETING & ADVERTISING

    1. All marketing and advertising materials bearing the Supplier’s trademarks shall require prior written approval.

    2. The Dealer shall bear local advertising expenses unless otherwise agreed in writing.

  9. WARRANTY & AFTER-SALES SERVICE

    1. The Supplier warrants that the Products are free from defects in material and workmanship for the warranty period specified in Schedule E.

    2. The Dealer shall provide after-sales service as per the Supplier’s guidelines and promptly address customer complaints.

  10. CONFIDENTIALITY

    1. The Dealer shall maintain strict confidentiality regarding all trade secrets, pricing, business strategies, and other confidential information disclosed by the Supplier.

    2. This obligation shall survive termination of the Agreement for a period of [X years].

  11. INTELLECTUAL PROPERTY

    All trademarks, trade names, logos, and other intellectual property relating to the Products remain the exclusive property of the Supplier. The Dealer shall not claim any rights or register any such IP in its own name.

  12. FORCE MAJEURE

    Neither Party shall be liable for failure to perform its obligations due to events beyond its reasonable control, including natural disasters, war, strikes, government restrictions, or pandemics.

  13. TERMINATION

    1. This Agreement may be terminated by:

      1. Either Party, by giving [30/60/90] days written notice without cause;

      2. The Supplier, with immediate effect, if the Dealer breaches any material term and fails to cure such breach within [15] days of written notice;

      3. Either Party upon insolvency, bankruptcy, or cessation of business by the other Party.

    2. Upon termination:

      1. The Dealer shall cease using the Supplier’s trademarks and promotional materials;

      2. The Supplier shall repurchase unsold stock at mutually agreed terms, if applicable.

  14. DISPUTE RESOLUTION & GOVERNING LAW

    1. Any disputes shall be resolved amicably through mutual consultation.

    2. Failing such resolution, disputes shall be referred to arbitration in accordance with the [Arbitration and Conciliation Act, 1996] by a sole arbitrator appointed mutually by the Parties.

    3. This Agreement shall be governed by and construed in accordance with the laws of [Jurisdiction], and the courts at [City] shall have exclusive jurisdiction.

  15. MISCELLANEOUS

    1. This Agreement constitutes the entire agreement between the Parties and supersedes all prior arrangements.

    2. Any amendments shall be made only in writing and signed by both Parties.

    3. Neither Party may assign its rights or obligations without the prior written consent of the other Party.

IN WITNESS WHEREOF, the Parties have executed this Agreement on the day and year first above written.


For and on behalf of the Supplier:

Name: ________

Designation: ________

Signature: ________

Date: ________


For and on behalf of the Dealer:

Name: ________

Designation: ________

Signature: ________

Date: ________