Distribution Agreement Format
Appoint a distributor to buy and resell your products in a defined territory, with targets, margins and termination terms.
What it is
Under a distribution agreement, a manufacturer or brand owner (the principal) sells products to a distributor, who buys them on its own account and resells them in a territory. Unlike an agent, the distributor takes ownership of the goods and earns a margin rather than a commission. The agreement sets the territory, whether the appointment is exclusive, minimum purchase commitments, pricing and margins, credit, marketing support and how either side can exit.
When it is used
- Appointing distributors or stockists for a region or channel.
- Entering a new market without setting up a branch.
- Converting an informal distributor relationship into a written contract.
What the template covers
- Principal and distributor details and GSTINs
- Products and territory
- Exclusive or non-exclusive appointment
- Minimum quarterly purchase and margin
- Credit period, pricing and orders
- Trade marks, marketing and reporting
- Term, termination notice and jurisdiction
Details you will need
The generator asks for the following. Fields marked with an asterisk in the form are required; the rest can be left blank and filled in later in Word.
Agreement Details
Agreement Date; Place; Effective Date; Term (years)
Principal (Manufacturer)
Principal Name; Principal Address; Principal GSTIN
Distributor
Distributor Name; Distributor Address; Distributor GSTIN
Products
Description of Products; Territory; Exclusivity
Commercial
Minimum Quarterly Purchase (₹); Distributor Margin (% on MRP); Credit Period (days)
Termination
Termination Notice (months); Jurisdiction
Stamp duty, registration and filing
Sales to the distributor are supplies on which GST is charged. Exclusive territories, resale price maintenance and refusal to deal are vertical restraints that the Competition Act, 2002 (Section 3(4)) prohibits if they cause an appreciable adverse effect on competition, so draft them with care. Restraints that operate after termination may be void under Section 27 of the Indian Contract Act. Stamp duty depends on the State.
Generate the Distribution Agreement
Fill in the form and download the draft as a Word file. It is a general template, not legal or professional advice; have it reviewed for your facts before you sign or rely on it.
Need this checked against your facts, or the registration or filing that follows? Contact SKAG and Associates
Related documents
Frequently asked questions
What is the difference between a distributor and an agent?
A distributor buys the goods and resells them in its own name, taking the risk. An agent sells on behalf of the principal and earns a commission without owning the goods.
Can a distribution agreement fix the resale price?
Fixing a minimum resale price can raise competition law concerns. Recommending a maximum retail price is common.
Can the principal terminate an exclusive distributor?
Yes, as the termination clause allows. A reasonable notice period helps avoid claims for damages.
This page gives general information for reference only. Laws, stamp duty rates and filing requirements change and differ between States, so confirm the current position for your case. Related: all document templates · free tax calculators · compliance calendar and guides.