A dealership agreement is a contract that outlines the terms and conditions between a manufacturer or distributor and a dealer. The agreement typically includes details such as territory, payment terms, warranties, and obligations of both parties. In this article, we will provide a sample format of a dealership agreement.
1. Identification of the Parties
The dealership agreement should begin with the identification of both parties. It should include the full legal names of the manufacturer or distributor and the dealer. It should also state the addresses of both parties and their contact information.
2. Territory
The agreement should specify the geographic territory in which the dealer is authorized to sell the manufacturer`s or distributor`s products. The territory may be exclusive or non-exclusive depending on the agreement. Additionally, the agreement may include provisions for expanding or contracting the territory.
3. Products
The agreement should describe the products that the dealer is authorized to sell. This can include the types of products, models, and variations. Additionally, the agreement may specify any limitations on the products that the dealer can sell.
4. Obligations of the Manufacturer or Distributor
The agreement should outline the obligations of the manufacturer or distributor. This includes providing the dealer with sufficient inventory, technical assistance, training, and marketing materials. The manufacturer or distributor should also ensure that the products meet all local, state, and federal regulations.
5. Obligations of the Dealer
The agreement should also outline the obligations of the dealer. This includes maintaining adequate inventory levels, adhering to pricing policies, providing customer service, and following all local, state, and federal regulations. Additionally, the dealer should market and promote the products in a manner consistent with the manufacturer`s or distributor`s brand.
6. Payment Terms
The agreement should specify the payment terms for the dealer. This includes the dealer`s discount, payment due dates, and any fees or charges associated with the products. Additionally, the agreement may include provisions for minimum sales volume or performance requirements.
7. Termination and Renewal
The agreement should include provisions for termination and renewal. This includes the circumstances that would allow for termination of the agreement, the notice required for termination, and any obligations after termination. The agreement may also include provisions for automatic renewal or renegotiation of the agreement.
Conclusion
A dealership agreement is a critical document that establishes a relationship between a manufacturer or distributor and a dealer. The agreement should be detailed and comprehensive to ensure that both parties understand their obligations and responsibilities. By using this sample format, you can create a dealership agreement that protects your interests and sets the stage for a successful business relationship.
