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I have been informed by one of my more frugal clients that his company would appreciate a basic rundown of a decent distribution agreement (I know you will be drafting this on your own – don’t) – so here we go.
The following is, only, intended to be a guide for a client reviewing a distribution agreement that was drafted by a Korean-based attorney.
The basic clauses we include in most of our Korean Distribution Agreements are as follows:
- Exclusivity: Exclusive/Non-exclusive
- Territory & Products
- Term of Agreement
- Renewal/Termination
- Pricing & Payment Terms
- Report Requirements
- End-User Disclosure
- Sales Methods Allowed
- Sales Performance
- Legal Compliance (FCPA etc.)
- Competition
- Warranty/Defects
- Return Policies
- Technical & Sales Support
- Marketing Materials & Press Releases
- Intellectual Property – protection of trademarks, copyrights, trade secrets, patents etc.
- Damages – Liquidated Damages
- Breach – Material Breach and ramifications for Breach
- Dispute Resolution -Venue, Arbitration, Choice of Law
- Terms of Sales
- Standard Clauses related to integration, language etc.
This is a decent start. Please, however, don’t take this as enough to just start drafting on your own or picking a draft off the internet. Please, this is no pitch. The few bucks up front getting this done right goes a long way in not having substantial costs and stress in the future.
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