With the Sales Concession Agreement, a manufacturer/wholesaler ( grantor ) sells his products to another entrepreneur ( dealer ) who buys and resells them on the market, in his own name, and on his own behalf.
The sales concession contract is an atypical contract widely used as a tool for the distribution of goods. Therefore, not being governed by a specific law, it is necessary to regulate within the contract all the essential aspects of the relationship including the territory of resale, the exclusivity, the minimum quantity of products to be purchased, etc.
When Using the License Agreement
The sales concession contract is used for very different realities, from large distribution to small retailers. This contract is used to distribute both goods materials or intangible (eg. Software), which can be resold to the public. For example, an IT company may use the software license agreement to distribute its products. This contract can also be used for sales abroad with foreign partners, as an international sales concession contract.
In the sales concession, the sale can be limited to only one dealer in a certain area, in this case, it is an exclusive sales concession contract.
With the sales concession contract, the grantor is able to exploit the potential of new markets without sustaining large investments, making use of (local) dealers who share the business risks with him. On the other hand, the latter will market a product already known in the market without having to invest in the production, research, and development of the product.
The sales concession should not be confused with the agency agreement. The agent acts as an intermediary and acts as a representative in the name and/or on behalf of the manufacturer without purchasing the goods and not assuming the relative risks. The sales concession must also be distinguished from the estimation contract in which the reseller will pay the price of the products only after their resale. On the other hand, in the event that a manufacturer does not want to limit himself to distributing his products through third-party resellers, but intends to replicate his commercial formula and open commercial businesses under his own brand, he will have to use thefranchise agreement .
What the sales concession agreement model contains
Our Concession Agreement meets all legal requirements . The main clauses included concern:
- Products and territory : all the relevant information can be entered directly in the text of the contract or in an attachment;
- Purchase objectives : the concessionaire undertakes to purchase a minimum quantity of products over the course of each year;
- Obligations of the dealer: the choice to include after-sales assistance, the possibility of appointing agents or other dealers, the obligation to advertise at his own expense or at the expense of the manufacturer, etc .;
- Non-compete obligation: the option of obliging the licensee not to distribute products competing with those of the manufacturer;
- Exclusive of the grantor: the possibility of the grantor to undertake to sell the goods exclusively to the concessionaire, possibly reserving the right to sell directly to certain customers;
- Prices and payments: indication of prices and discounts to the dealer and the choice to pay by bank transfer/check or with payments guaranteed by documentary credit;
- Trademarks: the possibility of the distributor to use the licensor’s trademarks;
- Warranty for product defects: the choice of including the warranty clause in the contract as governed by Community legislation or of inserting customized rules in the annex;
- Duration: choice of the duration of the agreement;
- Withdrawal: the possibility for both parties to dissolve the contract with given notice.
At the end of the interview, we will guide you step by step through all the necessary subsequent steps.
Information you need
To complete the document, all the data of the parts and products under concession are required (e.g. price of the products, minimum purchase quantity, use of the brand).
The document can be modified in all its parts without time limits. Don’t worry so if you don’t have all the information available during the interview, you can always enter it later.
- Exclusive Sale Concession Agreement
- Software Sales License Agreement
- International Sales Concession Agreement
- Distribution contract
- Contract for Authorized Reseller
- Distribution Agreement, Distribution Contract, Distributor Agreement, Distributor Contract
- International Distribution Agreement, International Distributor Agreement
Other useful templates and facsimiles
- Agency Agreement: to engage an agent to sell a company’s products or services
- Business Procurement Agreement: to allow a partner to promote a company’s products or services
- Contract for the sale and purchase of movable goods: to transfer the ownership of any movable property to a buyer
- Estimation Contract or Sales Account: to deliver products to a reseller who will pay the price only after having sold them to the end customer
- Franchising contract: to create a network of affiliated points of sale and spread your products
- User License Agreement: to use any intellectual property right (trademark, patent, know-how, design, software etc.)