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While it is generally recommended to have a distribution agreement in place, it is not always a legal requirement. The need for a distribution agreement depends on various factors, including the nature of the products or services, the relationship between the parties, and applicable laws and regulations.
In a written distribution contract, there will usually be a right for either party to terminate the contract ?for convenience? by giving a period of notice (such as six or 12 months' notice).
Software distribution agreements specifically allow distributors to market and sell the developer's software to end users.
A distribution agreement is one under which a supplier or manufacturer of goods agrees that an independent third party will market the goods. The distributor buys the goods on their own account and trades under their own name.
In conclusion, a license agreement is a legal document that grants permission to use a specific piece of intellectual property, while a distribution agreement is a legal document that outlines the terms of the distribution of a particular physical product.
The basic elements of a distribution agreement include the term (time period for which the contract is in effect), terms and conditions of supply and the sales territories covered by the agreement (regions within the U.S. and/or international markets).
An important difference between a distribution agreement and a purchase agreement is that the purpose of the purchase agreement is to transfer ownership of a product, while the distribution agreement is aimed at a long-term collaboration between the parties to resell the products.