The Direct Selling Agreement serves as the foundational document for establishing and regulating the relationship between direct selling companies and their independent distributors in India. This agreement is essential for companies operating direct selling or multi-level marketing business models, ensuring compliance with India's Direct Selling Rules 2021, Direct Selling Guidelines 2016, and other relevant regulations. The document outlines crucial aspects including commission structures, territorial rights, product policies, compliance requirements, and operational procedures. It provides necessary legal protection for both parties while ensuring adherence to consumer protection laws and ethical business practices mandated by Indian authorities.
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1. Parties: Identification of the Direct Selling Entity and the Direct Seller, including complete details and registration information
2. Background: Context of the agreement, brief description of the business model, and purpose of the arrangement
3. Definitions: Definitions of key terms used throughout the agreement, including specific direct selling terminology
4. Appointment and Territory: Terms of appointment as direct seller and defined territory of operation
5. Rights and Obligations of Direct Seller: Comprehensive list of direct seller's duties, responsibilities, and permitted activities
6. Company Obligations: Obligations of the direct selling entity including training, support, and product supply
7. Product Terms: Details about products, pricing, ordering process, and inventory management
8. Commission Structure: Detailed breakdown of commission calculations, payment terms, and conditions
9. Compliance Requirements: Mandatory compliance with Direct Selling Rules, consumer protection laws, and other regulations
10. Term and Termination: Duration of agreement, renewal terms, and termination conditions
11. Confidentiality: Protection of confidential information and trade secrets
12. Non-Compete and Non-Solicitation: Restrictions on competitive activities and solicitation of other direct sellers
13. Representations and Warranties: Standard representations and specific warranties related to direct selling
14. Dispute Resolution: Process for handling disputes, including mediation and arbitration procedures
15. Governing Law: Specification of Indian law as governing law and jurisdiction
1. Buy-Back Policy: Terms for product returns and inventory repurchase, required if company offers buy-back option
2. Digital Marketing Guidelines: Rules for online promotion and social media usage, needed if digital marketing is permitted
3. International Operations: Additional terms for cross-border activities, required for international direct selling
4. Training Requirements: Specific training obligations and certification requirements, if mandatory training is provided
5. Data Protection: Detailed data protection and privacy terms, necessary if handling sensitive personal data
6. Performance Targets: Sales targets and performance metrics, if applicable to the business model
7. Customer Service Standards: Customer service requirements and standards, if direct seller handles customer support
1. Schedule 1 - Product List: Comprehensive list of approved products with descriptions and pricing
2. Schedule 2 - Commission Structure: Detailed commission calculations, bonus structures, and payment terms
3. Schedule 3 - Territory Map: Geographical boundaries of authorized territory with any exclusions
4. Schedule 4 - Code of Ethics: Direct selling code of conduct and ethical business practices
5. Schedule 5 - Operating Procedures: Standard operating procedures and compliance requirements
6. Schedule 6 - Marketing Guidelines: Approved marketing materials and promotional guidelines
7. Appendix A - Registration Forms: Standard forms for direct seller registration and documentation
8. Appendix B - Training Manual: Training requirements and certification procedures
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