The Non-Exclusive Distribution Agreement is a crucial commercial contract used in the Philippines when a supplier/principal wishes to appoint a distributor to sell their products while retaining the right to appoint other distributors or sell directly in the same territory. This document is essential for businesses expanding their distribution network in the Philippines, whether domestic or international companies, and must comply with Philippine Civil Code requirements and competition laws. The agreement typically includes detailed provisions on territorial rights, product handling, pricing structures, performance expectations, and intellectual property usage, while ensuring compliance with local regulatory requirements. It's particularly important in the Philippine market where distribution networks often involve multiple layers and where competition law compliance is increasingly scrutinized.
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1. Parties: Identification of the Principal/Supplier and Distributor, including full legal names, registration details, and addresses
2. Background: Context of the agreement, brief description of both parties' businesses, and purpose of entering into the distribution arrangement
3. Definitions: Key terms used throughout the agreement, including Products, Territory, Intellectual Property Rights, etc.
4. Appointment and Scope: Terms of non-exclusive appointment, clear statement of non-exclusivity, territorial limits, and scope of distribution rights
5. Term: Duration of the agreement, including commencement date and initial term
6. Orders and Supply: Process for ordering products, lead times, minimum order quantities, and delivery terms
7. Prices and Payment: Pricing structure, payment terms, currency, and price adjustment mechanisms
8. Obligations of Principal: Principal's responsibilities including product supply, support, training, and marketing materials
9. Obligations of Distributor: Distributor's duties including marketing, storage, minimum purchase requirements, and reporting
10. Intellectual Property Rights: Usage rights for trademarks, logos, and other IP, and protection obligations
11. Warranties and Quality Control: Product warranties, quality standards, and handling requirements
12. Confidentiality: Protection of confidential information and trade secrets
13. Termination: Grounds for termination, notice requirements, and consequences of termination
14. Post-Termination: Obligations after termination, including return of materials and handling of remaining inventory
15. General Provisions: Standard clauses including notices, assignment, force majeure, and governing law
1. Performance Targets: Specific sales targets and performance metrics, used when the principal wants to maintain certain performance standards
2. Marketing and Promotion: Detailed marketing obligations and cost-sharing arrangements, used for complex distribution relationships requiring significant marketing effort
3. Training: Specific training requirements and procedures, used when products require technical knowledge or specialized handling
4. Insurance: Specific insurance requirements, used when dealing with high-value products or high-risk territories
5. Anti-Corruption: Detailed anti-corruption provisions, particularly important when dealing with international distribution
6. Data Protection: Specific data protection obligations, used when the distribution involves handling of personal data
7. Sub-Distributors: Rights and conditions for appointing sub-distributors, used when sub-distribution is permitted
8. Competition Compliance: Detailed competition law compliance provisions, particularly important in sectors with strong competition oversight
1. Products: Detailed list of products covered by the agreement, including specifications and pricing
2. Territory: Detailed description of geographical territory and any excluded areas
3. Minimum Purchase Requirements: Specific quantities or values of minimum purchase obligations
4. Performance Criteria: Detailed performance targets and measurement criteria
5. Technical Requirements: Technical specifications for storage, handling, and distribution of products
6. Trademark Usage Guidelines: Specific guidelines for use of principal's trademarks and branding
7. Service Level Requirements: Detailed service levels for order processing, delivery, and customer support
8. Commission Structure: Detailed breakdown of any commission or pricing structures
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