Standard Distributor Agreement Template for Philippines

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Key Requirements PROMPT example:

Standard Distributor Agreement

"I need a Standard Distributor Agreement for our Philippine tech company to appoint an exclusive distributor for our software products in Metro Manila, with a minimum annual purchase commitment of 10M PHP and the agreement to commence on March 1, 2025."

Document background
The Standard Distributor Agreement is a fundamental commercial contract used to establish and govern the relationship between suppliers/manufacturers and their distributors in the Philippines. This agreement is essential when a company wishes to expand its market reach through third-party distribution channels while maintaining control over how its products are sold and distributed. The document comprehensively addresses key aspects such as territory rights, performance expectations, financial terms, and compliance with Philippine regulations, including the Civil Code of the Philippines, Consumer Act, and Competition Act. It is particularly relevant for both domestic and international companies seeking to establish or formalize distribution networks in the Philippine market, providing a structured framework for successful business relationships while ensuring compliance with local legal requirements and business practices.
Suggested Sections

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 the parties' businesses, and purpose of the distribution arrangement

3. Definitions: Definitions of key terms used throughout the agreement

4. Appointment and Territory: Terms of distributor appointment, territory definition, and exclusivity/non-exclusivity provisions

5. Term and Renewal: Duration of the agreement and conditions for renewal

6. Distributor Rights and Obligations: Core responsibilities including sales targets, marketing requirements, customer service standards, and reporting obligations

7. Supplier Rights and Obligations: Supplier's commitments regarding product supply, support, training, and technical assistance

8. Product Orders and Delivery: Procedures for ordering, minimum purchase requirements, delivery terms, and acceptance protocols

9. Prices and Payment Terms: Pricing structure, payment conditions, currency, and invoice requirements

10. Intellectual Property Rights: Usage rights for trademarks, patents, and other IP, including restrictions and protections

11. Confidentiality: Protection of confidential information and trade secrets

12. Warranties and Indemnities: Product warranties, representations, and mutual indemnification provisions

13. Termination: Grounds for termination, notice requirements, and post-termination obligations

14. Governing Law and Dispute Resolution: Choice of Philippine law and dispute resolution mechanisms

15. General Provisions: Standard boilerplate clauses including force majeure, notices, and assignment

Optional Sections

1. E-commerce and Online Sales: Include when distribution involves online sales channels, covering platform requirements and restrictions

2. Product Training and Support: Include when complex products require specific training programs and ongoing technical support

3. Marketing and Promotion Requirements: Include when specific marketing commitments or cooperative advertising programs are required

4. Sub-distributors: Include when the distributor is permitted to appoint sub-distributors

5. Data Protection: Include when personal data processing is a significant aspect of the distribution relationship

6. Import/Export Compliance: Include for international distribution arrangements requiring specific compliance measures

7. Insurance Requirements: Include when specific insurance coverage is required beyond standard business insurance

8. Non-Competition: Include when restricting distributor's ability to sell competing products

9. Product Customization: Include when products may be customized for local market requirements

Suggested Schedules

1. Product Schedule: Detailed list of products covered by the agreement, including specifications and prices

2. Territory Map: Detailed geographical definition of the distribution territory

3. Performance Targets: Specific sales targets, KPIs, and measurement criteria

4. Commission Structure: Detailed breakdown of commission rates and calculation methods

5. Technical Requirements: Technical specifications, quality standards, and compliance requirements

6. Service Level Agreement: Detailed service standards and response time requirements

7. Trademark Usage Guidelines: Specific rules and requirements for using supplier's trademarks

8. Return and Warranty Procedures: Detailed procedures for handling returns and warranty claims

9. Reporting Templates: Standard forms and templates for required periodic reports

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions
Clauses
Relevant Industries

Consumer Goods

Electronics and Technology

Automotive

Pharmaceuticals

Food and Beverage

Industrial Equipment

Construction Materials

Healthcare Products

Telecommunications

Agricultural Products

Fashion and Apparel

Home Appliances

Software and Digital Products

Relevant Teams

Legal

Sales

Commercial

Business Development

Operations

Supply Chain

Finance

Compliance

Marketing

Distribution Operations

Contract Administration

Relevant Roles

Chief Executive Officer

Commercial Director

Sales Director

Business Development Manager

Legal Counsel

Contracts Manager

Supply Chain Manager

Operations Director

Channel Manager

Distribution Manager

Compliance Officer

Chief Financial Officer

Regional Sales Manager

Product Manager

Marketing Director

Industries
Civil Code of the Philippines (Republic Act No. 386): Governs general contract formation, obligations, and contractual relationships between parties, including provisions on validity, performance, and breach of contracts
Consumer Act of the Philippines (Republic Act No. 7394): Regulates consumer product quality and safety standards, labeling requirements, and warranty obligations that distributors must comply with
Competition Act (Republic Act No. 10667): Addresses anti-competitive practices, including exclusive distribution arrangements, territorial restrictions, and pricing practices
Intellectual Property Code of the Philippines (Republic Act No. 8293): Protects trademarks, patents, and other IP rights that may be licensed to distributors as part of the agreement
Tax Code of the Philippines (National Internal Revenue Code): Governs taxation aspects of distribution arrangements, including VAT, income tax, and other applicable taxes
Data Privacy Act of 2012 (Republic Act No. 10173): Regulates the collection, processing, and storage of personal data that may be shared between parties in the distribution relationship
Price Act (Republic Act No. 7581): Regulates pricing mechanisms and prohibits certain pricing practices that may affect distribution arrangements
Electronic Commerce Act (Republic Act No. 8792): Governs electronic transactions and digital signatures if the distribution agreement involves online or electronic commerce
Foreign Investments Act (Republic Act No. 7042): Relevant if the distribution agreement involves foreign parties, regulating foreign participation in business activities
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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