Distribution Agreement Termination Letter Example

we inform you that from [date], we no longer need the [company name] services. With this notification, we respect the minimum termination period required by our agreement. Your company has provided us with a good service in the past, but we have chosen to terminate our business contract for [reasons]. A distribution agreement allows a distributor to transport or resell products purchased by a manufacturer. The manufacturer supplies the products and the distributor acts as a seller, either as a wholesaler or as a distributor. The distribution agreement may be exclusive, with a single distributor using a manufacturer for a particular product or region. The agreement may also allow several distributors to collaborate with several manufacturers. The manufacturer generally states the terms of the agreement, including all marketing tactics or product licensing procedures, and the distributor agrees to comply with these conditions. A manufacturer relies on a distributor to transport a product to its customers. The distributor depends on the manufacturer`s revenues to support its activities. Both parties must agree on how the distributor will transport the products and how much the manufacturer will pay for the service. Where these agreements are no longer manageable, the parties can terminate the distribution contract and either establish a new agreement or terminate the relationship.

The easiest way to terminate a distribution contract with a minimum of Rancor is to include a termination clause covering the termination basis, the reason for termination, the amount of prior notice required and any compensation that each party must pay. The provisions must clearly state the termination dates – for example, two years from today`s date – and whether or not the distribution contract ends in the event of a breach of a specific clause in the contract. If the agreement contains a “breach termination,” this clause must also contain clear information about what constitutes an infringement, requirements for injury notifications and the time it takes to remedy the infringement. A distribution contract is a contract for the distribution of products purchased by a manufacturer. The manufacturer is the supplier and the distributor serves as distributor and seller. A producer may have an exclusive agreement with an individual distributor or enter into several distribution agreements.