Dealership Agreement Template and How to Draft One (2026)

What is a dealership agreement? A dealership agreement lets a dealer buy a manufacturer's or brand owner's products and resell them, usually in a defined territory, on its own account. The dealer takes title to the goods, holds stock, and makes its margin on resale. That is the defining feature: a dealer buys and resells as principal, so it is different from an agent, who sells on the principal's behalf for commission and never owns the goods. Why the distinction matters: in a true dealership the principal is generally not liable for the dealer's dealings with customers, and the relationship is principal-to-principal. If the paperwork says "dealership" but the substance is agency, the law can treat it as agency, with different tax and liability consequences. Draft it to match reality. This is general information, not legal advice. For an exclusive or long-term dealership, have the final document reviewed by a lawyer. ### Dealership and Indian competition law Dealership terms can engage the Competition Act, 2002. Vertical arrangements between a supplier and a dealer, exclusive supply, exclusive distribution, tie-ins and refusal to deal are judged under section 3(4) on a "rule of reason", meaning they are not automatically illegal but can be challenged if they cause an appreciable adverse effect on competition. Resale price maintenance, where the supplier fixes the minimum price at which a dealer may resell, is specifically listed and is a common risk area. Set a maximum retail price or a recommended price, not a floor the dealer must not go below, and take advice where market share is significant. Rules differ by jurisdiction, so check local competition law for the UK, Ireland, Singapore, Australia or the US. ## Dealership agreement template ```

DEALERSHIP AGREEMENT This Agreement is made on [DATE] Between [SUPPLIER / BRAND OWNER NAME], [address] ("the Supplier") and [DEALER NAME], [address] ("the Dealer"). 1. APPOINTMENT The Supplier appoints the Dealer as a [non-exclusive / exclusive] dealer of the Products in the Territory. The Dealer buys and resells the Products on its own account, as principal, not as the Supplier's agent. 2. PRODUCTS AND TERRITORY Products: [list or category]. Territory: [area]. 3. TERM AND RENEWAL [period] from [date], renewable by written agreement on [n] days' notice before expiry. 4. PURCHASE AND SUPPLY The Dealer orders Products on the Supplier's current price list. Title and risk pass to the Dealer on [delivery / dispatch]. Payment terms: [advance / [n] days credit]. Minimum order: [quantity]. 5. PRICING AND RESALE The Dealer sets its own resale prices. The Supplier may recommend a price or set a maximum retail price but shall not fix a minimum resale price. 6. TARGETS The Dealer shall use best efforts to buy and sell at least [target] of Products per [period]. Failure to meet targets for [n] periods is a ground for review or non-renewal. 7. DEALER'S OBLIGATIONS The Dealer shall: promote the Products; maintain [showroom / stock / service capability]; honour warranties per Supplier policy; follow the Supplier's brand guidelines; not sell competing products [if exclusive]; comply with law. 8. SUPPLIER'S OBLIGATIONS The Supplier shall supply Products per accepted orders, provide marketing support and training as agreed, and honour product warranties. 9. INTELLECTUAL PROPERTY The Dealer may use the Supplier's trade marks only to resell the Products and per the Supplier's guidelines. All IP remains the Supplier's. The Dealer stops all use on termination. 10. LIABILITY Each party is responsible for its own acts. The Supplier is not liable for the Dealer's dealings with customers. Product-defect liability is handled under the Supplier's warranty and applicable consumer law. 11. TERMINATION Either party may end this Agreement on [n] days' notice, or immediately for material breach, insolvency or loss of licence. On termination the Dealer stops using the marks and the parties settle outstanding stock per Clause 12. 12. STOCK ON TERMINATION The Supplier may [buy back / allow sell-through of] unsold Products in good condition at [agreed price] within [n] days. 13. GOVERNING LAW AND DISPUTES Governed by the laws of India. Disputes go to the courts at [city] or to arbitration seated at [city] under the Arbitration and Conciliation Act, 1996. Signed for the Supplier: ____________ Witness: ____________ Signed by the Dealer: ____________ Witness: ____________

- **Clause 4 (purchase and supply):** fix when title and risk pass, the credit terms and any minimum order. These drive cash flow and who bears the risk of stock.
- **Clause 5 (pricing):** let the dealer set resale prices. Use a maximum or recommended price, never a mandated minimum, to stay clear of resale price maintenance.
- **Clause 6 (targets):** make targets realistic and tie the consequence of a miss to review or non-renewal, not an immediate penalty.
- **Clause 7 (non-compete):** a bar on selling competing products is common in an exclusive dealership, but keep it proportionate and be aware of the competition-law limits.
- **Clause 9 (IP):** the dealer uses the marks only to resell and must stop on termination. Protect the brand clearly.
- **Clause 12 (stock on termination):** decide in advance what happens to unsold stock, because this is where dealership break-ups turn bitter. ## Dealer, distributor or agent? These terms are used loosely. A dealer usually sells to end customers; a distributor usually sells on to retailers or dealers; both buy and resell as principal. An agent never owns the goods and is paid commission. Choose the structure that matches how the business actually runs, and make the agreement say so, because the tax and liability treatment follows the substance. ## Where a contract workspace helps A template gets you one clean dealership agreement. The ongoing work is harder: tracking renewal dates and targets across a network of dealers, keeping pricing and exclusivity terms consistent and competition-law safe, managing stock buy-back on exits, and keeping every amended territory and price list straight. Drafting a dealership agreement tuned to how your company distributes, flagging a minimum-price or exclusivity term that risks competition law, editing terms in plain language, keeping a version history across the network, and tracking target, renewal and termination dates is the kind of job one AI workspace can hold in a single place, and [Adira](https://adiralaw.com) is one such tool. This template alone is enough to document one dealership well; one connected place simply keeps every dealer agreement, its terms and its dates together.