Exclusive Distribution Agreement Template and Key Clauses (2026)

What is an exclusive distribution agreement, and when do you need one? An exclusive distribution agreement is a contract in which a supplier appoints one distributor as the only distributor for its products in a defined territory or market, and the distributor buys and resells those products there. In return for exclusivity, the distributor usually commits to promoting the products, meeting sales targets, and sometimes not selling competing products. It is a common way for a manufacturer to enter a new region through a single committed partner who invests in building the market. You need an exclusive distribution agreement when you want one partner to focus on your products in a territory and you are willing to give up appointing others there. Exclusivity is powerful because it motivates the distributor to invest, but it cuts both ways: the supplier cannot easily bring in a second distributor, and the distributor is tied to performing. The agreement has to define the territory precisely, set targets that justify the exclusivity, and stay within competition-law limits on resale pricing and market restrictions. This article is general guidance, not legal advice. Distribution arrangements engage competition, consumer-protection, tax and sometimes foreign-investment rules that vary by jurisdiction, so have a qualified professional review any agreement before you rely on it. ## Exclusive distribution agreement template Copy the block below and fill the bracketed fields. ```

EXCLUSIVE DISTRIBUTION AGREEMENT This Exclusive Distribution Agreement ("Agreement") is made on [DATE] BETWEEN: [SUPPLIER NAME], [address] ("Supplier") AND [DISTRIBUTOR NAME], [address] ("Distributor") 1. APPOINTMENT AND EXCLUSIVITY The Supplier appoints the Distributor as its exclusive distributor for the Products in the Territory. During the Term the Supplier will not appoint another distributor for, nor itself actively sell, the Products in the Territory, except [reserved customers / online, as set out in Schedule 1]. 2. TERRITORY The Territory is [TERRITORY]. The Distributor will not actively solicit sales outside the Territory, but may fulfil unsolicited orders, to the extent competition law requires this freedom. 3. PRODUCTS The Products are listed in Schedule 2, as updated by the Supplier with notice. 4. TERM AND RENEWAL The Term is [N] years from [DATE], renewing for [N] years if the Distributor has met the targets and is not in breach. 5. MINIMUM TARGETS The Distributor will purchase or sell at least the minimum volumes in Schedule 3. If the Distributor misses targets, the Supplier may [convert exclusivity to non-exclusive / reduce the Territory / terminate]. 6. PRICING The Supplier sells to the Distributor at the prices in Schedule 2. The Distributor sets its own resale prices. [Any recommended resale price is a recommendation only and not binding.] 7. ORDERS, DELIVERY AND PAYMENT Orders, delivery terms (Incoterms [term]), title, risk and payment ([N] days) are as set out in Schedule 4. 8. DISTRIBUTOR OBLIGATIONS The Distributor will promote the Products actively, keep adequate stock, provide after-sales support, maintain trained staff, and comply with applicable law. [Non-compete: the Distributor will not distribute competing products during the Term, to the extent law allows.] 9. SUPPLIER OBLIGATIONS The Supplier will supply the Products, provide marketing support and product training, and honour product warranties per Schedule 5. 10. INTELLECTUAL PROPERTY AND BRAND The Supplier grants a limited licence to use its marks only to distribute the Products. All goodwill stays with the Supplier. 11. WARRANTIES, LIABILITY AND INDEMNITY Product warranties are per Schedule 5. Each party indemnifies the other for loss caused by its own breach. Liability caps and exclusions are in Schedule 6. 12. TERMINATION AND CONSEQUENCES Either party may terminate for material breach not cured within [N] days, or on insolvency. On termination the parties handle stock, open orders and the Distributor's use of the marks per Schedule 7. 13. GOVERNING LAW AND DISPUTES This Agreement is governed by the laws of [jurisdiction], with disputes subject to [arbitration seat / courts]. Signed for the Supplier: __________ Signed for the Distributor: __________ Name / title / date Name / title / date

- **Territory (clause 2).** Define the territory precisely. Note that competition law in many places protects a distributor's freedom to fulfil unsolicited orders from outside its territory (passive sales), even where active selling outside is restricted.
- **Minimum targets (clause 5).** Exclusivity should be earned. Set realistic minimum volumes and say what happens if they are missed, usually converting to non-exclusive, shrinking the territory, or termination.
- **Pricing (clause 6).** Sell to the distributor at agreed prices, but let the distributor set its own resale price. Imposing a binding minimum resale price is a serious competition risk in most jurisdictions.
- **Non-compete (clause 8).** A ban on handling competing products is common in exclusive distribution, but its length and scope are limited by competition law, so keep it proportionate. ## Key clauses explained, and how each side negotiates them - **Exclusivity versus targets.** The distributor wants firm exclusivity; the supplier grants it only against minimum targets with a right to downgrade exclusivity if targets are missed. This is the central bargain of the agreement.
- **Resale price.** Suppliers sometimes want to control resale prices to protect brand positioning. Competition law generally forbids a binding minimum resale price, so suppliers are limited to recommended or maximum prices. Distributors should resist any binding floor.
- **Online and passive sales.** Suppliers want to limit where the distributor sells; competition law in many regions protects passive sales and online selling. Draft territory restrictions to bar active solicitation outside the territory, not to block unsolicited orders.
- **Non-compete and term.** Suppliers want a long non-compete and term; competition law caps how long and how broad a non-compete can be. Keep both proportionate to avoid the clause being unenforceable. ## Common mistakes to avoid - Granting exclusivity with no minimum targets and no way to claw it back.
- Imposing a binding minimum resale price, which competition law treats as a serious restraint.
- Blocking passive and online sales in a way competition law does not allow.
- A non-compete that is too long or too wide to be enforceable.
- Loose territory boundaries and no list of carve-outs, so the parties argue over reserved customers and channels. ## A note on jurisdiction Distribution rules, especially competition law, vary by jurisdiction. In India, an exclusive distribution agreement is a vertical agreement under section 3(4) of the Competition Act, 2002, and is assessed on a rule-of-reason basis for whether it causes an appreciable adverse effect on competition, with market power a key factor; the underlying contract sits under the Indian Contract Act, 1872. In the European Union and the UK, vertical agreements are assessed under block-exemption rules that protect passive sales and restrict resale price maintenance, with market-share thresholds. The United States and other markets have their own antitrust regimes. Because resale pricing, non-compete limits and restrictions on passive sales differ, treat these as jurisdiction-specific, keep binding price and territory restraints out unless local law clearly allows them, and say "varies by jurisdiction" where you are unsure. Last verified October 2026. ## Where a contract workspace helps A template gets you a solid exclusive distribution agreement. The ongoing work is everything after signing: tracking targets and renewal windows across distributors, checking each agreement for a resale-price or non-compete term that competition law would not allow before you sign, keeping exclusivity carve-outs consistent, and keeping versions straight as you add territories. One AI workspace tuned to how your business sells through distributors can hold the whole picture: drafting an exclusive distribution agreement from your own terms, reviewing each for a resale-price, non-compete or passive-sales restriction that competition law may not allow, and tracking targets and renewal windows as you add territories. [Adira](https://adiralaw.com) is one AI workspace built around distribution agreements like this. This template is enough to put a fair exclusive distribution agreement in place; a workspace just makes drafting, review and tracking one connected job.