Reseller Agreement in Philippines: Template, Key Clauses and Local Law (2026)

What a reseller agreement does A reseller agreement lets one business (the reseller) buy or license a supplier's products or services and sell them on to its own customers, in its own name, for a margin. The reseller is an independent business, not an employee or an agent. It is the standard way a software vendor, hardware maker or service provider reaches a new market through a local partner who already has the customers and the sales reach. In the Philippines a reseller arrangement is a commercial contract governed by the Civil Code (Republic Act No. 386), shaped by competition law, intellectual property rules and tax, including the newer VAT rules on digital services. This page explains how to build one that works. It is general information, not legal advice; confirm specifics with a Philippine lawyer. ## Reseller, distributor or agent: choose the model first The labels change the legal relationship, so decide before drafting. - A reseller buys or licenses and sells on in its own name, earning a margin and carrying the customer relationship and often the payment risk.

• A distributor is similar and usually holds stock to resell, a term common for physical goods.
• An agent does not buy or sell on its own account. It introduces or concludes sales for the supplier and earns a commission, and can create legal obligations for the supplier. Getting this wrong creates confusion over who sets the price, who carries risk and who owes duties to the end customer. Decide the model, then draft to it. ## Is a reseller agreement binding in the Philippines? Yes. Under the Civil Code a contract needs consent, a certain object and a cause (Article 1318), and Article 1306 gives parties freedom to agree terms within the limits of law and public policy. A reseller agreement is a business-to-business contract, so consumer-specific protections under the Consumer Act (Republic Act No. 7394) generally apply to the reseller's dealings with end consumers rather than between supplier and reseller. ## Key clauses in a Philippine reseller agreement ### Appointment, territory and exclusivity State what the reseller may sell, in which territory, and whether the appointment is exclusive, non-exclusive or sole. Pair exclusivity with minimum purchase or sales targets, and say what happens if targets are missed. Be careful with exclusivity and territory limits because of competition law (see below). ### Pricing, margin and payment Set the reseller's pricing: a discount off list, a wholesale price, or a margin band. A supplier can recommend a resale price but should be cautious about fixing it, which can raise competition concerns. Cover payment terms, currency, credit limits and late payment. ### Product supply, licences and resale rights For software and digital products, the reseller needs a clear right to resell licences or subscriptions, and the end customer needs a valid licence from the supplier. Define whether the reseller sells the supplier's end-user licence directly or resells a subscription the supplier fulfils. Software is protected by copyright under the Intellectual Property Code (Republic Act No. 8293), so the right to copy, distribute or sublicense must be granted expressly. ### Trademark and brand use Grant a limited, revocable licence to use the supplier's name and marks only for approved resale and marketing, with brand guidelines, and make clear the reseller gets no ownership and must stop using them on termination. ### Obligations and data privacy Set the reseller's sales, support and reporting duties and the supplier's supply, training and update duties. Where the reseller shares end-customer personal data with the supplier, the Data Privacy Act of 2012 (Republic Act No. 10173) applies, so handle that data under appropriate terms. ### Tax, including VAT Services in the Philippines are generally subject to 12 percent value added tax, and the VAT on Digital Services Act (Republic Act No. 12023), effective 18 October 2024 with implementing rules in Revenue Regulations No. 3-2025, applies 12 percent VAT to digital services, including those from non-resident providers consumed in the Philippines. State who accounts for which taxes and whether prices are inclusive or exclusive, so margins are protected. ### Liability, warranties and indemnities The supplier usually warrants the product and indemnifies the reseller against intellectual property infringement claims; the reseller usually indemnifies the supplier for its own conduct, such as unauthorised promises. Cap liability on both sides with sensible carve-outs. ### Term, termination and post-termination Set the term and renewal, termination for breach and insolvency, and the exit: run-off of existing customer contracts, return or sell-through of stock, stopping use of marks, and who keeps the end-customer relationship, especially for subscriptions. ### Competition law The Philippine Competition Act (Republic Act No. 10667), enforced by the Philippine Competition Commission, prohibits anti-competitive agreements and abuse of dominance. Resale price maintenance and certain exclusivity or territory restrictions can raise concerns. Keep pricing guidance as a recommendation and take advice before imposing hard resale price or territory limits. ### Governing law and disputes Choose Philippine law where the deal is centred there, and decide between the courts and arbitration under the Alternative Dispute Resolution Act of 2004 (Republic Act No. 9285). ## A simple reseller agreement structure 1. Parties, recitals and definitions

2. Appointment, territory and exclusivity
3. Targets and consequences of missing them
4. Pricing, margin, invoicing and payment
5. Product supply, licences and resale rights
6. Trademark and brand licence
7. Reseller and supplier obligations, reporting and data privacy
8. Tax, including VAT
9. Warranties, liability and indemnities
10. Term, termination and post-termination run-off
11. Competition law compliance
12. Governing law (Philippines) and dispute resolution ## Common mistakes in Philippine reseller agreements - Blurring reseller, distributor and agent, so nobody is sure who carries the customer and the risk.

• Granting exclusivity with no targets, locking the supplier to an underperforming partner.
• Fixing the reseller's resale price or imposing hard territory limits without competition advice.
• Not granting a clear right to resell or sublicense software, so end customers hold invalid licences.
• Ignoring the VAT point, so the 12 percent charge quietly erodes margin. ## Keeping reseller relationships under control A growing channel means many reseller agreements, each with its own territory, margin, targets and renewal date, plus the trademark and licence terms inside them. The hard part is not signing the first partner. It is keeping terms consistent across the channel, spotting the agreement that granted exclusivity without targets, tracking renewals, and knowing which version of each contract is live. That work is the same whether you have three resellers or thirty, and it is far easier when drafting, per-clause risk review, version history and renewal tracking live in one place rather than across folders and inboxes. A single AI contract workspace such as Adira is built around that idea. Adira is India-first today, with other jurisdictions including the Philippines on its roadmap, so for Philippine-specific competition and tax positions you would still confirm the detail with counsel. The point to take is the direction: a channel you can manage is one where every agreement stays in one place, consistent, with its targets and dates in view.