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A Distribution Agreement is an agreement entered into between two parties wherein one party (the "distributor") agrees to distribute the products of the other party (the "supplier").
The supplier is an individual or organization that supplies or sells the product to the distributor. Suppliers are usually the manufacturers or producers of the product. On the other hand, the distributor is an individual or organization that purchases the product for the purpose of "distributing" the same by re-selling it to end consumers or to other distributors. In a Distribution Agreement, the ownership of the products is transferred to the distributor.
In a Distribution Agreement, the parties outline their expectations for the sale and distribution of the products as well as the general behavior and bounds of the relationship between them.
If the parties want to enter into an agreement wherein the ownership of the products will remain with the supplier and the distributor sells the products only on behalf of the supplier then the parties should enter into a Consignment Agreement. In a Consignment Agreement, the distributor (called the "consignee") does not purchase the products from the supplier (called the "consignor") and only has the obligation to remit the price paid for by the consumer (minus any fee that the consignee takes as their compensation for selling the products) once the products has been sold.
How to use this document
This document can be completed by either the supplier or the distributor. In either case, the user should enter all the information necessary to complete the document. Once completed, the user should print at least three (3) copies of the document.
If there are any attachments to the document, the attachments should be marked and attached to all the copies of the document. Marking the attachments means identifying the attachments by writing the words "Annex "A", Annex "B", and so on, on the attachments.
The user should use the document as a guide to properly mark the attachments. For convenience, the attachments have been emphasized in bold. Once the document has been printed and the attachments attached, if any, the parties should review and, if everything is found to be correct, sign all original copies of the document.
This document also contains an Acknowledgment. An Acknowledgment is an act of a person before a notary public stating that the signature on a document was voluntarily affixed by him and he executed the document as his free and voluntary act. Acknowledging a document before a notary public turns document into a public document. Public documents are generally self-authenticating, meaning no other evidence will be needed to prove the execution of the document. If the document will be acknowledged, the parties should present themselves before a notary public with all the copies of the document and swear an oath to the foregoing.
If the document is acknowledged, the notary public will keep one original copy of the document. The supplier and the distributor should each keep a copy of the document for their records.
The law on Sales found in the Civil Code of the Philippines applies to this document. Other laws, such as the Philippine Competition Act (Republic Act No. 10667), may also apply.
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