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International agency agreements

An international agency agreement is a contract between a supplier and an independent sales agent acting for them in-market. In general, they are interim agreements that will be replaced by a joint venture or a distribution agreement if the relationship is successful.

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The essential ingredients of agency agreements are:

  • Responsibilities – specify the activities to be carried out by the agent and payments the supplier will make
  • Territory – specify the geographic area or type or class of customer the agent is responsible for
  • Exclusivity – specify whether the agent has exclusive or non-exclusive rights and cover issues such as direct selling by the supplier
  • Performance – set sales targets and consequences if they are not met
  • Products – specify the products covered by the agreement
  • Pricing and payment terms – attach a price schedule to the agreement and specify the currency and payment terms
  • Ordering – cover order placement, acceptance, size and timeframes
  • Promotion – specify the agent’s responsibilities and the support to be provided by the supplier
  • Trademarks and brand names – specify how and when can these by used by the agent
  • Competition – specify whether the agent can handle competitive product lines
  • Legal Issues –  consider product compliance, warranties, insurance and customs payments
  • Term of Agreement

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