Brad is on the roll of solicitors of England & Wales but does not hold a practising certificate and does not provide legal advice.
Updated June 2026 · England & Wales
England & Wales template
Distribution agreement: merchant version
This is a practical agreement for an arrangement whereby a merchant or a manufacturer appoints a distributor who buys the goods and re-sells on his own account at home or abroad.
Templates are provided by Net Lawman. We may receive a commission at no extra cost to you.
A distribution arrangement sits at the heart of how many products travel from maker to market. When a supplier wants to widen reach without handing a territory to a single partner, a non-exclusive structure often makes commercial sense. It lets the supplier keep selling directly, bring in additional distributors, and scale coverage without being tied to one relationship.
For the distributor, it offers a route to stock and resell products under agreed terms, with defined obligations on both sides. This guide walks through how non-exclusive distribution works in practice under the law of England and Wales, what clauses matter most, and the commercial questions worth thinking about before you put pen to paper. If you are weighing up whether this model fits your business, it pays to understand the trade-offs before committing.
What this document is
A non-exclusive distribution agreement is a commercial contract between a supplier (often the manufacturer or brand owner) and a distributor who buys goods or services for resale. The defining feature is in the name: the supplier does not promise exclusivity.
They can continue selling into the territory themselves, and they can appoint as many other distributors as they choose. The distributor, in turn, agrees to purchase products on agreed terms, promote them, and sell them on to end customers or sub-resellers.
This structure suits suppliers who want broad market coverage, who are testing a new region, or who prefer not to depend on a single partner. It works across goods and services, domestic and cross-border trade, and between companies of any size.
The agreement typically covers pricing, ordering, delivery, payment, intellectual property, branding, minimum performance, restrictions on competing products, termination, and the usual commercial protections such as confidentiality and limitation of liability. Because there is no exclusivity, the distributor usually accepts that margins and protections look different from an exclusive deal.
How to use this document
Decide whether non-exclusive is the right model. Before drafting anything, work out whether you genuinely want multiple distributors in the same territory, or whether you are better off with an exclusive or sole arrangement. Non-exclusive gives flexibility but can dilute a distributor's incentive to invest heavily in marketing if competitors can undercut them.
Define the territory, products, and term clearly. Ambiguity here causes most disputes. Specify exactly which products or services fall under the agreement, the geographic scope, whether online sales are included, and how long the arrangement lasts. Think about renewal mechanics and what happens if product lines change over time.
Agree commercial terms and performance expectations. Set out pricing, discount structure, payment terms, delivery responsibilities, and any minimum purchase or sales targets. Decide when title and risk pass, usually on full payment. If you want the distributor to hit volume thresholds, spell out the consequence of missing them.
Address restrictions, IP, and branding. Non-compete clauses preventing the distributor from handling rival products are common and generally enforceable if reasonable in scope and duration. Cover trade mark use, marketing approvals, and what the distributor can and cannot say about the product. UK and EU competition rules can bite on certain restrictions, so keep them proportionate.
Plan for the end of the relationship. Every agreement ends eventually. Set notice periods, grounds for immediate termination, handling of unsold stock, post-termination restrictions, and dispute resolution. A clean exit route protects both sides and reduces the chance of a costly fight later on.
Template · England & Wales
Distribution agreement template
This is a practical agreement for an arrangement whereby a merchant or a manufacturer appoints a distributor who buys the goods and re-sells on his own account at home or abroad.
Templates are provided by Net Lawman. We may receive a commission at no extra cost to you.
Common questions
Q How is a non-exclusive distribution agreement different from an exclusive one?
With an exclusive agreement, the supplier promises not to appoint any other distributor in the territory and often agrees not to sell directly either. A non-exclusive agreement removes that promise entirely. The supplier keeps the freedom to sell themselves and to bring in as many other distributors as they like, which usually means broader market coverage but less protected margins for each individual distributor.
Q Does the distributor own the goods once delivered?
Ownership usually transfers only when the supplier has received payment in full, under what is commonly called a retention of title clause. Until then, the distributor holds the goods but does not own them. This protects the supplier if the distributor becomes insolvent before paying, because unpaid stock can potentially be recovered rather than absorbed into the distributor's general assets.
Q Can a non-exclusive agreement stop the distributor selling competing products?
Yes, non-compete restrictions are common and can be enforceable, but they need to be reasonable. UK competition law (and retained EU vertical agreement rules) places limits on how long and how broadly a supplier can restrict a distributor. Restrictions beyond a certain duration or that go further than needed to protect legitimate interests can be void or unenforceable.
Q Is this agreement suitable for international distribution?
It can be, but cross-border deals raise additional questions. You need to think about which country's law governs the contract, which courts have jurisdiction, how VAT and customs duties are handled post-Brexit, export controls, and local consumer or competition rules in the distributor's country. International deals often need specialist input to avoid surprises.
Q What happens if the distributor fails to hit minimum sales targets?
That depends on what the contract says. Common consequences include conversion to a different status, loss of any pricing benefits, or a right for the supplier to terminate on notice. Some agreements treat missed targets as a material breach; others treat them as a trigger for review. Drafting this carefully avoids disputes about what counts as underperformance.
Q Do I need a written agreement, or will a handshake do?
A distribution relationship can in theory exist without a written contract, but it is rarely a good idea. Without written terms you have no clear record of pricing, territory, termination rights, IP use, or liability limits. When things go wrong (and eventually they do), a written agreement is what tells you and a court who agreed to what. Put it in writing.
Q How much notice is needed to end the agreement?
There is no fixed statutory notice period for ordinary distribution agreements in England and Wales. The notice period is whatever the parties agreed in writing. If the contract is silent, a court may imply a reasonable period based on the length and nature of the relationship. Longer-running relationships generally attract longer implied notice, so clear drafting is safer than leaving it open.
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Brad is on the roll of solicitors of England & Wales but does not hold a practising certificate and does not provide legal advice. LegalDocuments.co.uk is not a law firm and does not provide regulated legal advice.
This article is for general information only. It is a tool to help you find your way — not legal advice, and not a substitute for speaking to a qualified adviser about your situation.
