What is a Reseller Agreement and How Do You Review it?
A reseller agreement is a legal contract between a supplier and another party who will sell products on their behalf. It specifies some important aspects of their working relationship, such as how to sell the goods, market them, and other duties.
It’s essential to review the agreement for clarity on duties, rights, and liability so both parties know what’s expected of them.
Read the rest of this article to explore key aspects of reseller agreements, what they contain, and how to review them for transparency. We’ll also feature advice on when you should hire a lawyer for a thorough legal review.
What Key Terms are in a Reseller Agreement?
A reseller agreement usually includes important terms such as the following:
- Authority scope. This clarifies how much control the reseller has, and in what territory, as well as if the arrangement is exclusive or not.
- Obligations. The reseller will have certain duties, such as reaching specific sales targets or marketing the goods. The supplier will have other obligations, such as providing support.
- Payment. These outline payment terms such as pricing, discounts, and commission.
- Intellectual property (IP) rights. IP ownership must be stipulated, such as in terms of how copyright and patents are permitted to be used.
- Confidentiality. Sensitive information, such as customer lists, need to be handled and stored carefully.
- Term and termination. The agreement duration will be specified, as well as processes for either party to end the agreement.
- Dispute resolution. To ensure all disagreements are handled quickly, the agreement should have a dispute-resolution method, such as mediation or arbitration.
- Limitation on liability. Parties will agree on how risks are allocated between them.
How Should You Conduct a Reseller Agreement Review?
When reviewing your reseller agreement prior to signing it, you should do more than simply read it. Ensure you understand everything in it and pay special attention to the most important points. These include:
- Scope of services. Check that the products are clearly defined so there’s no confusion. You might have exclusive or non-exclusive rights, which will apply to a certain territory.
- Payment terms. Take time to analyze all aspects of the pricing, such as tiered commission rates, payment schedules, and future price changes.
- Metrics. To ensure performance is of a high standard, the agreement should specify targets that resellers must meet. These should be realistic so that the reseller won’t struggle to achieve them.
- Duties. The reseller agreement should provide clear duties and roles that both parties have in terms of various aspects of their working relationship, such as tech assistance and marketing activities.
- Intellectual property. The agreement must clearly define what’s considered misuse of branding and other intellectual property, such as when marketing goods. This ensures that the reseller knows what’s permitted and prohibited to prevent disputes.
- Post-termination. In the case of the agreement being terminated, there could be things to consider, such as what will happen to inventory that’s not sold and existing customer relationships or commitments. These are important to chat about with the supplier as they will ensure a smoother termination.
- Auto-renewal. Check the agreement for auto-renewal clauses that could potentially lock you into an agreement for longer than is suitable.
Should You Hire a Lawyer for a Reseller Agreement Review?
If you’re wondering if you should seek legal guidance for the review of your reseller agreement, it’s worth considering your specific situation.
For low-risk reseller agreements that are clear and professionally drafted, you might not need to hire a lawyer to help you with a review. However, if you’re dealing with long agreements that involve exclusivity and/or large volumes, you should check that the agreement is aligned with your needs and interests.
Here is how hiring a lawyer can help you.
- A lawyer will prevent you from making mistakes that could cost you, whether legally or financially.
- They’ll unpack legal or technical language in the agreement to reveal any hidden risks or limitations you might have missed during your review.
- They’ll clarify the agreement so you understand all its terms, such as liability and termination.
- They’ll ensure the agreement is aligned with all relevant laws and rules.
- They’ll make revisions that are clear, specific, and easy to understand.
- They’ll negotiate with the other party if anything needs to be amended.
- They’ll protect your rights so that the agreement benefits you and your career goals.
Where Can You Get a Legal Review of a Reseller Agreement?
If you need to hire a lawyer for a review of your reseller agreement, online legal platforms make the process easy. You can find a reputable lawyer on ContractsCounsel, one of the largest online legal marketplaces that connect vetted lawyers with clients seeking contract reviews and other legal guidance.
Instead of having to conduct research into finding the most suitable lawyer, the platform provides all the information you need about the lawyers who are ready to help you.
To request a review of your reseller agreement on ContractsCounsel, here are the steps to follow.
1. Go to the ContractsCounsel marketplace, where you can post your project for free. Be specific by providing information that will help the lawyers know what you need.
2. You’ll receive multiple bids from lawyers directly on the platform who can assist you.
4. Once you receive the lawyer bids, you should review the lawyers' profiles. There’s lots of info on the platform to help you choose the best lawyer, such as their location, client ratings, years of experience, and field of expertise.
5. Connect with a lawyer you think is best suited to your requirements and hire them.
