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What Is a Reseller Agreement?
A reseller agreement is a legally binding contract between a product or service provider (the vendor) and another business (the reseller) who sells that product or service to end customers. It clarifies rights, responsibilities, and revenue-sharing models so that everyone knows where they stand.
Why You Need One
- Reduces risk by setting out clear legal protections
- Protects IP and defines ownership of trademarks, branding, and software
- Builds trust with partners by being transparent about margins, pricing, and obligations
- Streamlines sales so partners can go to market quickly without back-and-forth negotiations
What Legal Wants in a Reseller Agreement
Your legal team is focused on minimizing liability. They’ll want the agreement to cover:
- Intellectual property protection
- Clear liability limitations
- Termination rights if things go wrong
- Confidentiality clauses
Key Clauses to Include in a Reseller Agreement Template
- Appointment of Reseller
- Defining scope, territory, and exclusivity
- Pricing & Payment Terms Setting wholesale pricing, discounts, and payment timelines
- Intellectual Property Rights Protecting the vendor’s IP while granting necessary usage rights
- Support & Training Outlining the level of help the vendor provides to the reseller
- Marketing Guidelines Ensuring consistent branding and compliance
- Warranties & Liability Limits Protecting both parties from undue risk
- Term & Termination Setting a clear duration and exit options
Final thoughts
A reseller agreement isn’t just a legal checkbox—it’s the foundation of your partner program. By balancing legal protections with partner-friendly terms, you’ll create a template that not only satisfies your legal team but also strengthens trust and collaboration with your resellers.
Would you like me to draft a sample template contract (with placeholder legal language) that could be used as a starting point, or keep this article more high-level and blog-friendly?
Download a Reseller Agreement Template
Is a reseller agreement the same as a distribution agreement?
No. A reseller agreement usually involves a company selling a product directly to end customers under their own brand or pricing terms. A distribution agreement typically covers bulk purchasing and redistribution to other resellers or retailers.
Do I need a lawyer to create a reseller agreement?
Yes, ideally. While templates are a great starting point, a lawyer can customize the agreement to fit your business model, industry regulations, and jurisdiction.
Can I make a reseller agreement exclusive?
Yes. Exclusivity clauses are common but must be carefully drafted so they’re fair and enforceable. Vendors should weigh the benefits of exclusivity against potentially limiting their market reach.
Who owns the customer relationship in a reseller agreement?
That depends on the contract. Some agreements give the reseller full ownership of customer relationships, while others require sharing customer data or maintaining co-branding with the vendor.
How long should a reseller agreement last?
Most agreements last one to three years with options to renew. A flexible renewal process makes it easier to continue working together if the partnership is successful.
What happens if the reseller doesn’t meet sales targets?
Agreements can include performance thresholds and allow termination if the reseller consistently underperforms. Clear targets prevent disputes and encourage accountability.
