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Short answer: A distributor agreement is a contract in which a supplier authorizes another business to resell its goods, and it sets the terms of that appointment: exclusive, sole or non-exclusive; territory and channel; each side’s effort duties; who handles regulatory tasks for devices; and how the relationship ends. This guide explains what the document has to settle. It is general information, not legal advice or a template.
What a distributor agreement is
A distributor agreement (also written “agreement with distributor” or “distribution agreement”) governs a supplier that sells to a reseller, which then sells on to customers. It differs from a one-off purchase order because it covers an ongoing relationship. For where distributors sit in the medical-supply chain, see medical supply wholesaler vs distributor vs manufacturer.
Searchers often look for a “distributor agreement template”, “sample distributor agreement” or “distributor agreement examples”. This page deliberately gives a checklist of what a finished agreement must settle rather than a fill-in template, because the right wording depends on the product, the jurisdiction and the parties, and a lawyer should review the final text.
Exclusive, sole and non-exclusive distribution: what is the difference?
These three labels are commonly described as follows, but they are not standardized: always read the defined terms in the contract itself.
- Exclusive is commonly described as one distributor for a territory or channel, with the supplier also not selling there directly or through others.
- Sole is commonly described as one distributor in the territory, while the supplier keeps the right to sell direct.
- Non-exclusive is commonly described as the supplier remaining free to appoint other distributors and to sell direct.
Terminology varies by country, and some agreements say “sole and exclusive”, so the definition clause controls, not the label. For a related procurement distinction, see sole source vs single source.
The default duties that exclusivity can create
Under the Uniform Commercial Code text for sales of goods, section 2-306(2), a lawful agreement for exclusive dealing in a kind of goods imposes, unless the parties agree otherwise, an obligation on the seller to use best efforts to supply the goods and on the buyer to use best efforts to promote their sale (Cornell Legal Information Institute, checked 2026-11-01). Two points matter: this is a default that parties can change, and it is the uniform text, so state enactments can differ.
What is an agent agreement, a wholesaler agreement and a vendor agreement?
These names are used loosely, and no single legal definition covers them all. What does have an official definition, for medical devices in the United States, is the role of the distributor (see the next section). A few working distinctions:
- Agent agreement: commonly describes someone who represents the supplier in finding customers, rather than buying and reselling the goods themselves. Whether a given party is an agent or a reseller depends on what the contract says and how the deal works.
- Wholesaler agreement: a distribution deal with a reseller that supplies other businesses. For devices, FDA’s registration rule defines a “wholesale distributor” as any person other than the manufacturer or the initial importer who distributes a device (21 CFR 807.3).
- Vendor agreement: the broadest term, covering any supplier relationship. To draft one, start from the clause list below and add the scope of goods, payment and delivery terms your own counsel specifies.
Regulatory roles for medical devices
For devices, FDA’s medical device reporting rule defines a distributor as any person other than the manufacturer or importer who furthers the marketing of a device from the original place of manufacture to the person who makes final delivery or sale to the ultimate user, but who does not repackage or otherwise change the container, wrapper or labeling. A party that does repackage or change the labeling is treated as a manufacturer (21 CFR 803.3, checked 2026-11-01).
That has a practical consequence for the contract: if the distributor will relabel or repackage, the agreement is no longer an ordinary resale deal, so it should say who holds the manufacturer’s responsibilities. See also contract manufacturing for medical devices and private label vs white label vs OEM.
When a distribution deal can become a franchise
The FTC Franchise Rule defines a franchise by three elements, all of which must be present: the buyer obtains the right to operate a business or sell goods identified with the franchisor’s trademark; the franchisor exerts or can exert significant control over, or gives significant assistance with, the method of operation; and the buyer makes a required payment as a condition of starting or obtaining the arrangement (16 CFR 436.1(h), checked 2026-11-01). The rule’s own definition of “required payment” does not include payments for the purchase of reasonable amounts of inventory at bona fide wholesale prices for resale (16 CFR 436.1(s)). A distribution arrangement that combines a trademark, operating control and a required payment can therefore meet the definition regardless of what it is called. Ask counsel to test any deal that has all three.
Checklist: what the agreement should settle
| Clause | Question to settle | Basis |
|---|---|---|
| Appointment type | Exclusive, sole or non-exclusive, and does the supplier keep direct sales? | Commonly described; the contract definitions govern |
| Territory and channel | Where and to whom may the distributor sell? | Commonly negotiated |
| Effort duties | Are the default best-efforts duties kept, changed or removed? | UCC 2-306(2) default for exclusive dealing |
| Device role | Is the distributor only a distributor, or will it repackage or relabel? | 21 CFR 803.3 |
| Franchise check | Trademark, control and required payment all present? | 16 CFR 436.1(h) |
| Pricing and rebates | Price terms, most-favored-nation language, advertised-price policy | Commonly negotiated; see MFN clauses and MAP policy |
| Assignment and termination | Can either side transfer the contract, and how can it end? | Commonly negotiated; see assignment clauses and termination for convenience vs cause |
Common misunderstandings
- “Exclusive” is not a fixed term. Two contracts using the word can allocate direct sales differently.
- Best-efforts duties are a default for exclusive dealing, not a guarantee, and the parties can contract around them.
- Calling someone a distributor does not settle their regulatory status: for devices, changing the labeling or container makes the party a manufacturer under the FDA definition.
- A confidentiality or non-circumvention document is a different instrument; see the NNN agreement entry.
FAQ
What is a distributor agreement?
A contract authorizing a business to resell a supplier’s goods and setting the appointment type, territory, duties, regulatory roles and termination terms.
What is the difference between exclusive, sole and non-exclusive distribution?
Commonly, exclusive means one distributor and no direct sales by the supplier in the territory, sole means one distributor but the supplier may sell direct, and non-exclusive means the supplier may appoint others. The contract’s definitions control.
What is an agent agreement?
It commonly describes a representative who finds customers for the supplier rather than buying and reselling; the contract and the structure of the deal decide the actual status.
What is a wholesaler agreement?
A distribution deal with a reseller supplying other businesses. For devices, FDA’s 21 CFR 807.3 defines a wholesale distributor as a person other than the manufacturer or initial importer who distributes a device.
How do you draft a vendor agreement?
Start by deciding each point in the checklist above, then have a qualified lawyer prepare and review the text; this page does not provide contract language.
Is there a distributor agreement template or sample?
Many exist from law firms and contract-software vendors. This guide explains the decisions a sample must answer; it does not substitute for legal review of your own agreement.
Sources
- Uniform Commercial Code section 2-306, Output, Requirements and Exclusive Dealings: https://www.law.cornell.edu/ucc/2/2-306 (checked 2026-11-01).
- 21 CFR 803.3, medical device reporting definitions: https://www.law.cornell.edu/cfr/text/21/803.3 (checked 2026-11-01).
- 21 CFR 807.3, establishment registration definitions: https://www.ecfr.gov/current/title-21/part-807/section-807.3 (checked 2026-11-01).
- 16 CFR 436.1, FTC Franchise Rule definitions: https://www.law.cornell.edu/cfr/text/16/436.1 (checked 2026-11-01).
General information only, not legal advice. Have a qualified lawyer review any distributor agreement.
