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Also known as a distribution contract, a distributor agreement is a Business Agreement between channel partners that specifies both parties' responsibilities. In most circumstances, the agreement is between a manufacturer or vendor and a distributor, but it can also be between two distributors or between a distributor and another channel organization. The duration (the length of time the contract is in existence), the terms and conditions of supply, and the sales territories covered by the agreement are the essential parts of a distribution agreement. In addition, the manufacturer or vendor must decide whether the distribution agreement will be exclusive or nonexclusive. The designated distributor will be the single distributor with the authority to sell the product in a specific geographic region or several regions under an exclusive agreement. In addition, the manufacturer or vendor must decide whether the contract will be an exclusive agreement or a non-exclusive agreement.
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