Distribution Agreement (UK)
This Distribution Agreement (the “Agreement”) is entered into on [Effective Date] (the “Effective Date”) by and between:
[Supplier Name], [Supplier Type], with its registered or principal address at [Supplier Address], [Supplier City], [Supplier County], [Supplier Postcode] (hereinafter referred to as the “Supplier”); and
[Distributor Name], [Distributor Type], with its registered or principal address at [Distributor Address], [Distributor City], [Distributor County], [Distributor Postcode] (hereinafter referred to as the “Distributor”).
The Supplier and the Distributor are referred to collectively as the “Parties” and individually as a “Party”.
BACKGROUND
The Supplier manufactures and/or supplies the Products (as defined below) and wishes to appoint the Distributor to purchase and resell the Products within the Territory on the terms and conditions set out in this Agreement.
The Distributor wishes to be appointed as [Distribution Exclusivity] distributor of the Products within the Territory and to purchase the Products from the Supplier for resale in its own name and on its own account.
NOW, THEREFORE, in consideration of the mutual obligations herein and for good and valuable consideration, the Parties agree as follows:
1. APPOINTMENT
1.1 The Supplier hereby appoints the Distributor as its [Distribution Exclusivity] distributor for the sale of the Products (as described in clause 2) within the following territory: [Distribution Territory] (the “Territory”), and the Distributor accepts such appointment, on the terms and conditions of this Agreement.
1.2 The Distributor acknowledges that it is an independent contractor and not an agent, employee, or partner of the Supplier. The Distributor shall have no authority to enter into any contract or incur any liability on behalf of the Supplier.
1.3 The Distributor shall purchase the Products from the Supplier in its own name and on its own account and shall resell the Products to its customers in its own name and at prices determined by the Distributor at its sole discretion.
2. PRODUCTS
2.1 The products to be distributed under this Agreement are: [Products Description] (the “Products”).
2.2 The Supplier reserves the right to modify, discontinue, or add products to its range, subject to giving the Distributor reasonable written notice. The Supplier shall use reasonable endeavours to supply substitute products where products are discontinued.
2.3 The Distributor shall not distribute, sell, or promote any modified, adapted, or re-labelled Products without the Supplier’s prior written consent.
3. TERM
3.1 This Agreement shall commence on the Effective Date and shall continue for [Agreement Term] (the “Initial Term”), and shall thereafter continue until terminated by either Party giving not less than [Termination Notice] to the other Party.
4. PRICING AND PAYMENT
4.1 The Distributor shall purchase the Products from the Supplier on the following terms: [Pricing and Payment Terms].
4.2 All prices are exclusive of VAT, which shall be charged at the applicable rate.
4.3 If any payment is not made on the due date, interest shall accrue on the overdue amount at the rate of 8% per annum above the Bank of England base rate pursuant to the Late Payment of Commercial Debts (Interest) Act 1998, from the due date until payment is received.
4.4 The Supplier may change the prices of the Products on not less than 30 days’ written notice to the Distributor. Orders placed before the effective date of any price change shall be fulfilled at the old price.
5. DISTRIBUTOR’S OBLIGATIONS
5.1 The Distributor shall:
- use its best endeavours to promote, market, and sell the Products throughout the Territory;
- maintain adequate stock of the Products to meet the demands of customers in the Territory;
- not sell or supply the Products outside the Territory without the Supplier’s prior written consent;
- comply with all applicable laws and regulations in the Territory, including consumer protection legislation under the Consumer Rights Act 2015 and product safety regulations;
- provide the Supplier with quarterly sales reports and forecasts;
- promptly notify the Supplier of any product complaints, defects, or regulatory issues; and
- ensure that all staff involved in selling the Products have adequate training in their features and use.
5.2 The Distributor shall not make any representations or give any warranties about the Products beyond those authorised by the Supplier in writing.
6. SUPPLIER’S OBLIGATIONS
6.1 The Supplier shall supply the Products to the Distributor in accordance with orders placed by the Distributor and shall use reasonable endeavours to fulfil orders within the lead times agreed between the Parties.
6.2 The Supplier warrants that the Products supplied under this Agreement shall: (a) comply with all applicable product safety regulations; (b) be of satisfactory quality within the meaning of the Consumer Rights Act 2015 and the Sale of Goods Act 1979; and (c) be free from material defects at the time of delivery.
6.3 The Supplier shall provide the Distributor with reasonable technical, marketing, and promotional support, including product literature and training materials.
7. INTELLECTUAL PROPERTY
7.1 The Supplier grants the Distributor a non-exclusive licence during the Term to use the Supplier’s trade marks, trade names, and branding materials solely for the purpose of promoting and selling the Products within the Territory.
7.2 The Distributor shall use the Supplier’s trade marks only in the manner approved by the Supplier and shall not alter, adapt, or derogate from them.
7.3 All intellectual property rights in the Products and the Supplier’s trade marks remain the property of the Supplier. On termination, the Distributor shall immediately cease use of all Supplier trade marks and materials.
8. NON-COMPETE
8.1 [Non-Compete Terms]. The Parties acknowledge that this restriction is reasonable and necessary to protect the Supplier’s legitimate business interests and complies with the Competition Act 1998.
9. CONFIDENTIALITY
9.1 Each Party undertakes to keep confidential all information of a confidential or proprietary nature received from the other Party in connection with this Agreement and to use such information only for the purposes of this Agreement.
9.2 The obligations in this clause shall survive termination of this Agreement for a period of three years.
10. TERMINATION
10.1 Either Party may terminate this Agreement on not less than [Termination Notice] to the other Party after expiry of the Initial Term.
10.2 Either Party may terminate this Agreement immediately by written notice if the other Party: (a) commits a material breach and (where the breach is capable of remedy) fails to remedy it within 30 days of written notice; (b) becomes insolvent, enters administration, receivership, or liquidation; or (c) ceases to carry on its business.
10.3 On termination or expiry, the Distributor shall: (a) cease representing itself as a distributor of the Supplier; (b) cease using the Supplier’s trade marks; (c) return any remaining Product samples or promotional materials; and (d) pay all outstanding invoices. Termination shall not affect any accrued rights or liabilities.
11. COMPETITION LAW
11.1 The Parties acknowledge that they are subject to the Competition Act 1998 and any other applicable competition laws of England and Wales.
11.2 Nothing in this Agreement shall be construed as requiring or permitting either Party to engage in any conduct that constitutes a breach of Chapter I or Chapter II of the Competition Act 1998, including any resale price maintenance, market-sharing, or abuse of a dominant position.
11.3 For the avoidance of doubt, the Supplier shall not set minimum resale prices for the Products. The Distributor shall be free to determine its own resale prices.
12. GENERAL PROVISIONS
12.1 Entire Agreement. This Agreement constitutes the entire agreement between the Parties relating to the distribution of the Products and supersedes all prior agreements and understandings.
12.2 Amendment. No amendment shall be valid unless made in writing and signed by authorised representatives of both Parties.
12.3 Severability. If any provision is found invalid or unenforceable, the remaining provisions shall continue in full force.
12.4 Third Party Rights. A person not a party to this Agreement has no rights under the Contracts (Rights of Third Parties) Act 1999.
12.5 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of England and Wales. Each Party irrevocably submits to the exclusive jurisdiction of the courts of England and Wales.
IN WITNESS WHEREOF, the Parties have executed this Distribution Agreement as of the Effective Date first written above.
THE SUPPLIER
Full name: [Supplier Name]
Address: [Supplier Address], [Supplier City], [Supplier County], [Supplier Postcode]
THE DISTRIBUTOR
Full name: [Distributor Name]
Address: [Distributor Address], [Distributor City], [Distributor County], [Distributor Postcode]
Supplier
________________
Signature
Date: ________________
Distributor
________________
Signature
Date: ________________
What Is a Distribution Agreement (UK)?
A Distribution Agreement in the United Kingdom sets the services to be provided, the fees, the timetable, and each side's responsibilities for the engagement, with its requirements set by the Competition Act 1998.
Distribution agreements are used extensively across manufacturing, wholesale, consumer goods, technology, pharmaceutical, and industrial sectors in the United Kingdom. They allow suppliers to expand into new markets or territories without the overhead cost of establishing their own sales force or infrastructure, while distributors gain the commercial opportunity to build a profitable business around established or emerging product brands.
In England and Wales, distribution agreements are governed primarily by general contract law. However, several statutory regimes are important. The Competition Act 1998, and the Vertical Agreements Block Exemption Order 2022 (VABEO) which was retained in UK law after Brexit, regulate vertical restraints in distribution agreements including exclusive territories, non-compete obligations, and pricing practices. The Consumer Rights Act 2015 is relevant where the distributor resells to consumers. The Late Payment of Commercial Debts (Interest) Act 1998 applies to payments between businesses. The Commercial Agents (Council Directive) Regulations 1993, while not directly applicable to distributors, are highly relevant in practice because the supplier must confirm that the distributor's role is structured as a true buy-resell arrangement and not as a commercial agency.
The United Kingdom Distribution Agreement (UK) Distribution Agreement template is designed for use between a UK supplier and a UK distributor operating in England and Wales. It covers the appointment, territory, exclusivity, products, minimum purchase targets, pricing, payment terms, distributor and supplier obligations, intellectual property licensing, non-compete restrictions, confidentiality, termination, and competition law compliance.
The legal framework governing the Distribution Agreement (UK) in United Kingdom draws on several key statutes and regulatory bodies. Under the Companies Act 2006, Companies House maintains the register of UK companies. Section 386 of the Companies Act 2006 sets accounting record obligations. The Competition and Markets Authority (CMA) enforces the Consumer Rights Act 2015. The Financial Conduct Authority (FCA) regulates financial services under the Financial Services and Markets Act 2000. The High Court of Justice has jurisdiction under the Senior Courts Act 1981. Parties executing a Distribution Agreement (UK) in United Kingdom should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Companies Act 2006 sets the foundational requirements.
When Do You Need a Distribution Agreement (UK)?
A Distribution Agreement is required whenever a business (the supplier) wishes to appoint a third party (the distributor) to purchase its products and resell them within a defined territory in England and Wales or internationally. The agreement formalises the commercial relationship and provides the legal framework governing the distributor's appointment, obligations, pricing, and the consequences of termination.
Common situations in which a UK Distribution Agreement is required include: a UK manufacturer appointing a regional distributor to sell its products to retailers and wholesale customers in a specific area of England and Wales; a technology company appointing a value-added reseller (VAR) to distribute and support its hardware or software products within a territory; an overseas supplier appointing a UK importer and distributor to introduce its products to the British market; and a food and beverage producer appointing specialist distributors to supply its products to hospitality, catering, or convenience retail sectors.
A Distribution Agreement is particularly important where the appointment is exclusive, as exclusivity gives the distributor significant commercial advantages (and therefore significant commercial use) that need to be carefully balanced against performance obligations such as minimum purchase targets. Without a formal agreement, disputes commonly arise about the extent of the distributor's exclusivity, the ability of the supplier to sell directly into the territory, the minimum volumes required, and the compensation (if any) payable on termination.
The agreement should be executed before the distributor begins selling the products, placing orders, or making any significant investment in promoting the supplier's brand. Where significant investments are involved — such as warehouse facilities, marketing expenditure, or dedicated sales teams — the distributor will require a sufficiently long initial term and adequate notice period to justify those investments. These are commercial matters that should be negotiated carefully before the agreement is signed.
What to Include in Your Distribution Agreement (UK)
A well-drafted Distribution Agreement for use in England and Wales should contain a number of essential provisions that protect both the supplier's brand and commercial interests and the distributor's investment in building a market for the products.
The appointment clause confirms the distributor's status as an independent contractor purchasing and reselling products in its own name and on its own account. It is important to state clearly that the distributor is not an agent of the supplier and has no authority to bind the supplier contractually. This is critical to avoid inadvertent application of the Commercial Agents (Council Directive) Regulations 1993.
The products clause describes the products covered by the agreement with sufficient precision. The supplier should retain the right to modify or discontinue products on reasonable notice and to introduce new products into the distributor's range.
The territory clause defines the geographic area within which the distributor is authorised to sell the products. In an exclusive arrangement, the supplier must not appoint other distributors within the territory during the term of the agreement.
The exclusivity clause specifies whether the appointment is exclusive or non-exclusive. If exclusive, it should comply with the Vertical Agreements Block Exemption Order 2022 and must not include any hardcore restrictions such as absolute territorial protection or resale price maintenance.
The minimum purchase targets clause is essential in exclusive distribution agreements to confirm the distributor actively promotes and sells the products. It should specify the measurement period, the consequences of failure, and the supplier's remedies.
The pricing and payment terms clause sets the prices at which the supplier will sell to the distributor, the payment period, and the consequences of late payment under the Late Payment of Commercial Debts (Interest) Act 1998.
The distributor's obligations clause sets out the distributor's duties including active promotion, adequate stock holding, compliance with applicable law (including the Consumer Rights Act 2015), and reporting requirements.
The supplier's obligations clause includes the warranty on product quality, supply obligations, and technical support.
The intellectual property clause grants the distributor a limited, non-exclusive licence to use the supplier's trade marks for the purpose of promoting the products within the territory.
The competition law clause confirms compliance with the Competition Act 1998 and expressly prohibits resale price maintenance.
The termination clause specifies notice periods, grounds for immediate termination, and the consequences of termination including stock return and payment of outstanding invoices.
The governing law and jurisdiction clause confirms England and Wales.
Additional compliance elements for a Distribution Agreement (UK) used in United Kingdom include: Under the Companies Act 2006, Companies House maintains the register of UK companies. Section 386 of the Companies Act 2006 sets accounting record obligations. The Competition and Markets Authority (CMA) enforces the Consumer Rights Act 2015. The Financial Conduct Authority (FCA) regulates financial services under the Financial Services and Markets Act 2000. The High Court of Justice has jurisdiction under the Senior Courts Act 1981. Forms-legal.com provides this template as a starting point for United Kingdom-compliant documentation.
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Reference this free template in an article, syllabus, or research note:
Forms Legal. (2026). Distribution Agreement (UK) (United Kingdom) [Legal document template]. Forms Legal. https://forms-legal.com/uk/business/contracts/distribution-agreement-uk
"Distribution Agreement (UK) (United Kingdom)." Forms Legal, 2026, https://forms-legal.com/uk/business/contracts/distribution-agreement-uk.
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title = {Distribution Agreement (UK) (United Kingdom)},
year = {2026},
howpublished = {\url{https://forms-legal.com/uk/business/contracts/distribution-agreement-uk}},
note = {Free legal document template. Based on Companies Act 2006}
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Frequently Asked Questions
The distinction between a distributor and a commercial agent is one of the most commercially significant in English distribution law, because it determines whether the mandatory protections of the Commercial Agents (Council Directive) Regulations 1993 (SI 1993/3053) apply. A distributor purchases goods from the supplier in its own name and on its own account, and resells them to customers at a price it sets itself. The distributor takes title to the goods, bears the commercial risk of resale, and is not acting as an intermediary on behalf of the supplier. The Commercial Agents Regulations do not apply to distributors. A commercial agent, by contrast, is a self-employed intermediary with continuing authority to negotiate or conclude the sale or purchase of goods on behalf of a principal. The agent does not take title to the goods. The Commercial Agents Regulations apply to commercial agents and provide mandatory protections including the right to commission, minimum notice periods, and compensation or indemnity on termination, none of which can be contracted out of to the agent's detriment. Misclassification of an agent as a distributor can expose the supplier to significant liability on termination. The distinction depends on the substance of the arrangement rather than the label used in the contract.
Distribution agreements are vertical agreements (between parties at different levels of the supply chain) and are subject to Chapter I of the Competition Act 1998, which prohibits agreements that have the object or effect of preventing, restricting, or distorting competition in the United Kingdom. Following Brexit, the UK retained the EU Vertical Block Exemption Regulation in UK law through the Vertical Agreements Block Exemption Order 2022 (VABEO), which came into force on 1 June 2022 and applies until 31 May 2028. Under the VABEO, a vertical agreement benefits from block exemption (and is therefore not prohibited by Chapter I) provided that: (a) the supplier's market share does not exceed 30% on the relevant market in which it sells the contract goods; (b) the buyer's (distributor's) market share does not exceed 30% on the market in which it purchases the contract goods; and (c) the agreement does not contain any ‘hardcore’ restrictions. Hardcore restrictions include minimum resale price maintenance (setting a minimum price at which the distributor must resell), absolute territorial protection (preventing the distributor from responding to unsolicited orders from outside its territory), restrictions on online sales, and reciprocal non-compete obligations exceeding five years. Agreements with market shares above 30% require individual assessment. Legal advice is recommended for distribution networks with significant market shares or complex vertical restraints.
In England and Wales, resale price maintenance (RPM) — where a supplier requires a distributor to sell products at or above a minimum price — is a hardcore restriction under the Vertical Agreements Block Exemption Order 2022 and an infringement of Chapter I of the Competition Act 1998. RPM prevents the distributor from competing on price and restricts intra-brand competition. It cannot benefit from block exemption regardless of the parties' market shares and is very difficult to justify on efficiency grounds. The Competition and Markets Authority (CMA) has pursued several high-profile RPM enforcement cases against suppliers in the UK, resulting in significant fines. However, maximum resale price maintenance (setting a ceiling on resale prices) and recommended resale price maintenance (suggesting a non-binding price) are generally permissible, provided they are genuinely not binding in practice. A supplier must not use indirect means to achieve RPM, such as threatening to terminate the distribution agreement if the distributor sells below a certain price, withholding discounts, or monitoring and enforcing resale prices. Distribution agreements should not include any provision that could be construed as setting minimum resale prices or creating any mechanism for RPM.
The Consumer Rights Act 2015 (CRA 2015) is the primary consumer protection statute in England and Wales. While the CRA 2015 principally regulates the relationship between traders and consumers (rather than purely B2B distribution relationships), it is highly relevant in distribution arrangements where the distributor resells the supplier's products to consumers. The CRA 2015 implies terms into consumer contracts that goods must be of satisfactory quality (section 9), fit for a particular purpose (section 10), and as described (section 11). If goods do not conform to these implied terms, the consumer has the right to a short-term right to reject within 30 days, a right to repair or replacement, and a right to a price reduction or final right to reject. In a distribution chain, if a consumer exercises their statutory rights against the distributor (the seller), the distributor may have a contractual recourse against the supplier if the defect is attributable to the supplier's goods. The distribution agreement should address recourse rights clearly, including the process for returning defective goods to the supplier, the timeframe for replacement or credit, and the allocation of liability for consumer claims. Suppliers should also confirm that their products comply with product safety regulations.
Unlike commercial agency agreements (which are subject to mandatory minimum notice periods under regulation 15 of the Commercial Agents Regulations 1993), there is no statutory minimum notice period for terminating a distribution agreement in England and Wales. The notice period is entirely a matter of contract. In the absence of any express notice provision, a court may imply a reasonable notice period based on the length and nature of the relationship, the distributor's investment in the business, and any applicable trade customs. Where a distribution agreement has been performed for many years and the distributor has made substantial investments in promoting the supplier's products, a court may hold that a reasonable notice period is considerably longer than the express contractual notice period, particularly where the supplier terminates the agreement in bad faith or in a way that defeats the distributor's reasonable expectations. To reduce the risk of implied terms and claims for wrongful termination, the distribution agreement should include clear and unambiguous termination provisions specifying: the length of the notice period, whether notice can be given at any time or only at the end of a contract year, the consequences of termination (including handling of outstanding orders and stock), and whether any termination compensation or indemnity is payable.
Minimum purchase targets (also known as minimum purchase obligations or performance targets) are commonly included in exclusive distribution agreements as a mechanism to confirm that the exclusive distributor actively promotes the supplier's products and achieves the commercial volumes that justify the exclusivity. Under English contract law, minimum purchase targets are contractual obligations of the distributor. If the distributor fails to meet the target, the supplier's available remedies depend on how the agreement is drafted. Common options include: (a) the right to terminate the exclusivity (i.e., convert the appointment from exclusive to non-exclusive); (b) the right to terminate the agreement for material breach on written notice; or (c) a price adjustment mechanism reducing the discount available to the distributor. Courts will generally not order specific performance of a minimum purchase obligation (i.e., force the distributor to place orders), but the supplier may be entitled to damages for breach of the obligation. To be effective, minimum purchase targets must be clearly defined in terms of volume or value, the measurement period (e.g., per calendar year), and the consequences of failure. Where the targets are particularly ambitious, competition law considerations may also arise if failure to meet targets is used as a pretext for terminating an otherwise compliant distributor.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
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