A carefully constructed agreement preserves brand value, limits exposure to unauthorized use, and clarifies revenue sharing and quality control. Effective drafting anticipates common transactional risks, sets measurable performance metrics, and integrates termination and transition provisions to preserve business continuity in the event of relationship breakdowns or market shifts.
Clear indemnity, limitation of liability, and insurance provisions allocate risks so both parties understand potential exposures. Robust enforcement language and remedies increase the likelihood that breaches will be remedied without prolonged disputes, preserving commercial relationships and brand standing.
Our firm prioritizes clear, business focused contract drafting that aligns legal protections with operational realities. We work closely with clients to understand product lines, market strategies, and risk tolerances so agreements support growth while minimizing potential disputes and misunderstandings.
We advise on dispute resolution clauses and transition assistance to ensure that if termination occurs, customers and supply chains are protected, and intellectual property is secured to avoid market disruption and reputational loss.
A license grants permission to use intellectual property such as patents, trademarks, or software under defined conditions, while a distribution agreement appoints a party to market, sell, or deliver products within specified channels. The license focuses on rights to IP use, whereas the distribution agreement addresses commercial logistics, obligations, and resale conditions. Clarifying which arrangement fits your objectives is crucial to avoiding operational or enforcement conflicts. In many cases, a combined or hybrid approach may be appropriate, and careful drafting will define responsibilities, payment structures, and controls to preserve intellectual property value and ensure efficient distribution.
Territory and exclusivity clauses should be drafted to reflect market realities and your strategic goals. Define geographic boundaries, online channels, and whether exclusivity is limited to certain product lines or time periods to avoid overlapping rights or channel conflict. Consider including performance based exclusivity where exclusivity continues only if minimum sales thresholds are met, balancing protection for the distributor with incentives for active market development. Also address carve outs for direct sales, e commerce, or sales to specific customer classes to maintain flexibility for growth and alternative channels.
Performance obligations commonly include minimum purchase volumes, marketing commitments, reporting frequency, and customer service standards. These metrics should be realistic, measurable, and tied to remedies or review processes when unmet to encourage compliance without triggering immediate termination. It is also important to set reasonable reporting and audit rights so licensors can verify performance while respecting distributor confidentiality and operational autonomy. Well drafted performance standards promote accountability and provide early warning when a relationship needs remediation or renegotiation.
Royalties and pricing provisions should specify calculation methods, payment schedules, and audit rights, including whether royalties are based on net sales, gross receipts, or units sold. Address currency, taxes, and responsibilities for collection costs to avoid disputes. Include clear invoicing and late payment remedies, and consider escalation clauses tied to volume or market changes. Transparent royalty reporting and retention of audit rights protect licensors’ financial interests while allowing distributors to forecast margins and pricing strategies within agreed parameters.
Protect your trademark by including quality control provisions, approval rights for promotional materials, and termination rights for misuse. Require distributors to follow brand guidelines and permit regular inspections or sample approvals to ensure consistency and prevent reputation damage. Also maintain control over trademark registration and enforcement decisions to avoid fragmentation of rights. Proactive monitoring and swift corrective measures in the contract reduce the risk of dilution or unauthorized use that could weaken trademark protections over time.
Assignment and sublicensing clauses should be expressly addressed to prevent unapproved transfers of rights. You may allow assignments only with consent or permit assignment to affiliates under defined conditions. Sublicensing can be restricted or allowed subject to the licensor’s approval and the obligation that sublicensees adhere to the same quality and reporting standards. Clear rules on transfers preserve control over who benefits from the rights and protect brand and IP value when business ownership or distribution networks change.
Common remedies include specific performance for unique IP rights, injunctive relief for trademark misuse, damages for breaches, and termination rights for material violations. Include notice and cure periods to encourage remediation before termination and define calculation methods for damages where appropriate. Mediation or arbitration clauses can offer faster resolution and confidentiality while preserving remedies for urgent injunctive relief in court when necessary to stop irreparable harm to brand or market position.
Agreement length varies with commercial goals but often balances sufficient term to justify distributor investment with flexibility to adapt to market changes. Include renewal mechanisms, whether automatic or subject to performance review, and provide notice periods for non renewal. Consider staggered renewal and review dates tied to performance metrics to ensure continued alignment, and include transition provisions to protect customers and inventory if the relationship ends, minimizing disruption and preserving goodwill in the marketplace.
Local counsel often adds value when expanding into new states or countries by advising on applicable regulatory requirements, tax implications, and enforceability of contractual provisions under local law. Local counsel can also assist with registration, distribution permits, and dispute resolution strategies tailored to the jurisdiction, reducing the risk of compliance failures and helping to localize contract language for effective commercial operation. Coordination between home and local counsel ensures coherent strategies and consistent protections across territories.
A robust termination and transition plan should outline notice and cure periods, inventory handling, customer notification processes, and the return or continued licensing of IP where appropriate. Include obligations for ongoing support during transition, data transfer protocols, and protections for customer lists and confidential information. Clear wind down terms reduce supply chain shocks and preserve customer relationships, allowing the outgoing party to exit with orderly transfer of responsibilities while protecting the brand and contractual rights of both sides.
