Clear agreements enable predictable revenue streams, protect intellectual property, and allocate commercial risk between parties. They help preserve brand reputation through quality control provisions, support market expansion strategies by defining territories and channels, and provide exit mechanisms and termination rights so companies can adapt quickly when commercial circumstances change.
Comprehensive agreements assign responsibilities for compliance, quality control, and reporting, reducing ambiguity that leads to disputes. Clear obligations and remedies for breach provide predictable outcomes and encourage performance, supporting revenue stability and protecting trademarks, patents, and other business-critical assets from misuse or dilution.
Our practice focuses on business and corporate matters including corporate formation, shareholder agreements, mergers and acquisitions, and commercial contracts. We help structure licensing and distribution arrangements that align with corporate governance, tax planning, and succession considerations to support long-term operational and financial objectives.
Ongoing monitoring ensures partner compliance with quality standards, reporting obligations, and sales targets. When market conditions or business strategies change, we negotiate amendments to adapt terms, preserving commercial relationships while updating protections and responsibilities.
A licensing agreement grants permission to use intellectual property, such as trademarks, patents, or software, under defined conditions without transferring ownership. Licenses set the scope of permitted use, duration, financial terms, and quality controls to protect the owner’s brand and market position while enabling commercial exploitation by another party. Licenses are used when a rights holder wants to monetize intellectual property, expand market presence through third parties, or enable product integrations while retaining ultimate control over the underlying IP and branding standards.
A distribution agreement governs how products or services are sold and delivered through appointed distributors or resellers, focusing on supply, pricing, logistics, and sales obligations. Distribution arrangements primarily address the physical movement and commercialization of goods and the responsibilities of parties in the distribution chain. By contrast, a licensing agreement authorizes use of intellectual property. The two models can overlap when a distributor is also granted licensing rights, in which case the contract should clearly delineate each party’s rights, payments, and performance expectations.
A royalty clause should define the royalty base, calculation method, payment intervals, and currency to avoid ambiguity. It should describe accounting procedures, accepted deductions, invoicing requirements, and timing for payments to ensure consistent revenue recognition and enforcement of financial terms. Including audit rights, late-payment interest, and remedies for underreporting strengthens the royalty structure. These protections allow licensors to verify accuracy and, if necessary, seek adjustments or recoveries when discrepancies are discovered through agreed audit processes.
Agreement durations vary widely based on business goals; terms can be short for pilot programs or multi-year for long-term partnerships. Contracts commonly include renewal provisions tied to performance metrics or automatic renewal clauses subject to notice periods to ensure continuity when relationships meet expectations. Renewal mechanics should be explicit about notice deadlines, renegotiation windows, and any conditions that alter terms upon renewal. Clear renewal language prevents inadvertent extensions or gaps and enables planned transitions or renegotiations at contract expiration.
Exclusivity grants one party the sole right to distribute or use IP in a defined territory or channel, which can enhance market commitment but may limit flexibility. Granting exclusivity often requires stronger performance commitments, minimum sales targets, or higher compensation to justify limiting other distribution options. Deciding whether to grant exclusivity depends on strategic priorities and trust in the partner’s ability to meet targets. Contracts should include clear performance milestones and termination triggers to protect licensors if exclusivity does not produce the expected commercial results.
Protecting IP with distributors involves clear license scope, strict quality control provisions, confidentiality obligations, and limitations on sublicensing. These terms preserve the brand and ensure products or services meet standards, reducing the risk of misuse or reputational harm while the product is in the market. Additional protections may include monitoring and audit rights, requirements for registration where needed, and post-termination obligations to return or destroy unauthorized materials. Well-drafted enforcement and indemnity clauses also help address third-party infringements and breaches.
Common termination clauses include termination for cause due to material breach, termination for insolvency, and termination for convenience with defined notice periods. Agreements should specify cure periods for breaches, consequences for termination, and obligations for unsold inventory, outstanding payments, and transition assistance to reduce business disruption. Including post-termination rights such as limited sell-off periods, return or buy-back provisions, and continued confidentiality obligations helps manage the practical effects of ending a relationship and protects ongoing customer and brand considerations.
Local counsel in Hurt can provide material benefits when agreements implicate state-specific regulations, licensing requirements, or local enforcement considerations. Counsel familiar with regional market practices and statutory frameworks helps align contracts with compliance obligations and can coordinate with out-of-state counsel for multijurisdictional issues. Even for transactions spanning multiple states, having a local point of contact supports negotiations, filings, and enforcement actions within the local legal environment while facilitating collaboration with counsel in other jurisdictions to ensure comprehensive legal coverage.
Dispute resolution clauses typically specify negotiation, mediation, or arbitration before resorting to litigation, and may include venue and governing law selections. Choosing appropriate dispute processes helps contain costs and can preserve commercial relationships by encouraging earlier, less adversarial resolution mechanisms. Governing law and forum selections are critical for predictability; parties should understand the advantages and limitations of arbitration versus court litigation, including enforceability of awards, discovery scope, and appellate rights, and structure clauses accordingly.
Costs for preparing or negotiating agreements depend on transaction complexity, number of counterparties, and the need for specialized diligence such as IP clearance or regulatory review. Simple reviews or template adaptations typically cost less, while bespoke drafting for high-value, multijurisdictional deals involves greater time and expense to manage risk and tailor protections. Many firms offer phased or fixed-fee arrangements for specific tasks such as term sheet drafting or review, and transparent budget estimates can help clients choose between limited engagements and comprehensive representation based on cost, risk, and strategic priorities.
