Distributorship Agreement











This DISTRIBUTORSHIP AGREEMENT is made on this the

_______ Th day of 2004


B, son of Mr Z., residing at _________________________________________________________, proprietor of M/s X CHEMICALS, having its place of business at 242, Tejgaon Industrial Area, Dhaka-1208, Bangladesh hereinafter called the “DISTRIBUTOR”, (which expression shall include his heirs, successor-in-interest, administrators, legal representatives and assigns) of the ONE PART.


Mr. A, son of Mr. M P.S.C (Ret.), residing at, ____________________________________________________, proprietor of M/s Y CHEMICALS, having its place of business at Dhaka EPZ, Building # SFB-4 (Ground Floor), Savar, Ganakbari, Dhaka hereinafter called the “IMPORTER”, (which expression shall include his heirs, successor-in-interest, administrators, legal representatives and assigns) of the OTHER PART.

W H E R E A S:

1.      The IMPORTER is a major importer and processor of products/goods and engaged in importing and processing of goods and products.

2.      The DISTRIBUTOR  is a major supplier company in Bangladesh and is engaged in the distribution and sale of various  products and goods etc;

3.      The IMPORTER desires to sale and distribute products and goods, which are processed and imported by the IMPORTER, through DISTRIBUTOR.

4.      The IMPORTER having the requisite qualification, experience, financial capability and knowing the requirements of The DISTRIBUTOR, has approached the DISTRIBUTOR to appoint it as a distributor and the DISTRIBUTOR has accepted the said offer under the terms and conditions stated hereinafter.


1.        DEFINITION

“Agreement” means the Agreement executed between the IMPORTER M/s Y Chemicals and DISTRIBUTOR M/s. X Chemicals.

“Territory” means the area comprising of the entirety of the People’s Republic of Bangladesh.

“Goods” means all products or goods, which will be supplied by the IMPORTER to the DISTRIBUTOR.

2.         SCOPE:

2.1              The IMPORTER hereby grants to the DISTRIBUTOR the exclusive right to sale and distributes the products/goods during the continuance in force of this Agreement.


3.1       This Agreement shall in force for a period of _______ year from the date hereof and thereafter renewable from _____________ basis subject to the provisions as to termination upon mutual consent of the parties.


4.1              Payment and all relevant documentary transactions shall be done through _____________________________________.

4.2              The price of the products and goods shall be determined and declared by___________________________.  ______________ reserves it right to vary the prices in its absolute discretion upon communication with the ___________..


The ______________ shall sale / distribute at least _______________ goods per month. ______________ reserves its right to modify the monthly minimum sale / distribution quantity required by the _____________ upon __________ days notice to the _____________.


6.1                 The ______________ shall undertake to take up all requisite insurance policies that are contemplated under this Agreement.

6.2                 The ___________ shall be responsible for payment of all taxes for the products/goods.


7.1                 The DISTRIBUTOR hereby undertakes and agrees with the IMPORTER that he shall at all times during the continuance of this Agreement observe and perform the terms and conditions set out in this Agreement and covenants that he shall:

a)             use at all times his best endeavours to promote and extend sale and distribution of the goods throughout the Territory.

b)             not incur any liability on behalf of IMPORTER or accept any order or make any contract binding upon IMPORTER without prior written approval of the IMPORTER.

c)             promptly bring to the notice of  IMPORTER any information received by it which is likely to be of interest, use or benefit to IMPORTER in relation to the marketing of its products/goods in the Territory;

d)             not without the previous written consent of IMPORTER assign, transfer, charge or in any manner make over or purport to assign, transfer, charge or make over this Agreement or their rights hereunder or any part hereof without the consent of IMPORTER;

e)             not alter, obscure, remove, conceal or otherwise interfere with any markings or nameplates or other indication of the source of origin of the products/goods which may be placed by IMPORTER in writing on the products.


8.1              The IMPORTER hereby undertakes and agrees with the DISTRIBUTOR that he shall at all times during the continuance of this Agreement observe and perform the terms and conditions set out in this Agreement and covenants that he shall:

a)      not appoint any other distributor for the sale / distribution of the goods and the DISTRIBUTOR will be the sole party for that purpose.

b)      supply the best quality of goods to the DISTRIBUTOR and ensure that the quality of goods is double-checked before making delivery to the DISTRIBUTOR. The DISTRIBUTOR will not be responsible for any complain received from the customer. In all circumstances, it is the IMPORTER who will be responsible for the quality of the goods and will handle any complains from the customers.

c)      keep efficient and adequate staffs to ensure smooth and timely delivery of the goods to the DISTRIBUTOR to the places as indicated by the DISTRIBUTOR.

d)      ensure that all the goods match with their description. It will be the sole responsibility of the IMPORTER if any discrepancy occur in the description of the goods.

e)      not incur any liability on behalf of DISTRIBUTOR or accept any order or make any contract binding upon DISTRIBUTOR without prior written approval of the IMPORTER

f)        not to make any representations concerning the products/goods, or extend any warranty concerning the use, or effectiveness of the products/goods, except as instructed to the DISTRIBUTOR in writing;

g)      ensure  proper use of his patent, trademarks, emblems, designs, or other similar industrial or commercial monopoly rights. Any improper or wrongful use of IMPORTER’s patent, trademarks, emblems, designs, or other similar industrial or commercial monopoly rights will be notified to the DISTRIBUTOR immediately. The IMPORTER will make every effort to safeguard the property, rights and interests of DISTRIBUTOR and will assist DISTRIBUTOR at its request in taking all steps to defend the rights of DISTRIBUTOR;

h)      keep full, proper and up to date book of account and records showing clearly all inquiries, transactions and proceedings relating to the import and processing of the goods and will allow the authorised officers of DISTRIBUTOR to have access to the said books and records and take such copies as they may require and from time to time upon request.

i)        not without the previous written consent of DISTRIBUTOR assign, transfer, charge or in any manner make over or purport to assign, transfer, charge or make over this Agreement or their rights hereunder or any part hereof without the consent of DISTRIBUTOR;

j)        carry out promotional programs appropriate to the goods and consult with DISTRIBUTOR concerning the nature and extent of such programs. The DISTRIBUTOR will bear the cost of the fieldwork and staff.


The DISTRIBUTOR warrants and represents that:

9.1           The DISTRIBUTOR has the capacity to enter into this Contract and consummate the transactions contemplated by this Agreement.

9.2           The DISTRIBUTOR is conversant with the requirements of IMPORTER and undertakes that it shall perform under this Agreement with due diligence, willingly, conscientiously and to the best of the DISTRIBUTOR’s business skill and ability.

9.3            It possesses the necessary skill, capital, experience, knowledge and expertise to run the distributorship business, particularly :

a)             It has the necessary financial capability and support to perform all of its obligations under this Agreement to the satisfaction of IMPORTER;

b)             It has and maintains an effective and efficient transportation system for distribution of the products/goods.

c)             It owns or controls warehouse(s) with the requisite capacity to store the products/goods Quantity;

d)             It has a team of well trained marketing staff; and

e)             has in existence an effective distribution system in place to perform its responsibilities and duties under this Agreement

9.4       That it is in compliance with all relevant laws, including labour laws, in its performance of this Agreement.


10.1          The IMPORTER shall keep and maintain registrations, if available, of all trademarks with respect to all products/goods, if so necessary, and such other trademarks as they may deem appropriate, with the trademark authorities in the Territory, and shall take such action for the protection of the trademarks as they shall consider advisable.


11.1     Failure on the part of either Party to perform any of its obligations set forth in this Agreement will not give either Party to this Agreement any claim against the other Party or be deemed to be a breach of the Agreement to the extent that such failure arises from force majeure. If through force majeure the fulfillment of either Party of any obligation set forth in this Agreement will be delayed, the period of such delay will not be counted on in computing periods prescribed by this Agreement. Any Party failing to perform its obligations under this Agreement because of force majeure shall give notice in writing to the other Party of such force majeure as soon as possible after the occurrence.

11.2     Force majeure shall include any war, civil commotion, hartal, floods, earth-quake, fire, strike, governmental action, lockout, accident, epidemic or any other event of any nature or kind whatsoever beyond the control of the Parties that directly or indirectly hinders or prevents the Parties from commencing or proceeding with consummation of the transactions contemplated hereby. Any Party hereto who fails because of force majeure to perform its obligations hereunder will upon the cessation of force majeure, take all reasonable steps within its power to resume with the least possible delay compliance with its obligations. If the conditions of force majeure shall continue for a period exceeding ______ months, then the Parties shall meet to decide upon the future performance of the Agreement.


12.1     Both the parties agree that the distributorship agreement shall be exclusive in nature. The IMPORTER does not reserve the right to appoint other distributors for selling and distributing its products/goods within the Territory or to sell directly to any customer within the Territory.


13.1            The IMPORTER undertakes and covenants that it / he shall not engage in any other business / distributorship/ agency which competes or may compete with the business of DISTRIBUTOR.


14.1     The DISTRIBUTOR agrees and undertakes that it will, during and after the term of this Agreement indemnify and hold the IMPORTER harmless from and against any and all claims, demands, causes of action, actions or suits, whether at law or in equity, judgements, decrees, damages or any liability whatsoever asserted or entered against IMPORTER by or on behalf of or in favour of any person, firm or corporation for bodily injury or damage to property arising out of or relating to

a.       Any negligent, reckless or intentionally harmful act or omission on the part of the DISTRIBUTOR, its servants or agents or persons with whom it has contracted or dealt with in any way.

b.      Any breach of any terms or condition mentioned in this Agreement including but not limited to any failure to comply with a direction of IMPORTER or to follow any instruction from IMPORTER with respect to matters relating to the product quality.


15.1     The DISTRIBUTOR undertakes that it will not at any time divulge the information in relation to the IMPORTER’s affairs or business or method of carrying on business.  The DISTRIBUTOR agrees that it will maintain as secret, and will not disclose to third persons any of IMPORTER’s trade secrets or other confidential information of IMPORTER obtained by the DISTRIBUTOR in connection with the performance of this Agreement. The DISTRIBUTOR’s obligation under this Clause shall remain in effect for a period of _______ years after any expiration or termination of this Agreement.


16.1            The DISTRIBUTOR shall be and remain an independent contractor and shall not be deemed, expressly or by implication, to be an agent, employee or servant of IMPORTER for any purpose whatsoever.

16.2           Nothing in this agreement shall constitute or be deemed to constitute a partnership between the parties hereto or constitute or be deemed to constitute the DISTRIBUTOR as the agent of IMPORTER for any purpose whatever and the DISTRIBUTOR shall have no authority or power to bind IMPORTER or to contract in the name and create a liability against IMPORTER in any way or for any purpose. IMPORTER shall not be responsible for the acts or defaults of the DISTRIBUTOR or of its employees or representatives.


17.1     The terms and conditions of this Agreement can be amended mutually by both the parties if agreed to in writing.

17.2     The parties hereto shall not assign any part of their obligations, benefit, right or interest to any third party without the written consent of the other Party, however assignment shall be permissible to any affiliate or subsidiary of a party provided that such assignee shall prior to assignment accept to abide by the terms of this Agreement in writing. Notwithstanding the foregoing, the DISTRIBUTOR shall not be entitled to appoint sub-distributors for performance of this Agreement.


18.1     DISTRIBUTOR can terminate this Agreement by giving _________ days notice. However if the IMPORTER wants to cancel the Agreement it shall give at least _________ notice in advance.

18.2     The DISTRIBUTOR shall have the right at any time to terminate the agreement forthwith in any of the following events:

a.       if  the IMPORTER commits a breach of any terms or conditions of this Agreement;

b.      if  the IMPORTER commits any irregularity which is harmful for DISTRIBUTOR.


19.1     Upon the termination of this Agreement from any cause or at any time previous to such termination at the request of DISTRIBUTOR, the IMPORTER shall promptly return to DISTRIBUTOR or otherwise dispose of as DISTRIBUTOR may instruct all material documents and papers whatsoever sent to the IMPORTER.

19.2     Upon such termination the DISTRIBUTOR shall return the goods or other property/documents which belongs to the IMPORTER as decided by the IMPORTER subject to the precondition that the IMPORTER clear all outstanding payments or any other due to the DISTRIBUTOR within _____ days.

19.3     The cost and charges incurred due to delivery of the products/goods in accordance with the preceding clause shall be borne by the IMPORTER.


20.1     In the event any term, condition or provision of this Agreement is held to be a violation of any applicable law, Statute or Regulation as in force in Bangladesh, the same shall be deemed to be deleted from this Agreement and shall be of no force and effect and this Agreement shall remain in full force and effect as if such term, condition or provision had not originally been contained in this Agreement.


21.1     In case of any dispute, controversy or claim arising out of or relating to this Agreement or its breach, termination or invalidity, the parties shall first try to resolve the matter amicably. If amicable settlement fails, then the same shall be finally settled by arbitration under the Singapore Arbitration Rules. Any such dispute, controversy or claim shall be referred to the arbitration of two Arbitrators, each party nominating one and both the Arbitrators shall appoint an Umpire.

21.2     The arbitral award shall be final and binding on the parties.

21.3     Each Party shall bear its own expenses, including costs of experts that it retains, travel expenses and legal fees; provided that, in apportioning costs under the Singapore Arbitration Rules, if the arbitral tribunal finds that any Party shall have acted unreasonably, it may, in its discretion, award all or a part of such expenses of the other Party against the Party that has acted unreasonably, and shall, in addition, take such unreasonable conduct into account in apportioning the other costs of the arbitration.

21.4     Unless otherwise agreed by the Parties to the arbitration, the arbitration shall take place in Dhaka, Bangladesh. The language of the arbitration and all pleadings, written statements, documents and decisions shall be in English, irrespective of the locations of any proceedings.




M/S X CHEMICALS ________________________________



M/S Y CHEMICALS _________________________________

In witness of : __________________________

In witness of: __________________________

Our Ref: LJ/PJ/01/2004

Dated: ……………………

Mr. Z

Re: Preparation of Distributorship Agreement between M/S. X        Chemicals and M/S. Y Chemicals.

Dear Sir,

We acknowledge receipt of your letter dated 18.01.04 on the above subject. We have perused the contents of your letter. Please find enclosed the Distributorship Agreement between M/S. X Chemicals and M/S. Y Chemicals.

If we can be of any further assistance in this matter, please do not hesitate to contact us.

Thanking you

Yours faithfully

Drafted by:

For: “The Lawyers & Jurists”
M.L.Hotel Tower Ltd,208,Shahid Syed Nazrul Islam Sarani,
Bijoy Nagar, Dhaka-1000.