Specrom Online

For technology, deciding between agency and distributor contracts is vitally important and goal-specific. If a manufacturer solely wants to expand business territory, the best economic option is an agency agreement. The representative is limited to finding clients, securing goods purchasing, and aiding in the receiving country’s customs proceedings.

For aggressive commercial endeavors, a distributor contract is more suitable for technology products. However, the manufacturer should require a highly-specific contract, which is unnecessary for many other goods.

In both cases, a manufacturer should consider sales restraints imposed by the expansion state. Such constraints may be issued for two reasons. First, a boycott may exist for the nation receiving the goods based on their behavior with a United States ally. Second, national security concerns can impact business if a government believes that the sensitive technology might be stolen by an enemy state. These restraints were commonly used during the cold war, but are not regularly implemented today.

A manufacturer should include protective clauses in the contract. For example, the manufacturer may allow the distributor to improve the technology if a specific issue with the product is identified.. To protect intellectual property, the contract will contain the provision that any improvements made to the product will be transferred to the manufacturer.

In turn, the distributor would also protect the company’s intellectual property by placing clauses in contracts with customers to secure ownership of the technology’s protected elements in the goods’ development.

Other contracts commonly linked to technology-related distributor contracts include licensing agreements, trademarks agreements, and know-how agreements.

Goods and trademarks are two different assets of the manufacturer, and both can be transferred, with precautionary measures, to the distributor for advancement.

With licensing agreements, the manufacturer authorizes the distributor to use the protected technology only for its natural and original intent. A manufacturer may also include conditions ensuring that the company can solely treat and improve this technology.

Trademark agreements concern the manufacturer’s trademark. Trademark refers to the distinctive name, symbol, motto, or design that legally identifies a company or its products and services, and sometimes prevents others from using identical or similar marks.