This software distribution agreement is between
The Provider has created and licenses the software program known as
The Distributor operates various websites, including
The Provider wants to sell the Software through the Site, with the Distributor's assistance.
The parties therefore agree as follows:
1. LICENSE; NO EXCLUSIVITY.
- (a) License. The Provider gives the Distributor a nonexclusive right and license to:
- (i) market the Software to licensees or potential licensees;
- (ii) buy Software licenses for distribution to licensees or potential licensees; and
- (iii) distribute the Software and licenses to the Software to licensees or potential licensees.
- (b) No Ownership; No Exclusivity. The Distributor acknowledges that:
- (i) the Provider reserves all ownership rights in the Software;
- (ii) the Distributor acquires no interest in the Software, except for the right to offer for sale or to sell the Software to third parties in accordance with the terms of this agreement; and
- (iii) nothing contained in this agreement restricts the Provider's right to sell, license, or otherwise grant rights in the Software to third parties.
2. TERM AND TERMINATION.
- (a) Term. This agreement will become effective as described in section 23 and continue for an initial term of
year(s) (the "Term"). Unless either party gives written notice to the other at least days before the end of the Term, this agreement will renew automatically for an additional -year term. This automatic extension will continue to apply at the end of each extended period until the agreement is terminated. However, this agreement may not remain effective for more than years. - (b) Termination. This agreement may be terminated:
- (i) by either party, on provision of
days' written notice before the end of a Term; - (ii) by either party for a material breach of any provision of this agreement by the other party, if the other party's material breach is not cured within
days of receipt of written notice of the breach.
- (i) by either party, on provision of
- (c) Effect of Termination. After the termination of this agreement for any reason, the Distributor shall:
- (i) immediately stop all further publication, sale, and other use of the Software;
- (ii) remove all Software from the Site; and
- (iii) destroy or return to the Provider all hard or electronic copies of Software in its possession or control.
- Any accrued rights to payment and remedies for breach will survive the termination of this agreement and, if directed by the Distributor, the Provider shall fulfill any orders placed under this agreement before termination, even if the fulfillment occurs after the termination.
3. DISTRIBUTION, MARKETING, AND SUPPORT.
The Distributor shall offer for sale and sell the Software on the Site via software download. The Provider will make available to the Distributor a downloadable file and collateral material and content to allow the Distributor to offer for sale and sell the Software, including marketing and delivery of the Software to customers. For Software sold under this agreement, the Provider shall:
- (a) deliver support in the same manner and to the same extent as it supports the Software sold internally or through other distributors;
- (b) provide a limited royalty-free (other than as set forth in this agreement) license to the Distributor to access and print information, logos, terms, and conditions with respect to the sale and download of the Software by the Distributor's customers; and
- (c) require customers who purchase the Software to agree to a standard terms of use "click-wrap" agreement that identifies the Provider as the seller of the Software and that requires the purchaser to hold harmless any third-party distributor (including the Distributor) from legal actions related to the Software and its operation.
The Distributor shall have the sole discretion to determine the manner of all marketing, offering, sale, payment, or download of the Software on the Site, if those efforts are consistent with this agreement.
4. FEES.
- (a) The Distributor shall charge a fee to the Software's licensees for the electronic transmission and delivery of the Software as set forth below.
- (b) The Provider will receive a fee from the Distributor for providing the Software to the Distributor and permitting the licensing of the Software by the Distributor to its customers.
- These fees shall be based on a per unit price generated by the sale of the Software by the Distributor. As of the effective date of this agreement (as set out in section 23), the retail price for the Software is
. - For monthly order volume of up to
successful sales, the Distributor shall pay the Provider . For monthly order volume of and above, the Distributor shall pay the Provider .
5. PAYMENT OF FEES.
Within
6. MINIMUM RETAIL PRICE.
The Distributor may set the price charged for the Software on its Site. However, that retail price may not be less than
7. PROVIDER REPRESENTATIONS.
The Provider hereby represents that:
- (a) it has prepared the Software and owns all intellectual property interest in the Software;
- (b) it owns all interest in the Software and any documentation;
- (c) neither the Software nor its documentation infringe or will infringe the intellectual property rights or other rights of any third party;
- (d) the Software will perform according to any warranty established by the Provider in direct sales to consumers, with reasonable warranties as to performance and viruses; and
- (e) it has the right to authorize the Distributor to market, offer for sale, and sell the Software under this agreement.
8. NO EMPLOYMENT RELATIONSHIP.
Neither party, their agents, or their employees are employees, agents, or representatives of the other party. Neither party may enter into any contract or commitment in the name or on behalf of the other party, or to bind the other party in any capacity.
9. LIMITATION OF LIABILITY.
EXCEPT FOR CLAIMS IN SECTION 10 BELOW, IN NO EVENT WILL EITHER PARTY BE LIABLE OR RESPONSIBLE TO THE OTHER FOR ANY TYPE OF INCIDENTAL, PUNITIVE, SPECIAL, INDIRECT, OR CONSEQUENTIAL DAMAGES RELATING TO THIS AGREEMENT, INCLUDING LOST REVENUE, LOST PROFITS, LOSSES ASSOCIATED WITH TRANSACTIONS ENTERED OR NOT ENTERED INTO ON THE SITE, EVEN IF ADVISED OF THE POSSIBILITY OF THOSE DAMAGES, WHETHER ARISING UNDER ANY THEORY OF CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY, OR OTHERWISE. EACH PARTY'S LIABILITY TO THE OTHER PARTY OR ANY THIRD PARTIES IS LIMITED TO THE LESSER OF: (i) THE AMOUNT PAYABLE BY THE DISTRIBUTOR TO THE PROVIDER UNDER THIS AGREEMENT DURING THE 12-MONTH PERIOD IMMEDIATELY PRECEDING THE DATE ON WHICH THE LOSS OR DAMAGE FIRST OCCURRED; OR (ii)
SOME JURISDICTIONS DO NOT ALLOW THE LIMITATION OR EXCLUSION OF LIABILITY FOR INCIDENTIAL OR CONSEQUENTIAL DAMAGES SO, TO THE EXTENT NOT ALLOWED BY LAW, SOME OF THE ABOVE LIMITATIONS MAY NOT APPLY TO EITHER OR BOTH PARTIES.
10. INDEMNIFICATION OF DISTRIBUTOR.
The Provider is solely responsible for the representations listed in section 7 above and its claimed intellectual property and ownership rights in the Software. The Provider shall indemnify the Distributor against any award, charge, claim, compensatory damages, cost, damages, exemplary damages, diminution in value, expense, fee, fine, interest, judgment, liability, settlement payment, penalty or other loss or any attorney's or other professional's fee and disbursement, court filing fee, court cost, arbitration fee, arbitration cost, witness fee, and each other fee and cost of investigating and defending or asserting a claim for indemnification arising out of any violation of this agreement, or from infringement or any claim of infringement of any patent, trademark, copyright, or trade secret with respect to the Software. If there is a legal action that seeks remedy from the Distributor concerning the Provider's warranty, infringement of copyright, patent, trade secret, or other proprietary right in the Software, the Distributor shall immediately notify the Provider of that action. The Distributor's failure to provide timely notification shall not limit its right to seek indemnification, unless that failure has a material impact on the Provider's defense of the claim.
11. CONFIDENTIAL INFORMATION.
During the Term
12. INTERRUPTION OF SERVICE.
Although the Distributor will attempt to keep its Site operational at all times, a certain amount of downtime and interruption of service is inevitable. The Distributor is not responsible for any interruption of service to the Site and the Provider shall not hold the Distributor liable for any consequences of interruption of the Site, regardless of the cause, other than refunds under section 5 above.
13. COMPLIANCE WITH LAWS.
The Provider has and shall comply with all applicable laws and regulations regarding its business and the export or availability of the Software to the Distributor for purposes of providing the Software to the Distributor's customers. The Provider represents that the Distributor's resale of the Software to its customers does not violate any law or regulation.
14. GOVERNING LAW.
- (a) Choice of Law.
The laws of the state of govern this agreement (without giving effect to its conflicts of law principles). - (b) Choice of Forum. Both parties consent to the personal jurisdiction of the state and federal courts in
County, .
15. AMENDMENTS.
No amendment to this agreement will be effective unless it is in writing and signed by a party.
16. ASSIGNMENT AND DELEGATION.
- (a) No Assignment. Neither party may assign any of its rights under this agreement, except with the prior written consent of the other party. All voluntary assignments of rights are limited by this subsection.
- (b) No Delegation. Neither party may delegate any performance under this agreement, except with the prior written consent of the other party.
- (c) Enforceability of an Assignment or Delegation. If a purported assignment or purported delegation is made in violation of this section, it is void.
17. COUNTERPARTS; ELECTRONIC SIGNATURES.
- (a) Counterparts. The parties may execute this agreement in any number of counterparts, each of which is an original but all of which constitute one and the same instrument.
- (b) Electronic Signatures. This agreement, agreements ancillary to this agreement, and related documents entered into in connection with this agreement are signed when a party's signature is delivered by facsimile, email, or other electronic medium. These signatures must be treated in all respects as having the same force and effect as original signatures.
18. SEVERABILITY.
If any one or more of the provisions contained in this agreement is, for any reason, held to be invalid, illegal, or unenforceable in any respect, that invalidity, illegality, or unenforceability will not affect any other provisions of this agreement, but this agreement will be construed as if those invalid, illegal, or unenforceable provisions had never been contained in it, unless the deletion of those provisions would result in such a material change so as to cause completion of the transactions contemplated by this agreement to be unreasonable.
19. NOTICES.
- (a) Writing; Permitted Delivery Methods. Each party giving or making any notice, request, demand, or other communication required or permitted by this agreement shall give that notice in writing and use one of the following types of delivery, each of which is a writing for purposes of this agreement: personal delivery, mail (registered or certified mail, postage prepaid, return-receipt requested), nationally recognized overnight courier (fees prepaid), facsimile, or email.
- (b) Addresses. A party shall address notices under this section to a party at the following addresses:
- If to the Distributor:
- If to the Provider:
- (c) Effectiveness. A notice is effective only if the party giving notice complies with subsections (a) and (b) and if the recipient receives the notice.
20. WAIVER.
No waiver of a breach, failure of any condition, or any right or remedy contained in or granted by the provisions of this agreement will be effective unless it is in writing and signed by the party waiving the breach, failure, right, or remedy. No waiver of any breach, failure, right, or remedy will be deemed a waiver of any other breach, failure, right, or remedy, whether or not similar, and no waiver will constitute a continuing waiver, unless the writing so specifies.
21. ENTIRE AGREEMENT.
This agreement constitutes the final agreement of the parties. It is the complete and exclusive expression of the parties' agreement about the subject matter of this agreement. All prior and contemporaneous communications, negotiations, and agreements between the parties relating to the subject matter of this agreement are expressly merged into and superseded by this agreement. The provisions of this agreement may not be explained, supplemented, or qualified by evidence of trade usage or a prior course of dealings. Neither party was induced to enter this agreement by, and neither party is relying on, any statement, representation, warranty, or agreement of the other party except those set forth expressly in this agreement. Except as set forth expressly in this agreement, there are no conditions precedent to this agreement's effectiveness.
22. HEADINGS.
The descriptive headings of the sections and subsections of this agreement are for convenience only, and do not affect this agreement's construction or interpretation.
23. EFFECTIVENESS.
This agreement will become effective when all parties have signed it. The date this agreement is signed by the last party to sign it (as indicated by the date associated with that party's signature) will be deemed the date of this agreement.
24. NECESSARY ACTS; FURTHER ASSURANCES.
Each party shall use all reasonable efforts to take, or cause to be taken, all actions necessary or desirable to consummate and make effective the transactions this agreement contemplates or to evidence or carry out the intent and purposes of this agreement.
[SIGNATURE PAGE FOLLOWS]
Each party is signing this agreement on the date stated opposite that party's signature.
Date: _________________ |
By:__________________________________________ |
| Name: |
Date: _________________ |
By:__________________________________________ |
| Name: |
How-to guides, articles, and any other content appearing on this page are for informational purposes only, do not constitute legal advice, and are no substitute for the advice of an attorney.
Software distribution agreement: How-to guide
In the highly competitive world of modern business, a company must have great products, excellent marketing, and top-notch customer service. Organizations must also seek strategic partnerships to encourage continued growth and long-term stability.
Businesses choose their associations based on many factors. In some cases, one company may be adept at technological development, and another may be an expert in creating efficient distribution chains. The two organizations can get together and ensure the software gets to end users quickly and economically.
In such instances, a software distribution agreement is valid. Such agreement is between a provider and a distributor. Herein, both parties agree that one or many distributors will sell the provider’s software at a reasonable price.
Key terms of software distribution agreements
The following instructions will help you understand the terms of your software distribution agreement. Please review the entire document before starting your step-by-step process.
Introduction of parties
This section identifies the document as an agreement for the distribution of software. Add the effective date of the document, the parties involved, and the type of organization(s) they are.
In the document, the “provider” is the party creating the software, and the “distributor” is the party distributing it. They’re collectively referred to as “parties.”
Recitals
The “whereas” clauses, referred to as recitals, define the world of the agreement and offer key information about the parties. This section reiterates the parties’ desire to agree on the software distribution.
Describe each party’s business in general terms. Also, describe the software that is the subject of the agreement. Be specific. If more than one item is being distributed, list each separately and provide some identifying details.
No exclusivity
This section appoints the distributor as a distributor for the provider and states that this is a “non-exclusive” arrangement. In other words, the distributor isn’t the only company or person entitled to sell the software.
Distribution, marketing, and support
The provider here promises to give the distributor access to the software so the distributor can sell it. Use this section to get acknowledgment on the terms, e.g.,
- The distributor doesn’t own the software; they only have the license to use and sell it.
- The distributor is free to market or sell the software as they see fit, as long as it follows all of the terms and conditions of this agreement.
Fees
The distributor must pay a fee for each software sale on its site. Structure this arrangement to suit your business. Depending on the distributor's sales, define whether they’ll pay a certain amount to the provider or would prefer to specify a fee for each sale.
Payment of fees
This section mentions that the distributor pays the amounts owed to the provider within a certain period at the end of every month. In the written notice, mention how long the distributor has to make these payments. Note that the distributor must also provide a payment statement explaining what sales were made and what deductions were taken.
Minimum retail price
This section allows the distributor to set the sale price for the software from the initial release date. The provider can also suggest a minimum retail price for the software.
Representations and warranties
This section lists the provider’s “representations” to the distributor to ensure there are no misunderstandings. Define the conditions required for the distributor to enter the arrangement, such as:
- The provider prepares the software and owns all of its intellectual property.
- The provider owns the software.
- The software doesn’t infringe on anyone else’s property rights.
- The software will do what it promises it’ll do.
- Provider can give the distributor the authority to sell the software.
Term and termination
- Term: The term of an agreement is how long it’ll last. This section lets you establish how long you want this period (e.g., six months, one year, etc.). You can terminate it after a defined period or let it automatically renew on the renewal date. You can also specify the number of times the agreement will follow automatic renewal.
- Termination: This section gives both parties the right to terminate the agreement at any time for any reason, just by providing notice to the other party. They must add a number of days ahead of time that a party must give notice that it wants to end the agreement.
- Responsibilities on termination: Once the agreement is terminated, the distributor must remain responsible and complete the arrangement. More specifically, the distributor has to stop selling the software, take it down from its site, and return any remaining hard copies to the provider (or destroy any electronic copies).
No employment relationship
This section explains that both the parties aren’t employees or partners to each other. This distinction is important for legal reasons, including insurance coverage requirements, liability, and taxes. The agreement shall emphasize this divide, but both parties should keep the line between independent contractors and employees in performing their duties. Every state’s or country’s laws govern the independent contractors. Ensure that the agreement follows local restrictions.
Limitation of liability
This section mentions that both parties aren’t liable for numerous damages, such as consequential, punitive, and direct or indirect damages. Both parties may be unwilling to accept responsibility for any harm that could, in some tenuous way or another, be related to the agreement or some sale that did or didn’t happen on the site.
Indemnification of distributor
This provision describes the occasions when the provider will be responsible for any losses the distributor experiences. Specifically, the provider will pay damages that the distributor suffers if the provider has committed any substantial breach of this agreement. The distributor must notify the provider about any developing lawsuits so the provider can assist in defending against these claims. This makes sense since the provider will be responsible for paying any damages if the case is lost.
Confidential information
This section defines confidential information for purposes of the agreement and explains how each party will treat the other party’s confidential information and trade secrets, e.g.,
- A party can use the information only for purposes intended by the agreement. For example, if the information was disclosed to help the distributor sell the software, the information can be used only for that purpose.
- If a court orders the disclosure of information, the party ordered to disclose it must talk to the other party before making the disclosure.
Interruption of service
The internet is unreliable. Connections fail occasionally, or websites are unavailable to the public. Suppose any of these circumstances occur and potential customers can’t access the site. In that case, the parties agree that the distributor won’t be liable to the provider for any damages (e.g., lost sales).
Assignment
This section explains that each party must obtain the other’s written permission before assigning its obligations and interests.
No implied waiver
This clause explains that if either party allows the other to ignore or break an obligation under the agreement, it doesn’t mean that the party waives any future rights to require the other to fulfill those (or any other) obligations.
For example, consider the distributor’s obligations to provide monthly statements. Imagine that the distributor hasn’t delivered these reports for six months, but the provider hasn’t said anything about it. Later, the provider can require the obligations statements, as required in the agreement. If the distributor claims that this right was “waived” because the provider didn’t enforce it before, the provider can point to this section that mentions—a party’s failure to enforce the provision at one point doesn’t mean it can’t enforce it later.
Notice
In this section, add the mailing address of the provider and the distributor where all the official or legal correspondence should be delivered.
Governing law
The provider may work in one state and the distributor in another. A governing law provision allows the parties to choose the state laws used to interpret the agreement.
Compliance with laws
In this section, the parties promise that their actions under the agreement won’t violate the applicable laws.
Severability
This clause protects the terms of the agreement as a whole, even if one part is later invalidated. For example, if state law prohibits arbitration clauses, it won’t undo the agreement. Instead, only the section dealing with arbitration would be invalidated, leaving the remainder of the agreement enforceable.
Entire agreement
In this section, the parties acknowledge that this document is the agreement they’re signing.
Headings
This confirms that the headings at the beginning of every section are for organizational purposes only and shouldn't be used to interpret the agreement.
Frequently asked questions
What is a software distribution agreement?
When a company specializing in software development works with a company specializing in distribution, there can be significant rewards for both. Sell more software with a successful partnership using the software distribution agreement. It allows both companies to create a supply chain that gets the software to more customers.
How do you structure a distribution agreement?
Here's the information you'll need to complete your software distribution agreement:
- Who the distributor is: Have their name and contact information ready
- Who the supplier is: Have their name and contact information ready
- Pricing: Agree on a minimum price and how much the distributor will pay the supplier
- Timeline: Know how long you want the agreement to last and if you want it to be renewed
When should you use an exclusive software distribution agreement?
If you want to ensure that the company has only one distributor for its software, use an exclusive distribution agreement. On the contrary, in a non-exclusive software distribution agreement, the developer company can hire additional distributors to offer the same products.
What information should be considered while drafting the software distribution agreement?
Identify all the prerequisites before finalizing your agreement. For example, is the distributor supporting the customer and the product, or is it the provider’s responsibility? If it is the distributor, will its employees be required to take training classes to familiarize themselves with the product?
Is it essential to review the agreement once it’s ready?
Yes, both parties should review the completed agreement carefully to ensure that all relevant points have been included. Ensure that all the terms are explicitly mentioned in the agreement. This will help both parties clearly understand their responsibilities under the agreement.
Should the agreement be notarized when signatures are added?
Yes, it’s a good idea to have your agreement notarized, as it’ll reduce the challenges to the validity of a party’s signature later. Save two signed copies of the agreement for you and the other party. Take an attorney’s help to customize and draft the document according to your business needs.
Free Software Distribution Agreement Template
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