A Reseller or Distribution Agreement governs how products are marketed and sold through intermediaries, defining territories, pricing, and performance expectations. This playbook explains negotiation levers around exclusivity, revenue targets, and brand protection.
Why This Matters: Leaks of proprietary data can result in competitive harm or legal penalties. Strong confidentiality provisions preserve value and trust.
Negotiation strategy
If you're the Manufraturer:
Ensure the confidentiality clause is comprehensive, covering all proprietary data and specifying permissible uses. Advocate for a duration that extends post-termination to protect long-term interests.
If you're the Distributor:
Negotiate for clear definitions of confidential information and reasonable limitations on the duration of obligations. Seek exceptions for publicly available information.
Essential elements
1
Definition of Confidential Information
Covers all proprietary data.
2
Permissible Uses
Specifies allowed information usage.
3
Duration of Obligations
Extends post-termination period.
Action framework
ACCEPT
Propose edits if the clause lacks clarity on definitions or duration.
EDIT
Reject if the clause fails to protect critical proprietary information.
ADD
Add language to cover jurisdiction-specific requirements or missing elements.
PRO TIP
Always ensure the confidentiality clause aligns with both parties' business goals and legal standards.
Example clauses
FAVORABLE
Comprehensive Protection
"The Receiving Party shall maintain the confidentiality of all Confidential Information disclosed by the Disclosing Party and shall not use such information for any purpose other than as permitted under this Agreement. These obligations shall continue for a period of [X] years following the termination of this Agreement."
NEUTRAL
Standard Protection
"Confidential Information shall be protected for a period of [Y] years post-termination, with exceptions for information that becomes public through no fault of the Receiving Party."
UNFAVORABLE
Limited Scope
"Confidential Information is only protected during the term of this Agreement, with no obligations post-termination."
Fallbacks
High-Risk Projects
In high-risk projects, extend the duration of confidentiality obligations and include specific security measures to prevent data breaches.
Cross-Border Transactions
Ensure compliance with international data protection laws, such as GDPR, by including jurisdiction-specific language.
Joint Ventures
In joint ventures, ensure mutual confidentiality obligations to protect shared proprietary information and maintain trust.
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