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Direct Sales Agreement Template for United Arab Emirates

A Direct Sales Agreement governed by UAE law establishes the legal framework for direct selling arrangements between suppliers/manufacturers and their distribution partners. The agreement addresses key aspects including territorial rights, product specifications, pricing mechanisms, delivery terms, and compliance with UAE commercial regulations. It incorporates specific provisions required under UAE Federal Law No. 18 of 1993 (Commercial Transactions Law) and related regulations, ensuring proper protection for both parties while facilitating efficient business operations in the UAE market.

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What is a Direct Sales Agreement?

The Direct Sales Agreement is essential for businesses engaging in direct selling arrangements within the United Arab Emirates. It serves as the primary contract governing the relationship between suppliers/manufacturers and their distribution partners, establishing clear terms for product sales, territorial rights, and operational procedures. This agreement type is particularly important in the UAE market, where commercial relationships are heavily regulated under Federal Law No. 18 of 1993 and related legislation. The document typically includes comprehensive provisions for pricing, delivery, quality standards, and compliance with local regulations, making it suitable for both domestic and international trade relationships. It's designed to protect both parties' interests while ensuring smooth business operations in accordance with UAE commercial practices.

What sections should be included in a Direct Sales Agreement?

1. Parties: Identification of the seller/supplier and buyer/distributor with full legal names, addresses, and registration details as per UAE requirements

2. Background: Context of the agreement, business relationship, and general intent of the parties

3. Definitions: Detailed definitions of key terms used throughout the agreement, including technical and commercial terms

4. Appointment and Territory: Terms of appointment, designated sales territory, and any exclusivity provisions

5. Products and Pricing: Description of products covered, pricing structure, and price modification mechanisms

6. Orders and Delivery: Process for placing orders, delivery terms, timelines, and logistics arrangements

7. Payment Terms: Payment conditions, currency, payment methods, and credit terms if applicable

8. Quality and Compliance: Product quality standards, compliance with UAE regulations, and warranty provisions

9. Marketing and Promotion: Requirements for marketing activities, use of trademarks, and promotional materials

10. Reporting and Records: Required sales reports, record-keeping obligations, and audit rights

11. Confidentiality: Protection of confidential information and trade secrets

12. Term and Termination: Duration of agreement, renewal terms, and termination conditions

13. Governing Law and Dispute Resolution: UAE law as governing law and dispute resolution mechanisms

14. General Provisions: Standard boilerplate clauses including force majeure, notices, and assignment

What sections are optional to include in a Direct Sales Agreement?

1. Training and Support: Used when the supplier provides specific training or support services to the buyer

2. Performance Targets: Include when specific sales targets or KPIs are part of the agreement

3. E-commerce Provisions: Required if sales will be conducted through online channels

4. Data Protection: Detailed section needed if significant customer data processing is involved

5. Insurance Requirements: Include when specific insurance coverage is required from either party

6. Import/Export Compliance: Necessary for international trade aspects of the relationship

7. Non-Compete Provisions: Include when restricting parties from engaging with competitors

8. After-Sales Service: Required when specific after-sales support or warranty services are provided

What schedules should be included in a Direct Sales Agreement?

1. Schedule 1 - Product List: Detailed list of products covered under the agreement with specifications

2. Schedule 2 - Price List: Current prices and any volume-based discounts or special pricing arrangements

3. Schedule 3 - Territory Map: Detailed description or map of the authorized sales territory

4. Schedule 4 - Performance Metrics: Specific KPIs, targets, and measurement criteria if applicable

5. Schedule 5 - Technical Specifications: Detailed technical requirements and quality standards

6. Schedule 6 - Operating Procedures: Standard operating procedures for ordering, delivery, and returns

7. Appendix A - Marketing Guidelines: Guidelines for marketing, brand usage, and promotional activities

8. Appendix B - Warranty Terms: Detailed warranty terms and claims procedures

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok成人版 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Document Type

Contract to Sell

Cost

Free to use

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