When setting up a marketing strategy, a manufacturer must ensure that it has the necessary resources to achieve maximum exposure of its product. To speed up the distribution process, the manufacturer may wish to have local retailers provide the customer service on its behalf, while the manufacturer continues to design and manufacture its product - thereby allowing the manufacturer to focus on staying ahead of the competition.

This template sets out the main elements of the legal and financial framework behind a dealership agreement.

We recommend using this template to govern the relationship between a manufacturer of consumer products that does not wish to directly handle the sale of its products, and an exclusive distributor with a retail outlet. A dealership differs from a franchise (see template K05400) or lease management agreement (template K06500) in that the dealers has more autonomy with regard to operating its business than the other two types of business arrangements. The classic example of a dealership is in the automotive industry, where every major manufacturer sells its products through a network of dealers.

0.00 INTERPRETATION
0.01 Definitions
0.01.01 Activities
0.01.02 Agreement
0.01.03 Breach
0.01.04 Change in Control
0.01.05 Competing Product
0.01.06 Confidential Information
0.01.07 Control
0.01.08 Dealership
0.01.09 Encumber or Encumbrance
0.01.10 Establishment
0.01.11 Force Majeure
0.01.12 Fundamental Provisions
0.01.13 Industrial Property
0.01.14 Intellectual Property
0.01.15 Legal Representatives
0.01.16 PARTY
0.01.17 Person
0.01.18 Prime Rate
0.01.19 Product(s)
0.01.20 Related Person
0.01.21 Subsidiary
0.01.22 Territory
0.02 Precedence
0.03 Jurisdiction
0.03.01 Governing Law
0.03.02 Non-compliance
0.04 Miscellaneous
0.04.01 Cumulative Rights
0.04.02 Time and Dates
0.04.03 Financial References
0.04.04 References within Agreement
0.04.05 Gender and Number
0.04.06 Headings
0.04.07 Presumptions
0.04.08 Knowledge
0.04.09 Approval
0.04.10 GAAP
1.00 PURPOSE
1.01 Grant of Dealership
1.02 Conditions
1.02.01 Requisered by MANUFACTURER
1.02.02 Required by DEALER
1.02.03 Choice
2.00 CONSIDERATION
2.01 Sale Price
2.02 Adjustment
3.00 TERMS OF PAYMENT
3.01 Compliance with Terms
3.01.01 Payment
3.01.02 Orders
3.01.03 Suspension of Delivery
3.01.04 Surcharge
3.01.05 Certified Cheque
3.02 Allocation
3.03 Waiver of Compensation
3.04 Interest
4.00 SECURITY
4.01 In favour of MANUFACTURER
4.02 In favour of DEALER
4.03 Suretyship
4.04 Right of Ownership
4.05 Subordination
4.05.01 Shareholders
4.05.02 Sole Proprietorship or Partnership
4.06 Reimbursement of Loans
4.07 Capital Reduction
5.00 MUTUAL REPRESENTATIONS AND WARRANTIES
5.01 Status
5.02 Authority
5.03 Binding Agreement
5.04 Canadian Resident
5.05 Commission
5.06 Insurance
5.07 Nominee
5.08 Fundamental Provisions
5.09 Disclosure
6.00 REPRESENTATIONS AND WARRANTIES OF THE MANUFACTURER
6.01 Status
6.02 Authority
6.03 Binding Agreement
6.04 Insurance
6.05 Nominee
6.06 Fundamental Provisions
6.07 Disclosure
6.08 Compliance with Legislation
6.09 Quality
6.10 Products Supply
6.11 Intellectual Property
6.12 Trade-mark
6.13 Granted Rights
7.00 REPRESENTATIONS AND WARRANTIES OF THE DEALER
7.01 Status
7.02 Authority
7.03 Binding Agreement
7.04 Insurance
7.05 Nominee
7.06 Fundamental Provisions
7.07 Disclosure
7.08 Operating Permits
7.09 Legal Proceedings
7.10 Fiscal Position
7.10.01 Default
7.10.02 Charges
7.10.03 Deductions
7.11 Management of the Dealership
7.12 Solvency
8.00 MUTUAL DUTIES AND OBLIGATIONS
8.01 Confidential Information
8.01.01 Undertaking
8.01.02 End of Agreement
8.02 Insurance
8.02.01 Insured Risks
8.02.02 Amount of Coverage
8.02.03 Issuer
8.02.04 Co-insured
8.02.05 No Limitation
8.03 Indemnification
8.03.01 “Loss”
8.03.02 Scope
8.03.03 Procedure
8.03.04 Deductible
8.03.05 Limitation on Claims
8.04 Disclosure of Agreement
9.00 DUTIES AND OBLIGATIONS OF THE MANUFACTURER
9.01 Ongoing Training
9.01.01 Marketing
9.01.02 Maintenance
9.01.03 Traveling Staff
9.02 Publicity and Promotional Means
9.02.01 Programs and Materials
9.02.02 Duty to Purchase
9.03 Technical Documentation
9.03.01 Supply
9.03.02 Ownership
9.04 Supply
9.04.01 Exclusivity
9.04.02 Allocation
9.04.03 Delay or Default in Delivery
9.04.04 Manufacturing Interruption
9.04.05 Claims
9.05 After Sale Service
9.05.01 Warranty
9.05.02 Product Maintenance
9.05.03 Inspection Campaign
10.00 DUTIES AND OBLIGATIONS OF THE DEALER
10.01 Supplies
10.01.01 Exclusivity
10.01.02 Orders
10.01.03 Inventory
10.01.04 Planning
10.01.05 Delivery
10.01.06 Diversion
10.01.07 Acknowledgement
10.02 Management of the Dealership
10.02.01 Installations
10.02.02 Business Hours
10.02.03 Means of Operation
10.02.04 Operating Permits
10.02.05 Control
10.03 Marketing of the Products
10.03.01 Sale Service
10.03.02 Promotion
10.03.03 Local Publicity
10.03.04 Pricing Policy
10.03.05 Other Products
10.03.06 Additional Warranties
10.03.07 Sale Objectives
10.04 After Sale Service
10.04.01 Products Maintenance
10.04.02 Use of Parts
10.04.03 Inspection Campaign
10.04.04 Service Organization
10.04.05 Service Equipment
10.04.06 Parts Inventory
10.04.07 Complaints
10.05 Trade-Marks
10.05.01 Acknowledgement
10.05.02 Restriction
10.05.03 Pre-authorized Use
10.05.04 No Transfer
10.05.05 Denunciation
10.06 Financing of Operations
10.06.01 Approved Financial Institutions
10.06.02 Other Financial Institution
10.07 Accounting
10.07.01 Financial Statements
10.07.02 Reports
10.07.03 Registers
10.07.04 Examination
10.08 Taxes
11.00 SPECIAL PROVISIONS
11.01 Assignment
11.01.01 Prohibition
11.01.02 Effect of Breach
11.01.03 Exception
11.02 Force Majeure
11.02.01 No Default
11.02.02 Duty
11.02.03 Rights of Other PARTY
11.03 Relationship
11.03.01 Independent Contractors
11.03.02 No Control over Performance
11.03.03 No Authority to Bind
11.04 Further Assurances
11.05 Other Remedies
11.05.01 Choices
11.05.02 No Limitations
11.06 Prescription
11.07 Intellectual Property
11.08 Ownership of the Dealership
11.08.01 Percentage
11.08.02 Change
11.09 Pre-authorized Transfers
11.09.01 Transfer by MANUFACTURER
11.09.02 Transfer by DEALER
12.00 GENERAL PROVISIONS
12.01 Notice
12.02 Dispute Resolution
12.02.01 Good Faith Negotiations
12.02.02 Mediation
12.02.03 Arbitration
12.03 Election
12.04 Counterparts
12.05 Amendment
12.06 Waiver of Rights
12.07 Electronic Transmission
12.08 Language
13.00 TERMINATION
13.01 Mutual Consent
13.02 Unilateral Termination
13.03 By MANUFACTURER
13.03.01 Immediate
13.03.02 Upon FIVE (5) days’ written notice
13.03.03 Upon THIRTY (30) days’ written notice
13.03.04 Upon NINETY (90) days written notice
13.03.05 Termination Notice
13.03.06 By DEALER
13.04 Cessation of Trade-mark Use
13.04.01 Undertaking
13.04.02 Default
13.05 Transition
13.05.01 Cancellation
13.05.02 Purchase
13.05.03 Inventory
13.05.04 Products
13.05.05 Documentation
14.00 EFFECTIVE DATE
14.01 Retroactivity
14.02 Execution
14.03 Deferral
15.00 DURATION
15.01 Probationary or Trial Period
15.02 Initial Term
15.03 Renewal
15.03.01 First Renewal
15.03.02 Subsequent Renewal
15.03.03 No Renewal
15.04 Survival
15.05 Non renewal
16.00 SCOPE


SCHEDULE A – EXCERPT OF A RESOLUTION OF THE MANUFACTURER
SCHEDULE B – EXCERPT FROM A RESOLUTION OF THE DEALER
SCHEDULE 4.03 – SURETYSHIP