Simply developing a good product does not guarantee the commercial success of a business; marketing that product is the key to success.

To build a sales force, the manufacturer can create its own team of sales representatives, which requires fixed costs without any guaranteed return, or it can retain the services of independent agents, who are paid only when they make a sale. A business usually prefers to use a sales team made up of its own employees when selling in local markets. However, the strategy changes when entering new markets that are less familiar to the manufacturer. In such cases, it may be better to use the services of a local sales representative to act as agent of the manufacturer.

The following document provides the legal framework governing the relationship between the manufacturer of a product and the manufacturing agent entrusted with the task of marketing that product in a specific territory.

This template should be used when a manufacturer does not wish to have an in-house sales team (see our Sales Representative Agreement template C02310) to market its products, but nevertheless wishes to maintain control on its sales. Under a distribution agreement (see template K02200), the distributor is in control of the products it distributes, because it buys them from the manufacturer and resells them directly to its customers. Whereas under a manufacturer's agent agreement, the agent remains under the control of the manufacturer since it cannot complete a sale without the intervention of the manufacturer.

0.00 INTERPRETATION
0.01 Definitions
0.01.01 Activities
0.01.02 Agreement
0.01.03 Best Effort
0.01.04 Breach
0.01.05 Client
0.01.06 Change in Control
0.01.07 Confidential Information
0.01.08 Encumber or Encumbrance
0.01.09 Force Majeure
0.01.10 Fundamental Provisions
0.01.11 Intellectual Property
0.01.12 Legal Representatives
0.01.13 Net Value
0.01.14 Order
0.01.15 PARTY
0.01.16 Person
0.01.17 Prime Rate
0.01.18 Product(s)
0.01.19 Related Person
0.01.20 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
1.02 Conditions
1.02.01 Required by MANUFACTURER
1.02.02 Required by AGENT
1.02.03 Choice
2.00 CONSIDERATION
2.01 Commission
2.02 Revision
2.03 Conflicts
3.00 TERMS OF PAYMENT
3.01 Exigibility
3.01.01 Delay
3.01.02 Notice
3.01.03 Payment
3.02 Currency
3.03 Payment Location
3.04 Taxes
3.05 Contest
3.06 Interest
4.00 SECURITY
4.01 In favour of MANUFACTURER
4.02 In favour of AGENT
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 Quality
6.09 Intellectual Property
6.10 Compliance with Legislation
6.11 Production and Delivery
7.00 REPRESENTATIONS AND WARRANTIES OF THE AGENT
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 Resources
7.09 Language
7.10 Contacts
7.11 Competition
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
8.05 Disclosure of Agreement
9.00 DUTIES AND OBLIGATIONS OF THE MANUFACTURER
9.01 Exclusivity
9.01.01 Undertaking
9.01.02 Exception
9.02 Production and Supply
9.02.01 Quantity
9.02.02 Quality
9.02.03 Compliance with Legislation
9.02.04 Responsibility
9.02.05 Intellectual Property
9.03 Transportation and Delivery
9.04 Sale
9.04.01 Approval
9.04.02 Response
9.04.03 Commercial Proposal
9.05 Promotional Material
9.06 Technical Support
9.07 Communication with AGENT
9.07.01 Correspondance with Potential Clients
9.07.02 Competing Products
9.08 Account Management
9.09 Rendering Account
10.00 DUTIES AND OBLIGATIONS OF THE AGENT
10.01 Agency
10.01.01 Best Effort
10.01.02 Conduct
10.02 Representation Manual
10.03 Promotional Material
10.04 Rendering Account
10.04.01 Summary
10.04.02 Identification Number
10.04.03 Report
10.05 Competitive Watch
10.06 Compliance with the Territory
10.07 Negotiations
10.08 No Agreement
10.09 Entertainment Expenses
10.10 Non-Competition
10.10.01 Engagement
10.10.02 Other Products
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
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 Without Notice
13.04 Prior Notice
13.05 Change of Control
13.06 Consequences of Termination
13.06.01 Delivery
13.06.02 Return
13.06.03 Commercial Names and Trade-marks
13.06.04 Documents
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 Renewals
15.04 Survival
15.05 Non Renewal
16.00 SCOPE


SCHEDULE A – EXCERPT FROM A RESOLUTION OF THE MANUFACTURER
SCHEDULE B – EXCERPT FROM A RESOLUTION OF THE AGENT
SCHEDULE 0.01.18 - PRODUCT