1.3 License Fee. Concurrently with the execution of this Agreement Distributor shall pay to the Company the sum of Five Million Dollars (US$ 5,000,000) as a. INTRODUCTION A. Focus The purposes of this article and related presentation are: • To review the forms of software distribution and common problems faced in drafting these documents. • To analyze recent court decisions relating to computer and software distribution. • To review the impact of the AICPA Statement of Position 97-2 on Software Revenue Recognition on the drafting of distribution agreements. • To examine contract provisions in distribution agreements and drafting considerations. • To review proposed Article 2B of the Uniform Commercial Code. • User • Software Developer • Independent Contractor/Agent • Distributor • Dealer • Value Added Reseller (VAR) • Original Equipment Manufacturer (OEM) • Mail Order Operation • Bulletin Board Operator • Internet Services Provider • Software Pirate • Internet Services/Bulletin Board Subscriber C. Understanding a Distributor Agreement A distributor agreement is a legal contract that outlines the relationship between a distributor and multiple parties. It may be an agreement between different distributors, or an agreement between a distributor and manufacturer or vendor. Although distributor agreements vary, certain elements are constant. A distributor agreement will typically include the terms of the agreed contract; it will specify the length of the contract, and will include the named parties involved in the contract. Other things that may be included within a distributor agreement include a non-compete clause, terms outlining performance, marketing and trademark rights, and territory within which distributors can operate. Differences in Scope The primary difference between both agreements is the parties involved. A dealer agreement involves a distributor and a dealer, while a distributor agreement involves the manufacturing company and distributor. ![]() The scope of both agreements also varies. Distributors are often assigned territorial rights, which may stretch across one or several states, while dealers typically limit their operations to a local community. To secure a distributorship agreement, individuals may need to invest more than they would for a dealership. Distributorships also require sharper business and leadership skills. Working as a Dealer or Distributor A strong understanding of business practices is needed for either position. Individuals employed as dealers get to deal directly with the public, while distributors spend more of their time in contact with manufacturing companies. Working as a dealer requires less capital and typically involves a locally focused business format. Although a successful distributorship is more lucrative, it requires a lot more investment. Distributors also spend more time traveling than dealers.
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Март 2019
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