What should a distribution agreement cover? A 12-clause checklist before signing with an overseas distributor (including trademark and product registration)

Short answer: A distribution agreement should spell out at least 12 things: products and territory, term, exclusivity thresholds, price, payment, delivery, inventory, reporting, trademark, product registration, termination, and disputes. The two most often missed in overseas distribution are trademark and product registration.

Scenario: the other side sends a three-page contract in English

This is a hypothetical scenario, not a story about a specific client.

Your company makes frozen dumplings. After two months of talks with a Philippine importer, it finally sends a contract. Three pages in English, covering price, payment, and a one-year term, with a final paragraph saying “both parties agree to resolve disputes through amicable negotiation.”

You search for a “distribution agreement template” and mostly find versions written for Taiwan's domestic market: resale prices, product liability, ownership of intellectual property. All of that is correct, but you notice that neither the three-page contract nor the Taiwanese templates mention two things: whose name holds the product registration, and who applies for your trademark in the Philippines.

Domestic distribution in Taiwan never needs these two things, but in overseas distribution they are the hardest to recover when the partnership ends. Below is a checklist you can tick off clause by clause before signing.

A 12-clause distribution agreement checklist

Below we explain the clauses most often written wrong.

Clause 3: exclusivity must come with a threshold

A public contract based on the International Chamber of Commerce (ICC) distributorship model separates “sales targets” from “agreed minimum sales”: missing a target is not a breach; if the agreed minimum is not met, the supplier may, on one month's notice, terminate the contract, cancel exclusivity, or reduce the territory ². Whether to grant exclusivity and whether to push stock onto the partner, we covered in agent, distributor, exclusive agent: what's the difference?.

Clauses 5 and 6: title to the goods and delivery terms

The same contract states that until payment is received in full, title to the goods remains with the supplier ². That sentence still gives you a basis for a claim if the other side cannot pay. For delivery terms, write one clear Incoterms rule and place; do not write just “CIF Philippines” without naming the port. For how the terms differ, see Jumping's Incoterms trade terms guide.

Clauses 9 and 10: the two most often missed in overseas distribution

Trademark. In the Philippines, trademark rights come from registration ⁵. The ICC-based contract states that the distributor may not register the supplier's trademarks or confusingly similar marks, and must stop using them after termination ². But a contract can only stop the other side from filing first; you still have to apply for the trademark in the Philippines yourself. For the three rules to watch when applying, see your Philippine product registration is still pending: three things you can do in the meantime.

Product registration. A Philippine food CPR is held by a local business holding an LTO; transferring a registered product to a new holder requires a transfer agreement between the original holder and the new holder ⁴. In other words, switching distributors needs the old distributor's signature. At a minimum the contract should state: copies of the registration file belong to you, the other side must cooperate with a transfer on termination, and who pays the transfer costs.

If your contract does not mention these two things at all, add them before you sign.

Clause 11: termination and after termination

The U.S. Commerce Department's country commercial guide for the Philippines notes that local agency and distribution contracts usually specify 30 days' termination notice ³. The ICC-based contract has several designs worth borrowing: immediate termination for material breach; after termination, the distributor may choose to have the supplier buy back new stock on hand at the original price; and promotional materials must be returned after termination ².

In the Philippines, the hardest part after termination is usually not the stock but the registration in clause 10. Read these two clauses together.

Clause 12: do not write only “amicable negotiation”

The ICC-based contract refers disputes to the ICC Rules of Arbitration ². You do not have to use the same wording, but you must state: which country's law applies, where disputes are resolved, and in what language. Writing only “amicable negotiation” means nothing is agreed when a real dispute arises. Ask a lawyer to decide this clause based on your situation.

Also, the resale-price clause common in Taiwanese templates is written under Article 19 of Taiwan's Fair Trade Act: an enterprise may not restrict the price at which its trading counterparts resell its goods, unless there is a justifiable reason ⁶. For the price clause in an overseas distribution agreement, ask a local lawyer to review the Philippine rules as well, rather than copying the Taiwanese clause directly.

When we do not recommend following this article

• The other side is a large retail chain. A chain negotiates a listing agreement, which has a different clause structure.
• You are looking for an agent, not a distributor. An agent does not buy the goods and earns commission, so the contract focuses on commission and scope of authority, and some clauses do not apply.
• The contract value is large, or it involves building a local factory or a joint venture. This checklist is not enough; have a lawyer draft from scratch.
• You are not yet sure anyone locally wants to buy. However well the contract is negotiated, it is useless without sales. Do a market probe first: NT$10,000–20,000, and you can stop when it is done.

Frequently asked questions

What should a distribution agreement cover? At least 12 things: products and territory, term, exclusivity and minimum sales, price, payment, delivery terms, inventory, reporting, trademark, product registration, termination, and governing law and disputes ¹². The two most often missed in overseas distribution are trademark and product registration.

What is the difference between a distributor and an agent? It depends on who owns the goods. A distributor buys from you outright and holds inventory; an agent does not stock goods, customers order directly from you, and the agent earns commission ³. The contracts therefore focus on different things: a distribution agreement covers inventory and price, and an agency agreement covers commission.

Can I use a distribution agreement template as is? Use it as a checklist, but we do not recommend signing it as is. Taiwanese templates are written for domestic distribution and usually have no clauses on product registration or overseas trademarks; the ICC international distributorship model ¹ has a more complete structure but still has to be adapted to local rules.

One minimal next step

Open the contract the other side sent and tick it off clause by clause against the table above. The clauses you cannot tick are the questions for your next reply. If there is a clause you do not understand, send us one question on LINE.

This article is a summary of experience and practice, not legal advice; have a lawyer review the contract before signing. Last verified: 2026-10-11.