Drafting an IT Reseller Agreement – Delivery, Legal Title, Product Maintenance clause

An IT Reseller Agreement between a distributor and reseller should set out the terms on which the distributor’s software can be resold and how the products will be supplied to the client or reseller.

Delivery and Product Maintenance

When drafting your delivery and product maintenance clause, the most important consideration is the relationship between yourself, the reseller and the client. Does the reseller or the client download the product? Whomever receives the product usually accepts the risks in relation to the use and storage of the product, and legal title in the product will typically pass from the distributor to that particular person or entity.

It is important to consider that a software product, if different to a physical product being sent, cannot be internally inspected, and it may take some time for issues with the software to be identified. For example, it may not work in certain environments or systems. The distributor should notify the reseller of the environments and systems that support the particular software to ensure that they use the appropriate systems so it works properly. The risk arising out of the use or storage of the product will remain with the reseller once the product is received. You should ensure that the reseller takes responsibility for the product once the product is downloaded, and that they are responsible for any infections, contaminations or damage to their computer, system or network. The reseller should have in place its own protections for the software. You can then have an open dialogue with the reseller if any bugs or issues are reported with the software that were not originally identified by the distributor. The distributor should not be responsible or liable for delays, inaccuracies, errors or omissions arising out of the reseller’s use of the software or any third party software or operating systems.

Indeminities

As a distributor, you should also include a number indemnities in relation to the product after it is downloaded so that the reseller indemnifies you from and against, any loss of and/or damage caused to the software after the software is downloaded by the reseller. The reseller should have no right of action against you in respect of any loss occurring to them by reason of any delay in downloading the software caused by delays in transmission, technical delays or any other issues which are beyond your control. You should also include a force majeure clause in your agreement to protect you in case you are not able to meet your obligations due to a large event outside of your control occurring.

Conclusion

Having a well drafted and thorough IT Reseller Agreement in place reduces the chance of disputes and can help resolve issues between distributors and resellers quickly. If you would like us to draft an IT Reseller Agreement or would like to learn more about IT Reseller Agreements for your business, contact LegalVision on 1300 544 755 and speak with our Client Care team.