Drafting an IT Reseller Agreement – Engagement, Reseller and Distributor Relationship clause

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Table of Contents

• Engagement Clause
• Are you a Distributor?
• Conclusion

Reselling software is a good opportunity to sell your software to a greater number of people, and to have your product bundled with other software products. An IT Reseller Agreement should both set out the terms of the relationship between the contracting parties and establish how the software can be distributed. As a reseller, you should make sure that you are comfortable with the terms of the agreement and the way in which you are able to resell the software.

Engagement Clause

Depending on the nature of the relationship, the engagement clause should set out your relationship and how the products can be resold, for example, can the reseller bundle the product with other products. If they are required to only use the distributor’s particular marketing material, how are updates to the software provided and how will the distributor notify the reseller of changes to the software? You should also set out the term of the agreement, for example, will the term be for 1, 2 or 5 years?

This clause should also set out the relationship between the distributor, the reseller and the client receiving the products. For example, will you provide support to both the reseller and the client or just the reseller? Also, is the reseller required to have its own support in place? If you require the reseller to undertake training, this clause should also set out who will pay for the cost of training and detail the training that you will require the reseller to undertake to sell and promote the product.

Are you a Distributor?

As a distributor, you should set out how your software can be automatically updated without notice to the reseller or client (if your software is able to updated in this manner). This clause should allow the distributor to discretionarily make upgrades available to the reseller and the client. As a distributor, you should be able to make sure that the software is working properly and you should be able to update or upgrade the software as required. The reseller is typically the primary point of contact for clients and will usually have their own contractual relationship with each client under the reseller’s own terms. As a distributor, you should also consider whether you require the clients using the software to sign up your own terms. This document will set out how the software can be used by the client. You may also request that in using the product the client must also agree to your software terms and conditions (a separate document to your IT Reseller Agreement), which sets out the terms upon which the distributor will grant the client a right to use the software.

Conclusion

If you’re unsure how to go about drafting your IT Reseller Agreement or you are a reseller and would like us to draft a client or sales T&Cs, then you should speak with an experienced IT Lawyer, preferably one with experience drafting IT agreements. At LegalVision, we draft IT Reseller Agreement on a regular basis, so if you’re in need of legal advice, contact us on 1300 544 755 and speak with one of our experienced Client Care team.