Drafting an IT Reseller Agreement: Obligations and Warranties

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Table of Contents

• Who provides the warranty?
• With regards to Intellectual Property
• As a distributor
• As a reseller
• Conclusion

Your IT Reseller Agreement should set out each parties’ rights and obligations. It is important to include detailed obligations and warranties for a reseller so that as a distributor you can ensure that the reseller will comply with the directions you give. Having the obligations clear in the agreement will make it easier if the reseller breaches their obligations, in resolving disputes and terminating the agreement, if required.

Who provides the warranty?

Usually the reseller will be required to warrant that it has legal capacity, power and authority to enter into the IT Reseller Agreement, that they have no legal restrictions preventing them from selling the software, in selling the software they will act with due care and skill, they will comply with the distributor’s sales policies and pricing, they will comply with any reasonable directions given to it by the distributor from time to time, they will sell the software in the same condition it receives it without alteration or modification in any way, including to the software’s software code, they will act lawfully and will comply with any applicable laws and regulations in relation to selling the software.

With regards to Intellectual Property

The reseller should acknowledge and agree that the distributor owns all intellectual property rights in the software. When selling the software the reseller will acknowledge the distributor as the owner of the software and of any intellectual property rights in the software. It will also not represent itself as the manufacturer or owner of any intellectual property rights in the software.

In relation to marketing, the reseller usually agrees that they will seek approval in advance from the distributor in relation to all advertising and promotion of the software. They will usually follow the distributor’s directions and marketing materials provided regarding the software, will make no new or different statements or representations about the software, and will make no false or misleading representations about the software. A reseller will also agree that it is not aware of any actual or potential conflict of interest in it selling the software (unless otherwise agreed with the distributor) and will not sell any other goods of a similar type to the software or that compete with the software.

As a distributor

If you’re a distributor and would like the reseller to provide you with specific reports, notify you of sales or discounts or keep you up-to-date with certain outcomes, you should also include this in the warranties and obligations clause.

As a reseller

You should carefully review this clause to ensure that you are able to comply with requirements of the clause and ask to have the obligations of the distributor included. In this clause you should also address who will take responsibility for dealing with consumer complaints in relation to the software.

Conclusion

As a distributor, it is important to have an IT Reseller Agreement that addresses the reseller’s obligations, and warranties to prevent issues arising at a later stage. So if you’re in need of legal advice in regards to drafting an IT Reseller Agreement contact LegalVision on 1300 544 755 and speak with one of our experienced IT Lawyers.