Drafting an IT Reseller Agreement – Resale of the software and the relationship of the parties clause

Your IT Reseller Agreement addresses the obligations and rights of the reseller and distributor, how the software can be resold and should ideally set out in detail the nature of the relationship.

Resale of the Software

Most importantly, you should specifically address how the product will be resold and how your relationship will be defined. If you are the distributor of the product, then you should ensure that you set out how you would like the products to be resold. You should also include that you may provide to the reseller a list of minimum and maximum resale prices at which the software may be resold. However, how this can be set out is limited by the Australian Consumer Law (ACL) and this should also be addressed in your IT Reseller Agreement.

Usually you should set out that the reseller must, at all times during the agreement, offer for sale and sell the software according to the specifications supplied by the distributor to the reseller. As a distributor, this allows you to make changes to the way which the software is resold and gives you the control over the software that you have developed and created.

The reseller must not make any representation or give any warranty in respect of the software other than those contained in the distributor’s conditions of sale that are provided to the reseller. You may also want to include in the IT Reseller Agreement that the reseller must not alter, remove or in any way tamper with any of the distributor’s software code or other marks that are include within or in the packaging of the software, except that the reseller may indicate that they are the suppliers of the software and are an authorised reseller for the distributor. The reseller may also include their details on the product, so that the client can contact them if required. The distributor should still retain the right to direct the reseller to include or provide any particular text with the software in relation to this clause.

Relationship of the Parties Clause

It is also important to set out how the reseller can describe themselves when marketing or providing the product. Usually the reseller may describe itself as an authorised dealer or reseller of the software but must not describe themselves in any way as agents for the distributor. Usually the parties agree that the reseller is not agent of, or a partner with, the distributor. It is important to clarify the nature of the relationship, as there may be legal ramifications for describing the relationship improperly.

Conclusion 

As a distributor, it is important to have an IT Reseller Agreement that addresses how the software can be sold, and sets out how the relationship will be defined to prevent issues arising at a later stage. 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.