Reading time: 3 minutes

Your IT Reseller Agreement is an important document between yourself as a distributor and your reseller. It should set out the terms of the relationship and the terms on which the software can be resold. It is also important to have a strong and well drafted termination clause which addresses how the agreement can be terminated and the reasons that each party can terminate. Usually the agreement will commence on the date the agreement is executed and will then be valid for the term set out in the IT Reseller Agreement, and continue unless it is terminated by either party in accordance with the IT Reseller Agreement. This makes the process of terminating the relationship clearer and less confusing for each party.

Termination Clause

This clause will usually identify reasons that the party can immediately terminate the agreement. In addition, it identifies reasons that the parties can terminate with notice. The notice period is typically between 1-3 months. Events where the party can immediately terminate the IT Reseller Agreement are described as “events of default”. These can include, if the reseller does not pay fees that are due, when and if either party makes any untrue or misleading representation, warranty or statement, if any party’s financial situations change such that a party is not able to perform its obligations under the agreement, or lastly, when a party becomes bankrupt or the business is wound up. If you are the distributor, you should make sure to include a clause which allows you to terminate the agreement if you decide to stop selling the product or if the product is withdrawn from sale for another reason. It is also important to include a number of obligations on the reseller upon terminating the agreement. This will assist in the process of termination and the process of ending the relationship between the contracting parties.

Usually the clause may provide that, upon termination of this agreement, the reseller will immediately stop selling the software and cease making any representation that the reseller is an authorised or licensed reseller of the software, will immediately stop placing orders for the software, will immediately return to the distributor the distributor’s property, including confidential information, any marketing material provided and pay to the distributor any amount owed under the agreement, including in respect of any indemnities provided under the agreement.

Upon termination of this agreement, the reseller will be required to pay the distributor any outstanding amounts for software that the reseller has sold. Any rights, obligations and remedies of the parties set out in the agreement are not affected by the termination of the agreement.


As a distributor, if you don’t know how to go about drafting your IT Reseller Agreement, you should speak with a qualified, experienced business lawyer, preferably one with experience with drafting IT Reseller Agreements. At LegalVision we work with software developers on a regular basis and can assist with you legal issues related to running your business and reselling software. So if you’re in need of legal advice, contact us on 1300 544 755 and speak with one of our business lawyers.


New Kid on the Blockchain: Understanding the Proposed Laws for Crypto, NFT and Blockchain Projects

Wednesday 25 May | 10:00 - 10:45am

If you operate in the crypto space, ensure you understand the Federal Government’s proposed licensing and regulation changes. Register today for our free webinar.
Register Now

How to Expand Your Business Into a Franchise

Thursday 26 May | 11:00 - 11:45am

Drive rapid growth in your business by turning it into a franchise. To learn how, join our free webinar. Register today.
Register Now

Day in Court: What Happens When Your Business Goes to Court

Thursday 2 June | 11:00 - 11:45am

If your business is going to court, then you need to understand the process. Our free webinar will explain.
Register Now

How to Manage a Construction Dispute

Thursday 9 June | 11:00 - 11:45am

Protect your construction firm from disputes. To understand how, join our free webinar.
Register Now

Startup Financing: Venture Debt 101

Thursday 23 June | 11:00 - 11:45am

Learn how venture debt can help take your startup to the next level. Register for our free webinar today.
Register Now

About LegalVision: LegalVision is a commercial law firm that provides businesses with affordable and ongoing legal assistance through our industry-first membership.

By becoming a member, you'll have an experienced legal team ready to answer your questions, draft and review your contracts, and resolve your disputes. All the legal assistance your business needs, for a low monthly fee.

Learn more about our membership

Need Legal Help? Submit an Enquiry

If you would like to get in touch with our team and learn more about how our membership can help your business, fill out the form below.

Our Awards

  • 2020 Innovation Award 2020 Excellence in Technology & Innovation Finalist – Australasian Law Awards
  • 2020 Employer of Choice Award 2020 Employer of Choice Winner – Australasian Lawyer
  • 2020 Financial Times Award 2021 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review
  • 2021 Law Firm of the Year Award 2021 Law Firm of the Year - Australasian Law Awards
  • 2019 Most Innovative Firm - Australasian Lawyer