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Legal aspects of the dealer contract

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Ланткевич Кирило
Lawyer
Ukraine / Dnepropetrovsk region

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Publication date: 05.03.2024

I am studying in the third year of the State University of Economics and Technology.I specialize in contractual, economic and corporate law, in particular, I provide consultations and write articles.

The current legislation makes it possible for participants in legal relations to enter into those agreements that, although not provided for by it, do not contradict it. One of these is a dealer agreement, which is an agreement according to which one party (supplier) supplies goods to the other party, that is, the dealer, and he, in turn, undertakes to carry out the subsequent resale of such goods to direct consumers in the territory and at prices that are established in the contract. Both parties receive certain benefits from concluding such an agreement, because the supplier opens up new sales markets for his business, ensures advertising of his goods in certain regions, as well as the possibility of receiving payment for the goods immediately after delivery to the dealer. In turn, the dealer himself receives a certain independence in business and the opportunity to use the reputation of the supplier to promote the product.
Analysis of the features of the dealer agreement:
First, we should note the features of this agreement, namely: consensuality (the agreement will be considered concluded from the moment agreement is reached on all its essential terms), compensation (the supplier receives payment for the goods), bilaterality, that is, the emergence of a certain amount of rights and obligations on both sides, alleatory. Also, such an agreement should be considered fiduciary, that is, based on the trust of the parties. The content of the contract is its terms, and the success of the relationship between its parties will depend on how legally correct and expedient they are formulated and set out in the contract. Dealer agreements mainly indicate: a condition on the subject (a product with its qualitative and quantitative characteristics), the procedure for receiving the goods by the dealer, the moment of ownership of such a product, the procedure for placing a purchase order, conditions on the pricing policy (pricing, payment terms) , as well as the procedure for returning goods if they are of inadequate quality, and the duration of the contract. In its legal essence, a dealer agreement is somewhat similar, for example, to a purchase and sale agreement, or a supply agreement, but at the same time it has such a feature as the emergence of a counter obligation of the dealer regarding the promotion of the goods that he received from the supplier. The parties to the dealer agreement are mainly business entities. Dealer agreement models require special attention, because there are several of them, namely: a direct supply system, based on a process in which retailers order goods through an association of participants, in turn, the association issues invoices for goods in retail trade. The system of general agreements is also quite widespread. Within this system, several dealers join forces by concluding a simple partnership agreement or another agreement, according to which, in order to satisfy the interests of the participants, the main organization will enter into agreements with suppliers for the supply of certain goods.
Procedure for concluding dealer agreements:
1. The first step is to develop a draft agreement, which must contain all the essential terms and most fully regulate the legal relations between the parties. The content of the agreement should not have provisions that would be subject to double interpretation, or violate the rights and interests of its parties, or put them at a disadvantage.
2. Next, you should send a proposal to conclude a contract to the counterparty in the form of an offer. The offer must contain the terms of the contract and express a proposal to conclude a contract, addressed to a specific person. It is equally important to indicate the deadline for responding to the proposal. The offer is sent both by mail and electronically.
3. The counterparty, having received the offer and having analyzed the conditions specified in it, draws up an acceptance as a response to the offer. The acceptance must be addressed specifically to the offeror and express full, unconditional consent to conclude the contract. Since the dealer agreement is consensual, after reaching agreement, it will be considered concluded.
The importance of lawyer's consultation when concluding contracts:
The services of a lawyer may be required both at the stage of developing a contract and in the process of bringing to justice one of the parties that does not fulfill contractual obligations. When developing a draft agreement, a lawyer will take into account the wishes of the parties and include in it all those conditions that will most effectively regulate the relationship between them, and will analysis of documents. So, verification of documents by a lawyer and, in general, legal support in the process of concluding an agreement will save time and money already at the stage of fulfilling its terms.

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