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How to eSign a document: eSignature legitimacy for Distributor Agreement in Canada

have you found a really great product overseas to sell here in Canada and you're wondering how to do that in a way that you and your rights to distribute and sell this product are protected perhaps you're already in talks with the company that produces something really special overseas or maybe you just now got your eye on a product and you'd like to enter into conversations with that international party to be able to bring their product right here in Canada well if you find yourself in any of these scenarios and curious to learn more about how to be legally protected in this setting in this type of transaction keep on watching because today's video discusses arguably the most relevant contract or agreement that has to do with this scenario and that's called a distribution agreement my name is Pam matani I'm a business lawyer and the founder here at graphene business law where we're able to serve clients virtually throughout Ontario Canada now I don't know if it's the dreams that the New Year Burns about and the hopes and aspirations of business and starting a business but here at graphene we've noticed a little bit of a spike in clients coming to us for distribution agreements and that of course inspired this video putting something together where more than just our clients can benefit from and specifically as pertains to the focus of this video is to provide some general information as to what the benefits of a distribution agreement are what sort of working relationship or business relationship is even captured by distribution agreement and what are some of the sections we most often see in distribution agreements now this video of course is not legal advice you should seek out a legal professional to put together a strong distribution agreement for you however what this video can do is educate you and inform you and make sure that when you do go speak to a lawyer including us here at graphene business law you had the ground running in that conversation about how to protect your distribution rights and how to draft the best distribution agreement for you now distribution agreements in theory are one of our favorite agreements here graphene and I'll just say as a side note a distribution agreement is the first legal document I ever worked on in my life specifically that was in the context of when I was an intern in law school I started my my legal career if you will in North America's largest Entertainment Company interning in-house there and distribution agreements were key to the preserving the rights and the IP and the Special Sauce that went on with the films and TV shows and everything going on at this mega mega company so distribution agreements always have a you know have a good spot in my heart and when it comes to business like I mentioned they are something that we like here at graphene and that's because in theory a distribution agreement captures a really nice business business picture in that if done right you know or or in spirit a distribution agreement is one that's capturing a relationship where both parties are benefiting right and there can be distribution agreements by the way that we can help you draft if you're the party bringing the product to Canada and distributing it here we can help draft an agreement that best protects your rights as the distributor and there are distribution agreements of course that would best protect that can be worded in a way to best protect the party that has that special sauce of a product somewhere overseas and they're looking to partner up with someone here in in Canada or in Ontario as well so there are given that there's different parties to the agreement there are different ways that agreement can be worded to most benefit a certain party however excuse me in theory this is a relationship where both parties are benefiting and what do I mean by that well the party overseas that has come up with this Special Sauce of a product and we've seen these products run the gamut they can be truly anything and I'm always amazed by the products captured in the distribution agreements it can be something you know hair thin needle thin or it can be a really big product like bikes and car parts and this and that there is such a richness to what a distribution agreement can capture that being said the party overseas might not want to go through the headache of physically breaking into a new market themselves but they have nonetheless identified that selling their product in a market like Ontario Canada would be something really beneficial to their bottom line they think a lot of clients here would like to use that product and so they do well for that reason now that party keeping this very big picture that producer that company that manufacturer for a lot of reasons might not want to do that work themselves so they tap on to somebody that can distribute the product here well what's in it for that distributor now nobody's forcing anybody to enter into these agreements right so arguably here for the distributor for thinking of somebody that thinks they found a special sauce of a product whether they've traveled overseas any continent Asia Africa Europe wherever they are they found something there that they see the market loves there and they're thinking to themselves I know people in in Ontario in my hometown of whatever Toronto Thunder Bay Timmins these all start with teeth for some reason I know people in my hometown that would love to use this product and I bet that if I can find a way to sell it there I'm gonna do really well because I know there's an interest and there the match is created right so there's something in it for both parties and that's what I meant that in spirit these are friendly agreements another reason if you've noticed in that setup of characters if you will both of these characters or parties are on the same side you as the distributor if you're here in Ontario are going to want to sell the crap out of this product why wouldn't you and at the same time the manufacturer is going to be cheering you on the whole time to sell the crap out of their product so you're both on the same team and seeing that same team approach in law is something that can sometimes be rare and it's really nice to see and that's what I meant I think I mentioned friendly type of agreement so many times now and hopefully you understand better why that being said we're still talking about a business agreement about a legal agreement where we want to make sure that our rights are legally protected to the max okay we want to make sure we have something strong we're signing off of something that you can't be taking advantage of and the reasons for these agreements going bad by the way could be as simple as cultural misunderstandings at the end of the day you're Distributing this product because it is from somewhere far away right and so it can be something as simple as cultural understandings or genuinely just you know a business deal with somebody out to screw you it all happens under the sun and um and we want to make sure where it's protected as we can be which is why here graphing business law we pride ourselves in the kind of work that we do on these agreements okay um and and um as pertains to what's included in these agreements some of the sections I want to touch on High level just to help you understand the first one shouldn't come as a surprise to anybody when you look at a distribution agreement the territory captured within it should be completely and utterly clear the whole reason we're getting into this agreement is so that you have that zone to yourself where you'll be selling the manufacturer's product okay and you'll be responsible for that zone and you're gonna want the highest rights possible for your rights to distribute in that zone so territory is something you should always have and very clearly outlined in a distribution agreement something else is timelines whenever I get clients calling me for they're interested in a distribution agreement I say well what period of time do you want this to have effect for again perhaps not surprising what do you think most clients say forever I don't want these rights forever now that might work with you know this business relationship with the product you have with the party you're Distributing the product of but it also might not so maybe this is a Time stamped you know five year ten year 20 year these are things that legally if you you know come to us here at graphene and become our client we would talk through these and the benefits of certain timelines for you and you know pitch our heart is to get you the timeline that most benefits you and your business pricing okay well it's one thing that this is a friendly agreement in so far as both parties are on the same side you're both cheering for the sale of the same product that's going to be true night and day when it comes to your distribution agreement however being careful about who you're getting into business with it might be the case that you know the threshold for sales that you're making for example that are set by the distributor might be you know they could be really Cutthroat and why would that be well the distributor at the end of the day although being part of this friendly agreement you know people are run by one thing and one thing lest I say only one thing first I'll say that unless they're self-interest so the distributor might not necessarily have picked you to distribute their product because you're their best buddy or their best friend they're looking for somebody that can sell the crap out of their product in any circumstance and if you fall be below certain selling thresholds they're gonna want to get a way out of that contract so that they can find somebody that can continue to sell their product and do it better than you did so you should be very well aware of what sales Provisions are in place in these contracts with pro at what price what pricing Provisions are are in place in these contracts okay I mentioned when I started my career these distribution agreements had a lot of Ip intellectual property rights that they were protecting that same Clause is going to ran true in the distribution agreements you should always look for the intellectual property provisions and you know have a clear understanding of what you're signing off on when it comes to the IP of a certain product the IP can go into the product itself sometimes it's all about the packaging it's all about you know what a product does when it's opened it's about you know the product what its capabilities are when it's sitting on a table it's about you know when the product is being played when it hums like the range is Limitless make sure you understand the IP of your product calf brick number two the last part I'll talk about and you know the term probably makes sense that I saved it for last it's termination ending how does this contract end there are some contracts that can end because one party breached or violated parts of the provisions there are contracts that can end you know if a party's going bankrupt or somebody dies or whatever may be the case there's a lot of reasons as to why a contract can come to its conclusion and you're going to want to make sure you know very well what those reasons are also you're going to want to make sure that when you do see that legal professional and draft your distribution agreement that you ask questions about what something would look like in practice having an agreement n because one party breached the agreement can be a segue for a really sneaky scenario what if somebody just doesn't want to do business with you anymore so they intentionally break the contract and now they're free of you but you might have been loving what you were doing you might even have been doing well at it might have found a way to make this distribution scenario you know profitable or lucrative for yourself so what does that leave for you you're going to want to make sure you understand all of the provisions we discussed in this video I stand you know I stand true and I stand by what I said at the beginning that distribution Agreements are one where they're friendly in spirit however these are still business agreements these are still business law agreements and when it comes to business and the law friendly is one thing but doing it right making sure we avoid you know legal repercussions but also business Devastation is a whole other thing right just because we're on the same team with somebody and we we're both having the same results in mind we want to make sure we protect ourselves first and foremost so that's why you always need to see a lawyer when it comes to Drafting and putting one of these in place I've seen sometimes clients come to me with distribution agreements at a party from overseas is giving them they'll say here's their template I strongly strongly recommend that you get legal advice for those templates that are being thrown at you if you're in that scenario it can seem like a good way to save a few dollars if somebody you know maybe quote unquote did all the work but if somebody's throwing you a free template from another country when it comes to protecting your rights in Ontario in Canada I would have a harder look so I'll leave this video there I'll land this video there thank you for watching you know graphing business law you can find us online graphingbusinesslaw.ca you can send us email inquiries info graphenebusinesslaw.ca as our slogan says it's all business all the time here in graphene business law and of course that includes having very strong distribution agreements in place for you and that product with Special Sauce that you've got your eyes on that you've got your eyes on and are looking to distribute so thank you for watching and we look forward to hearing from you