Reseller Agreement
Template — South Africa

Formally appoints the reseller and defines the geographic territory or market segment within which they are authorised to market and sell the supplier's products. Specifies whether the appointment is exclusive or non-exclusive, the supplier's right to sell directly within the territory (often reserved even in exclusive arrangements), the conditions for maintaining exclusivity (typically tied to meeting minimum purchase targets), and provisions for territory expansion, reduction, or reallocation based on performance. The territory provisions are structured to comply with Section 5(1) of the Competition Act, avoiding vertical restraints that substantially prevent or lessen competition.

Establishes the wholesale pricing structure — including base prices, volume-based discount tiers, early payment discounts, and promotional pricing. Critically, this section addresses the Competition Act's prohibition on resale price maintenance (RPM) under Section 5(2) by using recommended resale pricing (RRP) language only. The supplier may suggest a recommended price and set a maximum resale price, but must not dictate, enforce, or incentivise a minimum resale price. The section also addresses price change notification periods (typically 30 to 60 days), the treatment of VAT and import duties, and currency exchange provisions for imported products.

Sets annual or quarterly minimum purchase quantities or values that the reseller must meet to maintain the agreement and, where applicable, territorial exclusivity. The section defines how targets are set and adjusted (typically by mutual agreement based on market conditions, with an escalation mechanism for disagreements), the consequences of consistently failing to meet minimums (loss of exclusivity, territory reduction, increased pricing, or termination), and the treatment of force majeure events that may prevent target achievement. Performance reviews are typically conducted quarterly with annual target resets.

Governs the practical mechanics of the reseller relationship — purchase order procedures, minimum order quantities, lead times, delivery terms (using Incoterms 2020 for clarity), shipping and insurance responsibilities, risk of loss during transit, the inspection and acceptance process, and procedures for defective or non-conforming products. The section also addresses the reseller's right to return unsold stock (if any), the supplier's obligations regarding packaging and labelling under CPA requirements, and the treatment of stock shortages or supply chain disruptions.

Grants the reseller a limited, non-exclusive, non-transferable licence to use the supplier's trademarks, trade names, logos, and marketing materials solely for the purpose of marketing and reselling the products within the defined territory. The licence includes quality control provisions to protect brand integrity (required under the Trade Marks Act 194 of 1993), restrictions on modifying or creating derivative works from the supplier's IP, approval processes for reseller-created marketing materials, and the obligation to cease all IP usage within a specified period (typically 30 days) after termination. The section also addresses the reseller's obligation to report any trademark infringement they become aware of.

Specifies the supplier's obligation to provide product training, sales enablement materials, technical documentation, and ongoing support — and the reseller's corresponding obligation to maintain trained and certified staff, attend product update sessions, and achieve any certification requirements within specified timeframes. For technical products, the section may require the reseller to maintain a minimum number of certified technicians or consultants. Training costs, travel expenses, and the frequency of training updates are addressed to prevent disputes.

Addresses the CPA's strict product liability regime under Section 61, which holds every party in the supply chain — including the reseller — jointly and severally liable for harm caused by defective products. The section defines the manufacturer's warranty terms, the reseller's obligations in handling warranty claims from end customers (including the CPA's Section 56 requirement to offer repair, replacement, or refund within 6 months for defective goods), product recall procedures, and the allocation of product liability costs between supplier and reseller. Insurance requirements — including product liability insurance — are specified with minimum coverage amounts.

Dedicated provisions ensuring the reseller relationship complies with the Competition Act 89 of 1998. Addresses the prohibition on resale price maintenance (Section 5(2)), the treatment of exclusive dealing arrangements (Section 5(1)), the restriction on market division through territorial allocation, and the prohibition on exchanging competitively sensitive information between the supplier and competing resellers. The section includes compliance training requirements and reporting obligations for potential competition law concerns. It also addresses the Competition Commission's leniency policy for self-reporting contraventions.

Defines the ownership and handling of end-customer data generated through the reseller's sales activities. Where the supplier requires access to end-customer information (for warranty registration, product recalls, or marketing purposes), POPIA compliance requires a clear framework for data sharing, consent, and processing purposes. The section establishes whether the reseller is an independent "responsible party" or an "operator" under POPIA for specific data processing activities, and addresses data breach notification, data subject request handling, and the return or deletion of customer data upon termination.

Specifies the agreement duration (fixed term with renewal or rolling with notice), performance review frequency and criteria, renewal conditions, termination for convenience (typically 60 to 90 days' notice), and termination for cause (material breach, failure to meet minimums, insolvency, change of control, reputational damage, or competition law contravention). The critical post-termination provisions address: the reseller's right to sell remaining stock during a sell-off period (typically 60 to 90 days at agreed pricing), the supplier's option to repurchase unsold stock, the phase-out of trademark usage, and the treatment of outstanding orders and warranties.

Allocates liability and indemnification obligations between the parties. The supplier typically indemnifies the reseller for product defect claims and IP infringement claims, while the reseller indemnifies the supplier for claims arising from the reseller's sales practices, CPA non-compliance, and unauthorised representations. The section includes liability caps (often expressed as a multiple of the annual purchase value), exclusions of indirect and consequential damages, and minimum insurance requirements for both parties — including product liability, professional indemnity, and public liability insurance.

Establishes that the agreement is governed by the laws of the Republic of South Africa and provides a structured dispute resolution process. The template provides for negotiation between senior management as the first step, followed by mediation under AFSA rules, and binding arbitration for unresolved disputes. Given the commercial nature of reseller relationships, arbitration is preferred over litigation for its confidentiality, speed, and the ability to appoint arbitrators with industry expertise. Provisions for urgent interim relief (such as an interdict to prevent the unauthorised use of trademarks) are preserved.