Reviewing the starter dealer agreement before use
Why a manufacturer must review the Manufacturing pack's starter dealer agreement before use, which terms to check, and how signed versions are kept.
By Achekam · · 4 min read · For Manufacturing businesses in South Africa, Nigeria, Kenya
Launching soon. The Industry CRM add-on described in this article is launching soon. This article describes it as it will work at launch.
A dealer agreement looks like paperwork until the relationship goes wrong. A dealer starts selling a competitor's range in the territory you thought was exclusive. A dealer goes into business rescue holding a warehouse of your stock that was never paid for. A dealer's customer claims under warranty, and nobody can agree whether the dealer or the factory should have handled it. In each case, the first question is what the signed agreement says.
The Industry CRM's Manufacturing & distribution pack includes a starter dealer agreement, signed electronically as part of onboarding a new dealer. Can you use it as it is? No. This article explains why, which terms to review before the first dealer signs, how the agreement fits with the credit terms you approve, and how signed versions are kept.
Starter wording, not legal advice
Every contract or agreement in the Industry CRM's packs is marked as starter wording that the business must review before use. The packs set the words the screens use, the record types, pipelines, workflows, document requests, documents to sign, reminders, catalogue, ledger accounts and home-page counts for each industry, so the dealer agreement arrives as part of a working onboarding flow. That convenience is not the same as advice.
The wording gives you a structure and the subjects a manufacturer usually needs to cover. It cannot know your products, your channel strategy, the countries your dealers trade in, or the law that applies to them. Treat it as a well-organised first draft for your lawyer.
Terms to check before first use
Read every clause, and give these particular attention:
| Term | Questions to settle |
|---|---|
| Appointment and territory | Is the dealer exclusive anywhere? Can you appoint others nearby? |
| Products covered | Which ranges; how are new products added or old ones withdrawn? |
| Pricing and rebates | Which price list applies, how changes are notified, and how rebates are earned |
| Orders and delivery | How orders are placed and confirmed; who carries risk in transit |
| Ownership of goods | Do you keep ownership until the goods are paid for? |
| Warranty and returns | Who receives claims, what evidence is needed, who decides |
| Marketing and brand use | How the dealer may use your name and logos |
| Minimum purchases or targets | What happens if they are missed |
| Term, review and termination | Notice periods, and what happens to the dealer's stock at the end |
| Governing law and disputes | Which country's law, and how disputes are settled |
Pricing, territory and resale terms can raise competition-law questions in South Africa, Nigeria and Kenya. Your lawyer should check those clauses for each country where you appoint dealers.
The warranty clause deserves extra thought because the pack itself keeps Warranty claims with serial numbers alongside Dealer accounts and Quote requests. Make the agreement describe the same process your team will follow: who logs the claim, what the dealer must send, and who decides the outcome.
Matching the agreement to approved credit terms
The pack onboards a dealer with a credit application request, a credit limit and payment terms that a person approves, and a dealer agreement signed electronically. Those two halves must say the same thing. An agreement promising terms your credit approver never granted, or silent on what happens when a dealer exceeds its limit, will be quoted back at you in the first dispute.
Before a dealer signs, check:
- the payment terms in the agreement match the approved terms on the dealer's account;
- the agreement allows you to stop supply or put the account on hold when it is overdue or over its limit;
- interest or charges on late payment, if any, are stated clearly;
- the credit limit is not written into the agreement in a way that requires an amendment every time you change it.
Investopedia's explanation of credit control covers managing the credit a business extends to customers so it supports sales while limiting bad debts, which is the balance your dealer terms are trying to strike. The onboarding and credit side is covered in onboarding a dealer with a credit application.
Signing electronically
Once reviewed, the agreement goes to the dealer for electronic signature. Achekam can send a document for signing with signature and initials fields placed on it, signers in order or all at once, an expiry and reminders. Signers in order works well for a dealer agreement: the dealer's authorised signatory first, then your own director.
Make sure the person signing for the dealer has authority to bind the business. Ask for a resolution or a letter of authority for larger dealers, and keep it with the agreement.
Keeping signed versions
When everyone has signed, the signed PDF and a completion certificate are filed back into Documents. Document Centre keeps files in folders, can tag and search them, and keeps earlier versions when a new version is uploaded.
Good habits for dealer agreements:
- Version the template. Give each reviewed version of your dealer agreement a date, and record which version each dealer signed.
- One folder per dealer. The signed agreement, the certificate, any amendments and the authority to sign belong together.
- Amend in writing. A change agreed by e-mail is a dispute waiting to happen; send a signed amendment instead.
- Review on a cycle. Agreements age as your range and prices change; plan a periodic review of every active dealer's agreement.
Once a dealer is signed, quotes for configured products follow the path in configured quotes to signed orders.
Before the first dealer signs
Send the starter agreement to your lawyer with a short note on your channel strategy, territories and credit policy. Adjust it, align its payment clause with your approved credit terms, record the approved version, and only then switch on electronic signing for new dealers.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
