This document is essential for businesses seeking to establish controlled distribution channels or representation in specific territories. An Exclusive Representation Agreement, governed by Hong Kong law, is commonly used when a company (the principal) wants to grant exclusive rights to another entity to represent, sell, or distribute their products or services in a defined area. The agreement encompasses crucial elements such as territory definitions, commission structures, performance metrics, and protection mechanisms for both parties. It's particularly relevant for international trade relationships, especially in Asia-Pacific markets, where Hong Kong's robust legal framework provides a reliable governing law choice. The document must comply with Hong Kong's competition law requirements while protecting the principal's interests and providing adequate business opportunities for the representative.
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1. Parties: Identification and details of the principal and the exclusive representative
2. Background: Context of the agreement and brief description of the parties' business relationship
3. Definitions: Key terms used throughout the agreement, including territory, products/services, and exclusivity period
4. Appointment and Scope: Terms of exclusive appointment, territory coverage, and scope of representation
5. Duration and Renewal: Term of the agreement, including commencement date, initial period, and renewal provisions
6. Rights and Obligations of Representative: Detailed responsibilities, performance standards, and reporting requirements
7. Rights and Obligations of Principal: Support to be provided, information sharing, and maintenance of product/service standards
8. Exclusivity Terms: Specific provisions regarding the exclusive nature of the representation and any exceptions
9. Commission Structure: Detailed compensation terms, calculation methods, and payment schedule
10. Intellectual Property Rights: Usage rights for trademarks, logos, and other IP during the representation
11. Confidentiality: Protection of confidential information and trade secrets
12. Termination: Grounds for termination, notice requirements, and consequences
13. Post-Termination Obligations: Obligations surviving termination, including confidentiality and non-compete
14. General Provisions: Standard clauses including notices, entire agreement, governing law, and jurisdiction
1. Non-Compete Clause: Restrictions on competitive activities during and after the agreement, optional depending on business needs and jurisdiction
2. Minimum Performance Requirements: Specific sales targets or performance metrics, used when quantifiable goals are necessary
3. Sub-Representatives: Terms for appointing sub-representatives, if allowed
4. Insurance Requirements: Specific insurance coverage requirements, important for high-risk industries
5. Marketing and Promotion: Specific obligations regarding marketing activities and cost sharing
6. Training Requirements: Provisions for training and certification if required for the representation
7. Force Majeure: Provisions for unforeseen circumstances, particularly relevant in international agreements
8. Data Protection: Specific provisions for handling personal data, required if personal data processing is involved
9. Dispute Resolution: Alternative dispute resolution mechanisms like mediation or arbitration
1. Schedule 1 - Territory Definition: Detailed description of the geographic territory covered by the exclusive representation
2. Schedule 2 - Products/Services: Comprehensive list of products or services covered under the agreement
3. Schedule 3 - Commission Rates: Detailed commission structure, including any variations based on product type or volume
4. Schedule 4 - Performance Metrics: Specific KPIs and measurement criteria for evaluating representative's performance
5. Schedule 5 - Approved Sub-Representatives: List of pre-approved sub-representatives if applicable
6. Appendix A - Trademark Usage Guidelines: Guidelines for using principal's trademarks and branding
7. Appendix B - Reporting Templates: Standard templates for regular performance and sales reporting
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