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A Value Added Reseller Agreement sets out the terms under which a company can buy, modify, and resell another company's products or services. In South Africa, these agreements typically cover how resellers can add features, integrate systems, or bundle products to create enhanced offerings for their customers.

The agreement protects both parties under South African contract law by spelling out essential details like pricing structures, intellectual property rights, and service level requirements. It also addresses key issues like BEE compliance, territorial restrictions, and the reseller's obligations around product warranties and after-sales support - crucial elements for doing business in the South African market.

Use a Value Added Reseller Agreement when you're planning to enhance and resell another company's products or services in South Africa. This is especially important for tech companies adding custom features to existing software, manufacturers incorporating components into larger systems, or distributors bundling products with additional services.

The agreement becomes essential before starting any value-added distribution activities, particularly when dealing with intellectual property rights, BEE compliance requirements, or complex pricing structures. It's crucial for businesses expanding their product offerings through modification or integration of third-party solutions, helping prevent disputes over revenue sharing, customer ownership, and support responsibilities.

• Software License Reseller Agreement: Specialized for software distribution, covering license management, version control, and technical support requirements. Value Added Reseller Agreements also commonly appear as hardware resale agreements (focusing on physical product modifications), service enhancement agreements (for bundled professional services), and distribution-focused agreements (emphasizing territory rights and market restrictions). Cloud service agreements are becoming increasingly popular, addressing hosting, data protection, and SLA requirements.

• Original Manufacturers: Companies who create products and want to expand their market reach through Value Added Reseller partnerships. They set core pricing, product specifications, and brand guidelines.
• Value Added Resellers: Businesses that enhance and redistribute products, often tech companies or systems integrators who customize solutions for specific markets.
• Legal Teams: Corporate lawyers who draft and review agreements to ensure BEE compliance, protect intellectual property rights, and align with South African competition law.
• Compliance Officers: Professionals who monitor adherence to resale terms, territory restrictions, and regulatory requirements in both organizations.

• Product Details: Document exact specifications, pricing structures, and any technical requirements for customization or integration.
• Territory Rights: Map out geographical boundaries and any exclusive distribution zones under South African competition laws.
• BEE Compliance: Gather current BEE certificates and verify compliance levels for both parties.
• Service Levels: Define support responsibilities, response times, and maintenance obligations.
• IP Protection: List all intellectual property elements requiring protection and usage rights.
• Revenue Model: Outline commission structures, payment terms, and minimum performance requirements.

• Party Details: Full legal names, registration numbers, and physical addresses of both manufacturer and reseller, including BEE status.
• Product Scope: Detailed description of products, permitted modifications, and territory restrictions.
• Commercial Terms: Pricing structures, payment terms, minimum purchase requirements, and commission rates.
• IP Rights: Clear outline of trademark usage, modification rights, and ownership of customizations.
• Compliance Clauses: POPIA data protection requirements, Consumer Protection Act obligations, and competition law adherence.
• Termination Terms: Notice periods, breach remedies, and post-termination obligations under South African contract law.

A Value Added Reseller Agreement differs significantly from a Broker Agreement in both scope and operational focus. While both involve intermediaries in sales processes, their roles and responsibilities are quite distinct in South African business law.

• Value Addition: VARs actively modify or enhance products before resale, while brokers simply connect buyers and sellers without altering the product.
• Investment Structure: VARs purchase inventory and maintain their own pricing structures, whereas brokers typically earn commissions without taking ownership of products.
• Legal Obligations: VARs carry more extensive responsibilities under consumer protection laws, including product warranties and after-sales support. Brokers mainly have disclosure and fiduciary duties.
• Intellectual Property: VAR agreements must address modification rights and new IP creation, while broker agreements focus on confidentiality and client protection.