The Contiguous Market Ownership Areas Formation Agreement is one that is entered into between two companies for the purpose of developing distribution network. The agreement details out the terms by one company to the other regarding the conditions that needs to be fulfilled for assigning new distributors by keeping in mind the existing distributors in a specific area.
The agreement sets out the clauses for acquisition of new dealers in the areas specified by the company hiring another company for acquiring distributorship. The agreement specifies that the existing dealer relationship with the parent company will not be changed in any manner and the applicability of this agreement to only new dealers. The agreement specifies the areas that are covered for dealership along with qualifications that are necessary for assigning distributorship of the parent company. It also specifies the price details, commitments between the parties and the background of the existing dealers for transferring dealership rights.
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