A production and distribution agreement is a business document drafted when two organizations enter into a business deal where in the parties agrees to produce products and distribute them on the behalf of another party.
The product would still continue to be under the brand name of the source party but the production and distribution activities will be taken care of by the other party. The agreement helps to give an understanding about the percentage in which the production cost and the profit and loss will be shared between both the parties.
The details usually mentioned in a production and distribution agreement are as follows:
- The business in which the source party is involved
- The exact production and distribution to be carried out by the other party and the procedure in which it has to be done
- The process in which the expenses will be shared
- The conditions under which the agreement can be terminated
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