Creating a Winning Value Added Reseller Agreement (VAR)

Note: Want to skip the guide and go straight to the free templates? No problem - scroll to the bottom.
Also note: This is not legal advice.

Introduction

When it comes to protecting your business and successfully entering the world of reselling, a Value Added Reseller (VAR) agreement is essential. This legally binding contract, between a vendor and a reseller, outlines the terms of their relationship and serves to protect the interests of both parties involved. By setting out specific rights and obligations of each party, it allows for a clear understanding of expectations while preventing potential disputes - something which Genie AI’s open source legal template library seeks to provide guidance on.

Having a well-crafted VAR agreement in place is also beneficial in that it offers greater flexibility when it comes to how you sell products and services. Through this agreement you can tailor your approach to meet customer needs more effectively; for example by offering discounts or promotions or creating custom packages based on the vendor’s products. This provides an edge when competing in the market - an edge that Genie AI’s free templates can help give you access to today.

Finally, having a VAR agreement ensures that everyone gets their due compensation for their efforts. The agreement should be detailed enough to cover payment expectations plus description of services provided so everyone remains confident about what they are entitled too - something which our step-by-step guidance can help walk you through today with no need for a Genie AI account either! So if you’re looking at entering the world of reselling there really is no substitute for getting your VAR agreement right: here at Genie AI we want nothing more than to help make sure it stays that way!

Definitions (feel free to skip)

Agreement: A legally binding document outlining an arrangement between two or more parties.
Scope: The range of coverage of a particular contract or agreement.
Deliverables: The goods or services that will be provided as part of a contract.
Reseller: A company that buys goods from a manufacturer or wholesaler and then resells them to customers.
VAR Agreement: A contract between a vendor and a reseller that outlines the terms and conditions of the reseller’s access to the vendor’s products and services.
Discount Structure: The terms and conditions of discounts offered by a vendor to a reseller.
Reseller Program: A program set up by a vendor to allow resellers to purchase goods at a lower cost than the general public.
Rights to Market and Sell Products: The terms and conditions of a VAR agreement that allow a reseller to advertise and sell the vendor’s products.
Delivery Terms: The rules and regulations governing the delivery of goods and services.
Return and Cancellation Policy: The terms and conditions of a VAR agreement that outlines the process for returning or cancelling products.
Warranties: A guarantee or promise from a manufacturer to repair or replace a product if it fails to meet certain standards.
Customer Service and Support: The services provided by a vendor to assist customers with using or troubleshooting products.
Restrictions on Use and Resale: The terms and conditions of a VAR agreement that outlines the restrictions on how the reseller may use or resell the product.
Pricing and Promotions: The terms and conditions of a VAR agreement that outlines the pricing and promotional strategies of the reseller.
Intellectual Property Rights: The legal rights granted to the creator of an original work, such as a copyrighted work, a patent, or a trademark.
Compliance Strategy: A plan of action designed to ensure that an organization is adhering to the applicable laws and regulations.

Contents

• Understanding the Requirements of the Agreement
• Analyzing the scope of the agreement
• Determining the specific deliverables
• Assessing the timeframe of the agreement
• Identifying the Benefits of a VAR Agreement
• Identifying the potential cost savings
• Assessing the increased revenue opportunities
• Analyzing the marketing and promotional benefits
• Establishing a Reseller Program
• Setting the rules for reseller participation
• Determining the discount structure
• Establishing the reseller training requirements
• Determining the Rights and Obligations of Each Party
• Establishing the rights to market and sell products
• Defining the terms of payment and delivery
• Establishing the enforcement of the agreement
• Defining Terms of Payment and Delivery
• Establishing the payment terms
• Identifying the delivery terms and process
• Establishing the return and cancellation policy
• Establishing Appropriate Warranties and Support
• Assessing the level of product warranties
• Setting the parameters for customer service and support
• Establishing Restrictions on Use and Resale
• Analyzing the restrictions on use and resale
• Determining the restrictions on pricing and promotions
• Setting the parameters for customer service and support
• Crafting a Successful Reseller Agreement
• Drafting the agreement
• Reviewing the agreement with legal counsel
• Negotiating the terms of the agreement
• Identifying and Protecting Intellectual Property Rights
• Identifying the intellectual property rights of each party
• Establishing the parameters for use and protection
• Developing a strategy for enforcement
• Understanding the Legal Aspects of VAR Agreements
• Researching the applicable laws and regulations
• Assessing the potential legal risks
• Developing a compliance strategy

Get started

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FAQ:

Q: What is the difference between a VAR agreement and a reseller agreement?

Asked by Michael on April 28th, 2022.
A: A reseller agreement is a contract between two parties with the purpose of allowing one party to resell the goods or services of the other. A Value Added Reseller (VAR) agreement is similar in that it allows one party to resell the goods or services of the other, however, it allows for a ‘value add’ to be added by the first party, such as technical support, customisation or implementation services. This can provide a competitive advantage to the VAR and help them stand out from competing resellers.

Q: What are the essential components of a VAR agreement?

Asked by Emma on May 15th, 2022.
A: The essential components of a VAR agreement include an introduction to the parties involved, an outline of each partys’ responsibilities, payment terms and conditions, warranties and disclaimers, provisions for confidentiality and intellectual property rights, dispute resolution provisions and termination provisions. It is important to ensure that all aspects are covered in order to protect your interests as either a VAR or provider of goods/services.

Q: How do I draft a VAR agreement?

Asked by John on June 2nd, 2022.
A: Drafting a VAR agreement should always begin with an educational process on the different aspects of VAR agreements and how they can be beneficial for both parties. This can include researching different jurisdictions’ laws, researching your industry and sector, understanding your particular business model (SaaS, Technology, B2B etc.), and understanding your particular needs for such an agreement. Once this research has been completed, you should then begin to draft your agreement in accordance with applicable laws and regulations. It is important to ensure that all aspects are covered in order to protect your interests as either a VAR or provider of goods/services.

Q: What legal issues should I consider when creating a VAR agreement?

Asked by Madison on June 19th, 2022.
A: When creating a VAR agreement, you should consider several different legal issues including applicable laws and regulations in different jurisdictions (UK vs USA vs EU), intellectual property rights (including trademarks and copyright), payment terms / conditions (such as payment deadlines or late payment penalties), warranties and disclaimers (including liability limitations), dispute resolution provisions (including arbitration or mediation) and termination provisions (including notice periods). It is important to ensure that all aspects are covered in order to protect your interests as either a VAR or provider of goods/services.

Q: How do I ensure my VAR agreement follows local laws?

Asked by Matthew on July 6th, 2022.
A: When creating a VAR agreement it is important to ensure that it follows any applicable laws and regulations in different jurisdictions (UK vs USA vs EU). It is recommended that you seek independent legal advice from an expert in local law when drafting your agreement in order to ensure that it complies with all relevant legislation. It is also important to consider any intellectual property rights (such as trademarks or copyright) as part of your agreement in order to protect yourself from any potential disputes later down the line.

Q: What are the benefits of having a written VAR agreement?

Asked by Noah on July 24th, 2022.
A: Having a written VAR agreement provides several benefits for both parties involved in the reseller relationship. It helps to clearly define roles and responsibilities for each party as well as outlining payment terms / conditions and warranties / disclaimers which can help protect both parties from potential disputes. The agreement also helps protect intellectual property rights which can be invaluable for businesses with unique products or services. Overall, having an airtight written contract will help both parties feel secure in their business relationship which can lead to greater success for both parties involved.

Example dispute

Value Added Reseller Agreement Lawsuits

• A plaintiff might raise a lawsuit referencing a value added reseller agreement when the reseller has not met the terms of the agreement. This could include failing to pay for goods or services, selling goods or services outside the terms of the agreement, or failing to deliver products in a timely manner.
• The plaintiff could win the suit if they can prove that the reseller has violated the terms of the agreement and caused them harm. The plaintiff will have to show that the reseller was negligent in their duties and that the negligence caused the plaintiff to suffer damages.
• The plaintiff may need to provide evidence such as a copy of the agreement, proof of payments or lack thereof, or evidence of the reseller selling products or services outside the terms of the agreement.
• If the court finds in favour of the plaintiff, the damages awarded may include costs associated with the reseller’s breach of the agreement, lost profits, or other economic damages.
• Settlement might be reached through negotiations between the plaintiff and the reseller, or the court may order a monetary award to the plaintiff.

Templates available (free to use)

Value Added Reseller Agreement

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