A dealer is a business that buys products to resell in the course of its business—placing the products in inventory and selling them in a retail store or online in e-commerce. A dealer is a middleman between the distributor and the customer and is an authorized seller of the manufacturer's products in a particular geographic area—sometimes nationwide.
A dealer may sell competing products from different manufacturers or brands, or may be restricted by its dealer agreement with the manufacturer.
Distributors
A distributor has the exclusive right to distribute products in a certain geographic area. A distributor is usually selected by the product manufacturer to sell the product for the manufacturer to dealers in a certain geographic area.
Dealer and Distributor Agreements
The terms under which a dealer or distributor may sell the manufacturer’s products are usually governed by a written contract that may provide for minimum advertised pricing (MAP) and other important terms.
In Texas, dealers and distributors operate under commercial laws that govern the sale of goods, the Uniform Commercial Code (UCC), and specific state statutes that may apply to dealer and distributor relationships. Dealers are businesses that purchase products to resell to consumers, either in a physical retail environment or online. They often have agreements with manufacturers that authorize them to sell products within a certain area and may include restrictions on selling competing products. Distributors, on the other hand, have exclusive rights to distribute a manufacturer's products within a designated geographic area and typically supply products to dealers. Dealer and distributor agreements in Texas are binding contracts that outline the terms of the relationship, including aspects like minimum advertised pricing (MAP), territorial rights, and other obligations. These agreements must comply with Texas law, including antitrust laws that prevent unfair competition and promote fair business practices. It is advisable for dealers and distributors to consult with an attorney to ensure that their agreements and practices comply with all applicable laws and regulations.
