VAR agreement (value-added reseller agreement)

A VAR agreement is a legal contract between a manufacturer and a value-added reseller that specifies details of the rights and obligations of both parties.

A VAR agreement is a legal contract between a manufacturer and a value-added reseller that specifies the rights and obligations of both parties. A VAR purchases a product from a manufacturer, adds value to that product in some way and then resells the product as its own. A VAR agreement specifies the conditions that must be adhered to throughout that process. 

The details of the VAR agreement contract may include:

  • The specific products available to the VAR.
  • How those products will be marketed. 
  • The geographical area in which the VAR may resell the products. 
  • The timeframe during which the contract is in effect.
  • Exclusivity or non-exclusivity.
  • Sales targets. 
  • Conditions for product returns.
  • Conditions for termination of the agreement.

It's important to ensure that a VAR agreement is in alignment with business goals and that its stipulations are realistic. Because VAR agreements are legally binding, a failure to meet the terms of the contract can result in not only premature termination of the agreement but also legal action and fines. 

This was first published in April 2013

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