Document background
The Distributor Settlement Agreement is a crucial document used when resolving disputes or terminating relationships between manufacturers/suppliers and their distributors in India. It becomes necessary when parties need to address conflicts arising from distribution arrangements, such as territory violations, performance issues, payment disputes, or breach of contract terms. This agreement, governed by Indian law, particularly the Indian Contract Act, 1872, and related commercial legislation, provides a structured framework for settling disputes while clearly defining future obligations. The document typically includes comprehensive terms covering financial settlements, inventory disposition, mutual releases, and either termination procedures or relationship continuation terms. It's particularly important in the Indian business context where distribution networks often involve complex territorial and commercial arrangements requiring careful consideration of local business practices and legal requirements.
