+1 on Mark's comments. As I said, I was doing it off the top of my head (and just rushing an answer) but now that he mentions those points, they very much form part of the agreements I have seen. With respect to the auditing clause, I've usually seen a reserve the right to audit and the resellers are required to submit reports. One of my clients requires their resellers to get an actitivation key through them, and I think this is a good way to monitor sales and keep them honest.
On Mon, Nov 10, 2008 at 6:15 PM, Mark Neely <[EMAIL PROTECTED]> wrote: > Nick, > > On top of Elias' comments, I would also add a warning to ensure there is a > very clearly drafted accounting clause; specifically, one that gives you the > right to open the reseller's books and conduct your own audit of sales etc., > to ensure you've been paid the appropriate revenues. You'd be surprised how > many licensing contracts forget to incorporate this right. > > This is a very contentious area, and you'll no doubt encounter fierce > opposition (no business likes openning their books), but without the right > to inspect the books (even if you, in practise, do not act on it) then you > really can never be certain you are receiving correct payment. > > Other issues to be addressed in the document: > > - Duraction: Self explanatory > - Territories: What territories can the reseller service? Is your company > barred from competing in those territories? > - Claw-back: On what basis is your company entitled to (a) > rescind/terminate the agreement and (b) take over the end-user relationships > (e.g. in the event the reseller goes broke etc.) > - Minimum sales figures: Is the reseller obliged to hit minimum sales > targets to keep their status as a reseller? > - Restrictions on use: What can't the reseller do (e.g. modify software, > assign reseller rights, license to customers other than on pre-approved > license terms etc.) > - Reseller obligations: What does the reseller have to do (e.g. commit to > marketing, promotions etc.). End user-support is a biggie here, so it should > be clear who is responsible etc. > - Limitation of liability: Given SaaS is subject to the usual tech > stability issues, there should be a clear statement of what your companies > is and is not responsible for, and the scope of any liabilities (e.g. > refunds etc.). > > FInally, you should give some thought as to what currency you want to > strike the deal in. The AU$ is a bit of a basketcase right now, but it will > improve. There might be good reason to do the deal in US$ (e.g. if that is > where most of your end-users and/or re-sellers will be etc.). Depending on > the kind of figures involved, you might want a 'windfall' clause (i.e. if > the currency discrepancy becomes so large there is a windfall to the > reseler, what happens then?). > > All that said, the best deals are the ones with the simplest terms. Make > sure you agree the commercial nature/scope of the deal fully before trying > to put a contract in place: your business objectives, not legal drafting > requirements, should be the primary factor here. > > Regards, > > Mark > > ----- > Mark Neely > Master Strategist > Infolution Pty Ltd > 'Beyond Strategy. Leading Change' > > e: [EMAIL PROTECTED] > m: +61 (0)412 0417 29 > skype: mark.neely > > Read my blogs --> www.infolution.com.au > www.neelyready.com > Connect on LinkedIn --> www.linkedin.com/in/markneely > > > ------------------------------ > *From:* [email protected] [mailto: > [EMAIL PROTECTED] *On Behalf Of *Elias Bizannes > *Sent:* Monday, 10 November 2008 3:20 PM > *To:* [email protected] > *Subject:* [SiliconBeach] Re: Reseller Agreements > > I've got a few clients specifically in this situation (ie, Verisign, Sage > software, Net Return - software as a service and use resellers) and whilst > I've reviewed many many agreements, the one thing I can say that is > consistent is how inconsistent they are! These agreements tend to not follow > a standard terms, and it's one of the most painful parts of my job when > reviewing my clients revenue streams because it needs to be looked at case > by case. > > Off the top of my head > - you need to specify when you are entitled to recognise revenue. Is it > when the product gets delivered to the end customer and an invoice is > raised? Perhaps you only issue invoices once an activation key is provided > to your partner? The way you are entitled to recognising revenue will affect > your financial reporting (especially if you report on an accruals basis like > most larger companies) and potentially tax. > - another issue is liability. Does the resellers customers interact with > you or them? > - how do you deal with refunds? Is the risk with you or the reseller? > - what fees does the reseller get? > - what incentives are there for the reseller? ie, discounts of targets, > bulk upfront purchases > - is there exclusivity for the reseller? If so, that's a business risk - > you don't want to rely on more than 10% of your revenue from one reseller. > > > On Mon, Nov 10, 2008 at 2:55 PM, Nick Holmes a Court <[EMAIL PROTECTED]>wrote: > >> Hey guys >> >> Does anyone have any templates or any advice on setting up Software >> Reseller Agreement Contracts/Legals? >> >> We are a Software as a Service company, what key issues should we be >> addressing in a reseller contract? >> >> Thanks for your help >> >> Nick > > > > > -- Elias Bizannes http://liako.biz --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "Silicon Beach Australia" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [EMAIL PROTECTED] For more options, visit this group at http://groups.google.com/group/silicon-beach-australia?hl=en -~----------~----~----~----~------~----~------~--~---
