Drafting a Software Reseller Agreement

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 ensuring the protection of both parties involved in a software reselling arrangement, a comprehensive and legally binding software reseller agreement is essential. A software reseller agreement outlines the terms and conditions of a sale and use of software, including the rights and obligations of each party, payment, delivery details, warranties, and any other relevant information.

The Genie AI team understands that when it comes to drafting a software reseller agreement it is important to seek professional advice so as to ensure that all legal requirements are met. The Genie AI community template library provides free access to millions of data points which can help you draft market-standard software reseller agreements. It also gives you access to community templates which can be tailored for your specific needs without having to pay for expensive legal advice or fees.

Having such an agreement in place protects both the customer’s interests as well as those of the software reseller by ensuring that there is clarity around all payments and delivery dates; it also helps protect against any disputes arising from misunderstandings or disagreements over terms. Furthermore, by providing customers with clear guidelines regarding the use and return policies for the software purchased this reduces the risk of any breach in legal regulations or laws taking place.

At Genie AI we understand that these agreements can have far-reaching implications; therefore our step-by-step guidance is designed with non-university educated audiences in mind so that anyone can develop an understanding of what should be included within such agreements without being confused by complex legal jargon or costly fees associated with seeking professional legal counsel on this matter.

So if you’re looking for assistance on how best to draft your own market-standard Software Reseller Agreement then read on below for more information on how best to access our template library today!

Definitions (feel free to skip)

Duration: The length of time that something lasts.
Rights: Legal entitlements that one person or group has over another.
Obligations: Legal duties or responsibilities that one person or group has to another.
Exclusions: Things or activities that are not included in a list or agreement.
Penalties: A punishment or consequence for breaking a law or rule.
Features: Characteristics or functions of something.
Functionality: The ability of a product or service to perform its intended purpose.
Licenses: Permission to do something that would otherwise be illegal.
Indemnities: Agreements to compensate another person or group for losses or damages.
Confidentiality: Keeping information secret or private.
Termination: The ending of a contract or agreement.
Dispute Resolution: A process of resolving disagreements or differences between two or more parties.
Applicable Laws: Laws that are relevant to a particular situation.

Contents

• Defining the scope of the reseller agreement
• Outlining the duration of the agreement
• Outlining the rights and obligations of the reseller and the customer
• Outlining the scope of the reseller’s services
• Outlining any exclusions
• Setting out payment terms
• Stating the payment terms
• Outlining any penalties for late payment
• Describing the software
• Outlining the features
• Outlining the functionality
• Outlining any other details of the software
• Setting out warranties and indemnities
• Outlining warranties and indemnities from the reseller to the customer
• Outlining warranties and indemnities from the customer to the reseller
• Setting out confidentiality provisions
• Outlining how the customer and reseller will keep confidential details of the software
• Outlining how the customer and reseller will keep confidential details of the agreement
• Setting out termination provisions
• Outlining the conditions under which either party can terminate the agreement
• Outlining the consequences of termination
• Setting out dispute resolution provisions
• Outlining how any disputes will be resolved
• Describing applicable laws
• Outlining which laws apply to the agreement
• Outlining any other relevant terms
• Drafting the agreement
• Executing the agreement

Get started

Defining the scope of the reseller agreement

• Determine what type of software the reseller will be selling (e.g. software-as-a-service, downloadable software, etc.)
• Outline the geographic regions in which the reseller has the right to resell the software
• Establish the channels through which the reseller can market and sell the software
• Identify any restrictions on how the reseller can market and promote the software
• Specify whether the reseller is authorized to provide any services related to the software
• Decide if there are any restrictions or requirements for the reseller to meet in order to be eligible to resell the software
• When you have outlined all of the above, you can check this step off your list and proceed to the next step.

Outlining the duration of the agreement

• Determine the length of the agreement and include it in the agreement
• Determine if the agreement should be automatically renewed and if so, how often
• Specify when and how either party can terminate the agreement
• Include a clause that the customer is obligated to pay any fees that the reseller incurred prior to termination
• Once you have included all the required information, review the agreement and make sure that it accurately reflects the terms of the agreement
• When you are sure that everything is correct, check this off your list and move on to the next step.

Outlining the rights and obligations of the reseller and the customer

• Identify the reseller’s rights to resell the software
• Specify the customer’s rights to use the software
• List the customer’s obligations to the reseller
• List the reseller’s obligations to the customer
• Include any disclaimers and limitation of liability
• Specify any warranties or guarantees
• Outline any other terms and conditions
• Allocate responsibility for any taxes or fees

You can check this off your list when you have detailed the rights and obligations of the reseller and the customer in the software reseller agreement.

Outlining the scope of the reseller’s services

• Identify the services that the reseller will provide
• Specify the geographic area where the reseller will be providing its services
• Set out any conditions on the reseller’s provision of services (e.g. minimum order value)
• State any restrictions on the reseller’s ability to provide services (e.g. not able to provide services outside of the specified geographic area)
• Identify any additional services the reseller will provide, beyond the core services

You can check this step off your list when you have outlined the scope of the reseller’s services within the agreement.

Outlining any exclusions

• Identify any services the reseller will not provide
• Specify any geographical restrictions on where the services will be provided
• Identify any products or services the reseller is not allowed to resell
• List any third parties who are excluded from the agreement
• Specify any other limitations the reseller may have

You can check this off your list once you have listed out any exclusions and how they apply to the reseller.

Setting out payment terms

• Identify payment terms for the Reseller’s purchase of Software from the Supplier.
• Create payment terms that are appropriate for the Software in question.
• Include payment options such as full payment upfront, installment payments, or periodic payments.
• Negotiate payment terms with the Supplier, making sure both parties are in agreement.
• Include any applicable discounts, fees, and other related costs.
• Include the time frame for payment and what will happen if payment is not received within the stipulated time.
• Add terms for any deposit or other advance payments.
• Once all the payment terms have been agreed upon, add them to the Software Reseller Agreement as a separate section.
• Check off this step when all the payment terms have been agreed upon and added to the Software Reseller Agreement.

Stating the payment terms

• Draft the payment terms, including a payment schedule and any applicable late fees
• Include a description of the payment method, such as a credit card or check
• Specify the timing of payments, such as due upon signing or within 30 days of invoice
• State the currency in which payment should be made
• When you have completed the section on payment terms, you can move on to the next step, outlining any penalties for late payment.

Outlining any penalties for late payment

• Outline the consequences of late payment in the agreement, including a late payment fee.
• Specify the amount of the fee and when it will become due.
• Note any other penalties or consequences that will apply when payment is late.
• Make sure to note that any late payments will be subject to interest at a rate specified in the agreement.
• Check off this step when all applicable late payment terms have been included in the agreement.

Describing the software

• Identify the type of software being resold
• Include a list of features and any limitations
• Include any information about software updates and maintenance
• Outline the software’s licensing terms
• Specify what happens if the software is no longer supported

Once you have included all the necessary information about the software in the reseller agreement, you can move on to the next step.

Outlining the features

• Identify the features of the software that will be included in the agreement
• Consider the limitations of the software that should be included in the agreement
• Outline the features of the software that can be used by the software reseller
• List the features that will be excluded from the agreement
• Include any restrictions on the types of customers that can use the software
• Note any additional features that may be included in the agreement
• When you are satisfied with the outlined features, you can move on to the next step.

Outlining the functionality

• Review the functional capabilities of the software
• Identify what features the software should include
• Develop a list of the functional requirements for the software and agree with the reseller
• Create a detailed description of the software’s functionality and capabilities
• Include a clause in the agreement outlining the reseller’s obligations to provide the agreed-upon functionality
• Once the functionality of the software has been outlined, the agreement should be reviewed and signed by both parties.

Outlining any other details of the software

• Identify any other details of the software that are relevant to the agreement
• Include details of the software such as its features, components, pricing and other elements
• Outline the scope of the agreement and any restrictions or limitations
• Specify the term or duration of the agreement
• Detail any requirements for maintenance or updates
• Include any geographic restrictions
• Once you have outlined all the details of the software, you can move on to setting out warranties and indemnities.

Setting out warranties and indemnities

• Take the time to discuss warranties and indemnities with the customer
• Set out any warranties and indemnities that the reseller provides and any that the customer is responsible for
• Include the scope of the warranties and indemnities
• Ensure the warranties and indemnities are reasonable, fair, and not contrary to the law
• Clearly detail any liabilities or obligations that each party has
• Draft the warranties and indemnities in a way that is easy to understand
• Include a clause that states the warranty does not include any third-party software
• Make sure the customer understands their obligations and liabilities
• Have each party sign off on the agreement

When you have completed this step, you can move on to the next step of outlining warranties and indemnities from the reseller to the customer.

Outlining warranties and indemnities from the reseller to the customer

• Draft language outlining the warranties, representations, and indemnities the reseller will provide to the customer
• Consider including a warranty of title, a warranty of non-infringement, a disclaimer of warranties, and a limitation on liability
• Clearly state the duration of the warranties and indemnities
• When you’ve drafted the language, you can move on to the next step
• Be sure to review the document with a lawyer to ensure all necessary legal language has been included

Outlining warranties and indemnities from the customer to the reseller

• Ask the customer to provide details of any warranties they will provide to the reseller.
• Ask the customer to agree to indemnify the reseller from any claims related to the software or services provided by the customer to the reseller.
• Draft language providing that the customer shall be responsible for any costs, expenses, and losses related to the customer’s breach of warranties or indemnities.
• Draft language waiving any right of recovery by the reseller against the customer for any losses or damages incurred by the reseller as a result of the customer’s breach of warranties or indemnities.
• When you have included all the above points in the agreement, you can check this step off your list and move on to setting out the confidentiality provisions.

Setting out confidentiality provisions

• Clarify the types of information that must remain confidential
• Specify how the confidential information must be handled and stored
• Outline the circumstances in which the confidential information can be shared
• Ensure that all parties understand the obligations they have with respect to the confidential information
• Include a statement that the confidentiality provisions will remain in effect even after the agreement is terminated

Once each of these elements has been addressed in the agreement, this step can be checked off the list and the parties can move on to the next step in the guide.

Outlining how the customer and reseller will keep confidential details of the software

• Include a confidentiality clause in the agreement that covers customer and reseller’s obligations to keep confidential any information related to the software
• Specify that the confidential information can only be used for the purpose of the agreement
• Identify what constitutes confidential information, such as proprietary information, trade secrets, and pricing information
• Include a section in the agreement that specifies the remedies available to the customer and reseller in the event of a breach of confidentiality
• When complete, check off this step and move on to the next step: Outlining how the customer and reseller will keep confidential details of the agreement.

Outlining how the customer and reseller will keep confidential details of the agreement

• Draft a provision in the agreement that outlines the confidentiality requirements for both the customer and the reseller
• Include a clause that requires both parties to keep the terms of the agreement confidential
• Specify which information must remain confidential
• Identify any restrictions regarding disclosure of confidential information
• Set out the consequences for any breach of the confidentiality provisions
• When done, review the confidentiality section and ensure both parties understand their obligations
• Check this off your list and move on to the next step, setting out termination provisions.

Setting out termination provisions

• Determine which party can terminate the agreement, and under what conditions
• Draft appropriate termination provisions that set out the conditions for termination and the consequences of termination
• Include a provision that requires the reseller to return any confidential information to the customer upon termination
• Specify the notice period for termination and any other terms that may be relevant
• Agree on the remedies available to either party in the event of termination

You can check this off your list when you have included all the necessary provisions related to termination in the software reseller agreement.

Outlining the conditions under which either party can terminate the agreement

• Decide what the grounds for termination will be, such as breach of contract, failure to pay, and insolvency
• Include a notice period that the terminating party must give the other party before they can terminate the agreement
• Specify any circumstances that would result in immediate termination
• Outline any remedies available to the non-terminating party in the event of termination
• When you are finished outlining the conditions for either party to terminate the agreement, check it off your list and move on to the next step, which is outlining the consequences of termination.

Outlining the consequences of termination

• Review any other relevant agreements between the parties, such as nondisclosure agreements, prior to drafting the software reseller agreement
• Identify the consequences that may be triggered by the termination of the agreement
• Specify any costs or fees that may be incurred by either party in the event of termination
• Decide on any post-termination obligations that may be imposed on either party, such as a requirement to return or destroy information
• Make sure that any post-termination obligations are proportional and realistic
• When all of the consequences of termination have been outlined, you can move on to the next step of setting out dispute resolution provisions.

Setting out dispute resolution provisions

• Decide whether to include an arbitration or mediation clause in the agreement
• Establish the rules for the arbitration or mediation process
• Specify the venue for the arbitration or mediation if required
• Note down any other dispute resolution options that might be included in the agreement, such as a cooling-off period
• Agree on how any disputes will be handled
• Confirm that the process of dispute resolution is confidential
• When you’re finished, check that the dispute resolution provisions are clear and comprehensive.

You can check this step off your list when you have included all relevant dispute resolution provisions in the agreement.

Outlining how any disputes will be resolved

• Ensure that the agreement outlines the manner in which any disputes will be resolved
• Identify the court or other body that will have jurisdiction over any disputes
• Make sure that the agreement includes provisions regarding venue, choice of law and applicable statutes of limitation
• Include any other dispute resolution provisions that might be applicable to the agreement
• When all of the provisions are set out in the agreement, you can check this step off your list and move on to the next step.

Describing applicable laws

• Identify the relevant laws that apply to the agreement, such as the applicable state laws and federal laws.
• Take into consideration any industry regulations or standards that your agreement must adhere to.
• Document the applicable laws in the agreement.
• When finished, check the list off and move on to the next step.

Outlining which laws apply to the agreement

• Research to determine which laws apply to the agreement in the relevant jurisdictions - this includes any federal or state laws
• Review the agreement to make sure that it complies with the applicable laws and regulations
• Make sure that the agreement includes a clause outlining which laws and regulations apply to the agreement
• Include a clause that states the agreement is governed by the laws of the relevant jurisdiction
• Have the agreement reviewed by a legal expert to make sure it complies with the applicable laws
• Once all applicable laws are identified and accounted for in the agreement, you can check this off your list and move on to the next step.

Outlining any other relevant terms

• Identify and list any specific requirements or conditions you’ll need to consider, such as geographic restrictions or payment terms
• Outline any terms that address the use of the software such as restrictions on use, liability for damages, indemnification, warranty, and other obligations
• Make sure to specify any limitations on the reseller’s authority to act on your behalf
• Consider including time limits on the agreement or a provision for automatic renewal
• When you have all the terms you need for the agreement, you can move on to the next step.

Drafting the agreement

• Gather all the information necessary to draft the agreement, such as the software reseller’s details, the customer’s details, the software to be resold, the payment terms, and the terms of sale.
• Draft the agreement using a template or a software reseller agreement generator.
• Once the agreement has been drafted, review it to make sure it accurately reflects the terms of the agreement.
• Make any necessary changes to the agreement.
• When the agreement is finalized, check off this step and move on to the next step.

Executing the agreement

• Have both parties sign the agreement and date it
• Exchange originals or certified copies of the agreement
• Notarize the agreement if necessary
• Send one signed original to each party
• Make sure that each party has a copy of the agreement
• Once all of the above is complete, the agreement is now legally binding
• You can now check this step off your list and move on to the next step

FAQ:

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

Asked by John on 13th April 2022.
A: A software reseller agreement is a contract between a software vendor and a reseller. The reseller is granted the right to market, sell, and distribute the vendor’s software products. It outlines the terms of the relationship between the two parties, such as the commission rate that the reseller will receive, any restrictions on how they can market or distribute the software, and any other rules governing their relationship.

A software license agreement, on the other hand, is a contract between a software vendor and an end user. It grants the end user the right to use the software according to certain terms and conditions, such as how many users can access it at once, how long they can use it for, and what type of usage is permitted.

Q: What are some of the key elements of a software reseller agreement?

Asked by Sarah on 3rd May 2022.
A: Key elements of a software reseller agreement typically include details about the parties involved, such as their names and addresses; commission rates; payment terms; restrictions on marketing and distribution; warranties; indemnification; intellectual property rights; liability; dispute resolution mechanisms; and termination clauses. It is important to ensure that all key elements are included in order to ensure that both parties have clear expectations of their rights and obligations.

Q: How do I protect my intellectual property rights in a software reseller agreement?

Asked by David on 20th June 2022.
A: Intellectual property rights are vital for any software vendor to protect their products from unauthorised use or distribution. In order to protect your intellectual property rights in a software reseller agreement, you should include provisions which state that the reseller will not copy or reverse engineer your product, will not create any derivative works based on your product, and will not grant any third party access to your product without your permission. Additionally, you should also include clauses which state that all intellectual property rights remain with you as the owner.

Q: Are there any specific legal requirements I need to be aware of when drafting a software resellers agreement?

Asked by Jessica on 14th July 2022.
A: Depending on where you are located, there may be specific legal requirements that need to be taken into consideration when drafting a software reseller agreement. For example, in the United Kingdom there are certain regulations under The Consumer Rights Act 2015 which must be taken into account when creating contracts for consumers. Additionally, if you are selling software across international borders then you may need to comply with different laws in each jurisdiction. It is therefore important to consult with an experienced lawyer who can advise you on local laws and regulations when drafting your agreement.

Q: How does jurisdiction affect my software resellers agreement?

Asked by Michael on 22nd August 2022.
A: Depending on where you are located, there may be different laws which apply to your software resellers agreement. For example, in some countries consumer protection laws may not apply if you are selling business-to-business services or products. Additionally, if you are selling across international borders then different laws may apply in each jurisdiction, so it is important to make sure that your agreement is compliant with all relevant local laws and regulations. You should also include choice of law clauses which specify which country’s laws will govern any dispute that arises under your agreement.

Q: What should I include in my dispute resolution clause?

Asked by Emily on 30th September 2022.
A: When drafting a dispute resolution clause for your software resellers agreement it is important to consider how disputes between you and your reseller will be handled if they arise. Ideally your clause should specify how disputes will be managed (e.g., through negotiation or mediation) as well as who will bear any costs associated with resolving them (e.g., legal fees). Additionally, it should also state what actions can be taken if no resolution can be reached (e.g., arbitration or litigation). Ultimately, it is important to ensure that both parties have agreed upon an effective dispute resolution procedure before signing the agreement in order to avoid costly disputes down the line.

Q: Are there any special considerations I need to make when drafting a software resellers agreement for services such as Software-as-a-Service (SaaS)?

Asked by Matthew on 8th November 2022.
A: When drafting a software resellers agreement for services such as SaaS it is important to consider some special considerations that may not apply when signing traditional agreements for physical products or other services. For example, SaaS agreements typically require more detailed provisions around pricing models (e.g., subscription fees), data security measures (e.g., encryption), service levels (e.g., uptime guarantees), customer support requirements (e.g., response times) and termination clauses (e.g., early termination fees). Additionally, SaaS agreements also often include provisions around intellectual property rights (e.g., ownership of customer data) and liability limitations (e.g., indemnification). Therefore it is important to ensure that all of these considerations are included in your SaaS resellers agreement before signing it in order to protect both parties’ interests effectively.

Q: What types of restrictions should I include in my software resellers agreement?

Asked by Joseph on 16th December 2022.
A: Restrictions included in a software resellers agreement vary depending upon the product being sold and who is selling it (i.e., whether it’s an individual or an organisation). Common restrictions typically include prohibitions against reverse engineering or copying the product; limitations around how it can be marketed or distributed; restrictions against granting third parties access without permission; geographical restrictions around where it can be sold; and quotas around how much can be sold at once (e.g., no more than 10 licenses per customer). Ultimately it is important to ensure that all relevant restrictions are included in your agreement before signing in order to protect both parties’ interests effectively and avoid potential disputes down the line

Example dispute

Possible Lawsuits Referencing Software Reseller Agreement

• Breach of contract: If the reseller has failed to perform any of the required duties or services outlined in the reseller agreement, the plaintiff could raise a lawsuit for breach of contract.
• Unfair competition: If the reseller has engaged in anti-competitive practices that have caused harm to the plaintiff, the plaintiff could raise a lawsuit for unfair competition.
• Copyright infringement: If the reseller has used the plaintiff’s software without permission, the plaintiff could raise a lawsuit for copyright infringement.
• Misrepresentation: If the reseller has made false or misleading statements about the software, the plaintiff could raise a lawsuit for misrepresentation.
• Breach of fiduciary duty: If the reseller has acted in a way that is contrary to the interests of the plaintiff, the plaintiff could raise a lawsuit for breach of fiduciary duty.
• Unjust enrichment: If the reseller has profited unjustly from the plaintiff’s software, the plaintiff could raise a lawsuit for unjust enrichment.

To win the lawsuit, the plaintiff would need to prove that the defendant breached the terms of the agreement, engaged in unfair competition, infringed on copyright, misrepresented the product, breached fiduciary duty, or has been unjustly enriched. If successful, the plaintiff may be awarded damages and/or be granted an injunction to stop the defendant from continuing the activity in question.

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