Retail Price Maintenance Agreement Example
A retail price maintenance agreement is an agreement between a manufacturer or supplier and a retailer that sets the minimum price at which the retailer can sell the product. This is also known as a “minimum advertised price” or MAP agreement. This helps to prevent the retailer from undercutting the manufacturer’s suggested retail price, which could harm the brand’s reputation and sales.
Here is an example of a retail price maintenance agreement:
Agreement between ABC Manufacturing and XYZ Retailer:
1. Minimum Advertised Price (MAP): XYZ Retailer agrees to sell all products provided by ABC Manufacturing at or above the MAP set by ABC Manufacturing.
2. Monitoring: ABC Manufacturing will monitor the prices listed by XYZ Retailer to ensure they are in compliance with the MAP agreement.
3. Violation of Agreement: If XYZ Retailer is found to be violating the MAP agreement, ABC Manufacturing may take the following steps:
a. Suspend shipments of products to XYZ Retailer.
b. Terminate the agreement with immediate effect.
4. Resale Price Maintenance: XYZ Retailer acknowledges that ABC Manufacturing has the right to set the final retail prices of its products and that XYZ Retailer will not engage in any activity that could be construed as resale price maintenance.
5. No Advertising Below MAP: XYZ Retailer acknowledges that it will not advertise or promote any products supplied by ABC Manufacturing below the MAP.
6. Compliance: This agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. All provisions of this agreement shall be interpreted, construed, and enforced in conformity with the laws of the state in which ABC Manufacturing is located.
By signing this agreement, XYZ Retailer agrees to comply with the minimum advertised prices and to maintain the brand reputation of ABC Manufacturing. This agreement ensures that all retailers selling ABC Manufacturing’s products adhere to the same pricing policies, so customers receive consistent pricing and brand messaging.
In conclusion, retail price maintenance agreements are crucial for protecting the brand reputation and sales of manufacturers. By setting a minimum advertised price, manufacturers can ensure that their retailers maintain the brand’s integrity and do not undercut the suggested retail price. It also ensures that customers receive consistent product pricing and messaging from all retailers.