Dealership contracts are basically written documents prepared lawfully so as to bring all parties involved in a deal together and make them agree on various clauses inherent to the contract by making them thoroughly read and understand the terms and conditions so framed to put a specific code of conduct, in terms of dealership practice. These contracts should hence be signed by both parties – the dealers as well as the respective customers.

Dealership contracts are generally represented in a written format, although oral contracts are also possible. The basic reason for drafting them in pen and paper is to maintain records of all dealership details, of some particular product or service generally in bulk or at comparatively lower costs, to serve as evidences of authenticity of the contract and its corresponding terms if so required in case of legal obligations. A few noteworthy points to be considered while framing dealership contracts are:

  • All details of identification of both parties, registered under law, are to be provided in the dealership contracts. Their approval of the contract should be stated in clear terms so as to avoid any misunderstanding in the future. The involved parties should also sign the contract neatly.
  • Dealership contracts should contain respective contract number, registration codes, product or service specifications, accurate price, etc. Also, the date of signing the contract should be mentioned and the validity period included.
  • Dealership contract should state all terms in details and include events where the contract may stand legally cancelled. Penalty statements and fine, if any, should be mentioned herein as well.

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