Reseller Agreement in Malaysia: Template, Key Clauses and Local Law (2026)

What a reseller agreement does A reseller agreement lets one business (the reseller) buy or license a supplier's products or services and sell them on to its own customers. The reseller is an independent business, not an employee or an agent, and usually earns from the margin between the price it pays the supplier and the price it charges the end customer. It is the standard way a software vendor, a hardware maker or a service provider reaches a new market or a new customer base through a local partner. In Malaysia a reseller arrangement is a commercial contract governed by the Contracts Act 1950 (Act 136), shaped by competition law, tax rules and, where software or digital products are involved, intellectual property and licensing terms. This page explains how to build one that works. It is general information, not legal advice; confirm the specifics with a Malaysian lawyer. ## Reseller, distributor or agent: get the model right first The labels matter because they change the legal relationship. - A reseller buys or licenses and sells on in its own name, earning a margin. It carries the customer relationship and, often, the payment risk.

• A distributor is similar but usually buys stock to hold and resell, and the term is common for physical goods.
• An agent does not buy or sell on its own account. It introduces or concludes sales on behalf of the supplier and earns a commission. An agent can create legal obligations for the supplier, which a reseller does not. Getting this wrong creates confusion over who owes what to the end customer, who sets the price, and who carries tax and liability. Decide the model, then draft to it. ## Is a reseller agreement binding in Malaysia? Yes, when the Contracts Act 1950 requirements are met: offer and acceptance, consideration, capacity, free consent and a lawful object. The Act is modelled on the Indian Contract Act 1872. A reseller agreement is a business-to-business contract, so the consumer-specific protections of the Consumer Protection Act 1999 generally do not apply between supplier and reseller, though they will apply to the reseller's dealings with end consumers. ## Key clauses in a Malaysian reseller agreement ### Appointment, territory and exclusivity State what the reseller is appointed to sell, in which territory, and whether the appointment is exclusive, non-exclusive or sole. Exclusivity is valuable to the reseller and a commitment for the supplier, so pair it with minimum purchase or sales targets, and set what happens if targets are missed (loss of exclusivity, or termination). Be careful with exclusivity and territory restrictions because they can raise competition issues (see below). ### Pricing, margin and payment Set how the reseller is priced: a discount off list, a fixed wholesale price, or a margin band. The supplier can suggest a resale price but should be cautious about fixing the reseller's resale price, which can breach competition law. Cover payment terms, currency, credit limits and what happens on late payment. ### Product supply, licences and resale rights For software and digital products, the reseller needs a clear right to resell licences or subscriptions, and the end customer needs a valid licence from the supplier. Define whether the reseller sells the supplier's end-user licence directly, or resells a subscription the supplier fulfils. In Malaysia software is protected as a literary work under the Copyright Act 1987, so the right to copy, distribute or sublicense must be granted expressly; it is not implied by a supply arrangement. ### Trademark and brand use If the reseller uses the supplier's name and marks, grant a limited, revocable licence to use them only for approved resale and marketing, with brand guidelines, and make clear the reseller gets no ownership of the marks and must stop using them on termination. ### Obligations and standards Set what each side must do: the reseller's sales, support and reporting duties; the supplier's supply, training and product update duties. Include reporting of sales and, where relevant, of end-customer details, subject to data protection rules under the Personal Data Protection Act 2010. ### Tax, including service tax Where the product is a digital service, Malaysian service tax can apply, and from 1 March 2024 the service tax rate rose from 6 percent to 8 percent for most taxable services, including digital services. State who accounts for which taxes and whether prices are inclusive or exclusive of tax, so margins are not eroded by an unexpected tax charge. ### Liability, warranties and indemnities The supplier usually warrants the product and indemnifies the reseller against intellectual property infringement claims. The reseller usually indemnifies the supplier for its own conduct, such as unauthorised promises to customers. Cap liability on both sides and carve out the items that should not be capped. ### Term, termination and post-termination Set the term and renewal, termination for breach and insolvency, and what happens at the end: run-off of existing customer contracts, return or sell-through of stock, stopping use of marks, and handling of the installed base. For subscriptions, decide who keeps the end-customer relationship when the reseller leaves. ### Competition law The Competition Act 2010, enforced by the Malaysia Competition Commission (MyCC), prohibits anti-competitive agreements. Resale price maintenance (fixing the price at which the reseller must resell), absolute territorial protection and certain exclusivity arrangements can raise concerns. Keep pricing guidance as a recommendation, and take advice before imposing hard resale price or territory restrictions. ### Governing law and disputes Choose Malaysian law where the deal is centred in Malaysia, and decide between the courts and arbitration (the Asian International Arbitration Centre is a common choice) for disputes. ## A simple reseller agreement structure 1. Parties, recitals and definitions

2. Appointment, territory and exclusivity
3. Targets and consequences of missing them
4. Pricing, margin, invoicing and payment
5. Product supply, licences and resale rights
6. Trademark and brand licence
7. Reseller and supplier obligations, reporting and data protection
8. Tax, including service tax
9. Warranties, liability and indemnities
10. Term, termination and post-termination run-off
11. Competition law compliance
12. Governing law (Malaysia) and dispute resolution ## Common mistakes in Malaysian reseller agreements - Blurring reseller, distributor and agent, so nobody is sure who carries the customer and the risk.

• Granting exclusivity with no targets, leaving the supplier locked to an underperforming partner.
• Fixing the reseller's resale price or imposing hard territory limits without competition advice.
• Not granting a clear right to resell or sublicense software licences, so end customers hold invalid licences.
• Ignoring the service tax point, so an 8 percent charge quietly erodes the reseller's margin. ## Keeping reseller relationships under control A growing channel means many reseller agreements, each with its own territory, margin, targets and renewal date, plus the trademark and licence terms that sit inside them. The hard part is not signing the first partner. It is keeping the terms consistent across the channel, spotting the one agreement that granted exclusivity without targets, tracking which partners are up for renewal, and knowing which version of each contract is live. That work is the same whether you have three resellers or thirty, and it is far easier when drafting, per-clause risk review, version history and renewal tracking live in one place rather than across folders and inboxes. A single AI contract workspace such as Adira is built around that idea. Adira is India-first today, with other jurisdictions including Malaysia on its roadmap, so for Malaysia-specific competition and tax positions you would still confirm the detail with counsel. The point to take is the direction: a channel you can manage is one where every agreement stays in one place, consistent, with its targets and dates in view.