Resale Price Maintenance Agreement Template for Australia
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What is a Resale Price Maintenance Agreement?
The Resale Price Maintenance Agreement is a crucial document for businesses operating in Australia's wholesale and retail sectors where suppliers wish to maintain influence over the retail pricing of their products. Given that resale price maintenance is generally prohibited under Section 48 of the Competition and Consumer Act 2010 (Cth), this agreement must be carefully structured to either fall within permitted exceptions or obtain necessary ACCC authorization. The document is particularly relevant for premium brands, specialized products, and industries where consistent pricing is crucial for brand positioning. It typically includes detailed provisions on pricing mechanisms, compliance procedures, reporting requirements, and authorized territories, while ensuring alignment with Australian competition law requirements. The agreement should only be used after careful consideration of legal implications and, where necessary, obtaining appropriate regulatory approvals.
Frequently Asked Questions
Is a Resale Price Maintenance Agreement legally binding in Australia?
A Resale Price Maintenance Agreement is only legally binding in Australia if it has been specifically authorized by the ACCC under Section 88 of the Competition and Consumer Act 2010. Without ACCC authorization, RPM agreements are prohibited under Section 48 and cannot be enforced. This means unauthorized agreements may expose both parties to significant penalties and legal action.
Can I operate without a written Resale Price Maintenance Agreement in Australia?
Operating without a proper written RPM agreement in Australia is extremely risky and likely illegal. Any form of resale price maintenance conduct requires ACCC authorization under Section 88 of the Competition and Consumer Act 2010. Without documented authorization and proper agreements, businesses face potential penalties of up to $50 million for corporations or 30% of turnover.
How long does ACCC authorization take for a Resale Price Maintenance Agreement?
ACCC authorization for RPM agreements typically takes 3-6 months, though complex applications may take longer. The ACCC must assess whether the agreement provides net public benefit under Section 90 of the Competition and Consumer Act 2010. You should begin the authorization process well before any intended RPM conduct commences.
How is a Resale Price Maintenance Agreement different from a standard distribution agreement in Australia?
A Resale Price Maintenance Agreement specifically controls the resale price of products, which requires ACCC authorization under Australian competition law. Standard distribution agreements focus on territory, volume, and service requirements without setting resale prices. RPM agreements are subject to much stricter legal scrutiny and penalties under Section 48 of the Competition and Consumer Act 2010.
Does my RPM agreement need to comply with Australian Consumer Law as well as competition law?
Yes, your RPM agreement must comply with both the Competition and Consumer Act 2010 and Australian Consumer Law provisions. The agreement cannot include unfair contract terms under Schedule 2 of the Competition and Consumer Act, and must not mislead consumers about pricing arrangements. All consumer guarantee rights must remain intact regardless of RPM terms.
Can small businesses be exempt from RPM agreement requirements in Australia?
No, there are no small business exemptions for RPM requirements under Australian competition law. Section 48 of the Competition and Consumer Act 2010 applies to all businesses regardless of size. Small businesses engaging in RPM conduct without ACCC authorization face the same penalties, though individual penalties are capped at $2.5 million rather than the corporate maximum.
Which mistakes could invalidate my Resale Price Maintenance Agreement in Australia?
Common invalidating mistakes include operating without ACCC authorization, including anti-competitive clauses beyond price maintenance, and failing to specify the exact products covered. Additionally, agreements that attempt to control prices of competitors' products or include exclusive dealing arrangements may breach multiple sections of the Competition and Consumer Act 2010 and render the entire agreement unenforceable.
About the Resale Price Maintenance Agreement
A Resale Price Maintenance Agreement is a specialized commercial contract that governs pricing arrangements between suppliers and their resellers in Australia. Given the strict prohibition of resale price maintenance under Australian competition law, you need to understand both the legal requirements and practical applications of this document before implementation.
When do you need this document?
You need this agreement when establishing relationships with authorized dealers, distributors, or retailers where consistent pricing is crucial for your business strategy. This is particularly relevant for premium brands seeking to maintain brand positioning, specialized products requiring expert sales support, or industries where price competition could undermine product quality perceptions. The document is also necessary when you're seeking ACCC authorization for resale price maintenance conduct, as it demonstrates the commercial rationale and consumer benefits of your pricing arrangements. Manufacturers of luxury goods, technical equipment, or products requiring after-sales service often require these agreements to ensure their distribution network maintains appropriate pricing standards.
Key legal considerations
The most critical consideration is compliance with Section 48 of the Competition and Consumer Act 2010, which prohibits resale price maintenance unless specifically authorized. You must ensure your agreement either falls within narrow exceptions or obtains ACCC authorization under Section 88. The pricing mechanism clause requires careful drafting to distinguish between prohibited price fixing and permitted recommended retail pricing. Territory definitions must align with competition law requirements, while compliance procedures should include monitoring and reporting mechanisms. Your agreement must also address termination procedures, dispute resolution, and remedies for non-compliance. Consumer protection provisions under the Australian Consumer Law may impact your pricing practices, requiring transparency in commercial relationships and fair dealing obligations.
Legal requirements in Australia
Under Australian law, you must obtain ACCC authorization before implementing any resale price maintenance arrangements that would otherwise breach Section 48. Your agreement must clearly identify all parties with full legal names and ABNs, include background context explaining the business relationship, and define key terms such as 'Recommended Price' and 'Territory'. Supply terms must comply with general contract law under state Contracts Review Acts, ensuring validity and enforceability. The document must include detailed provisions on pricing mechanisms that distinguish between permitted and prohibited conduct. State Fair Trading Acts may impose additional requirements for commercial agreements, including disclosure obligations and fair dealing standards. You should also ensure compliance with any industry-specific regulations that may affect your pricing arrangements and maintain detailed records of ACCC authorization where applicable.
GOVERNING LAW
Applicable law
This Resale Price Maintenance Agreement is drafted to comply with Australia law. Key legislation includes:
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