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The narrator explains key elements to include in a distribution agreement. First, it’s crucial to have a clear understanding of the products involved. The agreement should specify the products to avoid future disputes about distribution rights. This clarity is particularly important if the distributor holds exclusive rights, such as in a specific region like Australia. By clearly outlining the goods associated with these exclusive rights, both parties can prevent misunderstandings and ensure that the terms of the agreement are clearly defined and agreed upon.