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The video tutorial outlines essential elements to include in a distribution agreement. Firstly, it's crucial to have a clear understanding of the products involved; the agreement should specify which products the distributor can distribute to avoid future disputes. If the distributor is granted exclusive rights, such as in a specific region like Australia, the agreement must explicitly state the products covered under those rights. This clarity ensures that both parties understand the terms, minimizing the potential for misunderstandings later on.