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The narrator outlines key components to include in a distribution agreement. First, it's crucial to clearly define the products involved in the distribution to avoid future disputes regarding rights. This is especially important if exclusive rights are granted, such as for distribution in specific territories (e.g., Australia). A well-defined agreement will ensure that all parties have a mutual understanding of the products covered, thereby minimizing the potential for conflicts later on. This clarity in terms helps establish a transparent and binding contract.