Post on 14-Apr-2018
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MARKETING AGREEMENT
THIS AGREEMENT is made on September 2001 between
V.L.S. Foods Private Ltd., a Company incorporated
under the Companies Act., 1956, having its registered
off ice at 416.12 Krishna Colony, Gurgaon (Haryana)
(hereinafter referred to as VLS) represented by Managing
Director Deepak Bhardwaj of the one part and HLL
company incorporated under the Companies Act, 1956
having its registered 7th floor, Cuffe Parade, Bombay
hereinafter referred to as HLL represented by its General
Manager (CS & P) Shri. A.M. Rao of the other part.
Whereas VLS is engaged in the business of procuring and
supplying the products manufactured by M/s. Paramount
Food Industries (PFI), Gurgaon (Haryana) hereinafter called
the Contract Products.
And whereas HLL is a trading, company engaged in the
marketing of consumer and other goods through an
experience marketing sales organisation all over India.
And whereas VLS is desirous of supplying the contract
products and wishes to appoint a Marketing Representative
to promote and sell the contract products and HLL is
desirous of marketing the aforesaid goods supplied by VLS,
the Parties (i.e VLS and HLL) have agreed that VLS shall
supply the contract products to HLL , and that HLL shall
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provide the required infrastructure and expertise for
marketing these products upon the terms and conditions
which the Parties have desired to reduce in writing as
hereinafter contained.
NOW IT IS HERBY AGREED BY AND BETWEEN THE
PARTIES HERETO AS FOLLOWS
1. VLS hereby appoints HLL as its exclusive Marketing
Representative to sell the contract products herein
mentioned at Clause (2) of various pack sizes
manufactured by PFI within the Delhi Branch areas of
HLL. The areas of operation under this agreement may
be increased from time to time by mutual consent of
the parties.
2. VLS shall supply to HLL for marketing the following
products in the brand name of Gold Crunch in various
pack sizes. It is also agreed that the VLS will offer new
products/new pack sizes if any in future to HLL for sale
on the terms & conditions that may be agreed between
the Parties. However, the terms and conditions in such
cases and not be less favourable than those under this
agreement.
1. Corn flakes (restricted to Rajasthan)
2. Malted Dalia
3. Chow Chow
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4. Plain Noodles
3. The target sales per month to be achieved by HLL for
the contract products in different packs in the agreed
areas during the validity of this agreement will be
mutually decided by the parties from time to time.
4. VLS shall be responsible for the supply of the Contract
products to be delivered at the warehouses/godowns of
HLL and HLL shall unload and store them at its risk and
responsibility. VLS agrees that it shall make good the
shortage arising as a result of damage caused to the
goods in the course of transit. However, HLL shall
inform VLS regarding, such damage arising in the
course of transit within five days of taking delivery of
the said goods at its warehouses/godowns. It is agreed
that this condition will be applicable only to such
damage to goods as can be detected visually and by
outward inspection.
5. It is agreed that VLS shall effect delivery of the
contract products at the warehouses/godowns specified
by HLL, and that it shall be given an acknowledgement
receipt duly signed by the representatives ofHLL at the
time of delivery. The expenses pertaining to transport
of the contract products to the godowns of HLL and
expenses relating to freight, insurance, handling,
loading and other charges incidentally thereto shall be
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borne by VLS. I t is agreed by the parties that any
expenses that would be incurred in transporting, the
contract products from the godowns ofHLL to the other
stockists and/or retailers shall be borne entirely by HLL
itself.
6. It is agreed that HLL would sell and delivery the stocks
to its stockiest and or retailers at their own risk and
expenses. It is further agreed that HLL shall pay the
applicable sales tax, octroi, turnover tax and any other
duties, levies and cesses that may be in force form
time to time. It is agreed that the turnover tax, local
sales-tax and other duties and cesses which are not
permitted to be recovered from consumers which have
been paid by HLL shall be reimbursed to it by VLS on
receipt of proper evidence in this regard.
7. It is agreed that VLS shall supply the contract products
to HLL free from any manufacturing defects. However,
in the event of any manufacturing defects being found
in the products supplied to HLL, it shall be the right of
HLL to return the defective goods to VLS at the
expense of VLS at any stage i .e. from the t ime of
delivery to HLL up to the time of ultimate consumption
by the consumer.
8. It is agreed by the parties that if the contract products
are returned by the ultimate consumers to HLL, or its
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stockist and/or retailers at any time on the ground that
the said goods are not up to the stipulated
specifications or on any other reasonable ground
including expiry of the shelf life of the products, the
expenses (including insurance and freight charges)
incurred in returning the said goods to VLS shall be
borne by VLS. VLS shave also agreed to take back
old/damaged products at their cost, based on the field
reports ofHLL.
9. It is agreed by the parties that the delivery of the goods
under the arrangements contemplated by this agreed
shall be on a consignment basis and consequently; (i)
HLL shall use its own bill books for the sales made by
it; (ii) HLL shall print on its invoices and other business
stationery that they are the consignees of the goods
from VLS and that the contract products are the goods
supplied by VLS and (iii) HLL shall be responsible for
the filling of the sales-tax returns and other necessary
statutory returns with the local Govt. Authorities as per
the law.
10.It is agreed by HLL that it shall at all times keep such
levels of stocks of the contract products as may be
agreed to by the parties form time to time.
11.The contract products shall be sold by HLL at the prices
determined by VLS. The price structure shall
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specifically indicate the commission payable to the
stockiest, the retailers and to HLL itself, as agreed.
VLS shall have the option to revise the prices of the
contract goods from time to time after reviewing the
market conditions and other relevant factors after due
intimation to HLL. HLL agrees and undertakes to
strictly agreed to fix the price suitably lower than the
price of its main competitors in order to enlarge its
market share.
12.HLL shall be responsible for the collection of the sale
proceeds from the stockiest/distributors/retailers to
whom it has billed the stocks.
13.HLL also agrees and undertakes that during, the
pendency of this Agreement it shall not directly or
indirectly, in any manner promote and/or sell goods
identical to the contract products which are
manufactured by rival manufactures and sold under
different brand names except the existing products
already marketed by HLL.
14.It is agreed by HLL that it shall form to time report to
VLS on the market position of the contract products
and also report about the prices, terms, product
characteristic and ranges offered by the competitors.
15.It is agreed by the parties that the following system of
payment shall be followed:
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(i) For sticks received by HLL from 1st to 15th of the
month, the payment shall be made by t to VLS on
the last day of that month.
(ii ) For stocks received between 16th and the end of
the month the payment shall be made on or before
the 15th day of the succeeding month.
16. It is agreed by the parties that for services rendered by
HLL under this Agreement, VLS shall pay commission to
HLL @ 10% (ten percent only) of the Basic price of the
goods supplied for sale of HLL. It is agreed by the
parties that the stipulated commission amount
receivable by HLL shall be deducted by HLL on a
monthly basis from the sale proceeds by it to VLS.
17.It is agreed by the parties that all sales promotions and
advertising expenses shall be incurred and borne by
VLS. On its part, HLL shall render all necessary
advertising and sales promotion plans at the request of
VLS from time to time. VLSL shall provide sufficient
quantities of Posters, danglers, stickers to HLL for
promotion of the contract products. VLS have also
agreed to offer attractive trade and display scheme at
the time of launch of the products through HLL and also
and when market conditions demand from to time as
per reports of HLL. VLS have also agreed to offer 50
gms one time free serving packs of the new products
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free of cost for A class market/outlets and provide
counter sales in important locations in Delhi at the
stage of launch of the contract products under this
agreement also special trade schemes from time to
time by mutual consultation of the Parties.
18.VLS shall forward any direct inquiries or orders
received by it in respect of the supply of the contract
products in the areas actually covered by HLL to HLL
for execution, and HLL shall be entitled to receive
thereon the commission as per the terms of this
Agreement.
19.It is agreed by HLL that it shall send to VLS a clear
photocopy of the Sales-tax Assessment Order(s) for
each Financial Year and proof of discharge of the said
Sales Tax liabilities by it.
20.It is agreed that VLS as the supplier/Consignor of the
contract products shall conform to the legal provisions
of Weights and Measure Act and other applicable
Acts/Rules. In case of any violation of the aforesaid
Acts/Rules it is agreed that VLS alone shall be
responsible for the said violations and the ensuing
liabilities. VLS have agreed to affix stickers marketed
by HLL/print the said words on the packs of contract
products sold through HLL.
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21. (a) It is agreed by VLS that in supplying the contract
products it shall strictly adhere to the provisions of the
Prevention of Food Adulteration Act, 1954 and other
relevant rules and regulations that may be in force in
the areas where the contract products are being
marketed by HLL.
(b) It is agreed that where required by law VLS shall
furnish along with the products proper certification
stating that scientific food analysis has been conducted
on the products by the relevant Government
Department. It is also agreed that VLS shall supply the
products in properly packed containers.
22.VLS undertakes to indemnify HLL, its Directors, Officers
and Employees against all legal proceedings that may
be initiated against any or all of them with regard to the
adulteration etc. of contract products. The indemnity
shall cover all such cases of food adulteration, food
poisoning and other related problems arising out of or
caused by any act or commission or omission, that can
be reasonably attributable directly or indirectly to VLS,
its servants, employees or agents during the course of
manufacture of the contract products and/or their
transport to the godowns/warehouses ofHLL.
23.It is agreed that neither Party to this Agreement shall
be deemed to become an agent of the other as a result
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of this Agreement, nor shall either one of them hold
itself out as an agent of the other, and neither shall
incurancy commitments or a liability on behalf of the
other.
24.The terms of this Agreement shall commence from the
date of its execution and shall be valid for a period 3
years. The agreement may be renewed for such further
periods and on such terms and conditions as may be
mutually agreed to by the parties.
25.(a) Notwithstanding anything contained in the
Agreement, either party may terminate the
Agreement by giving six months written notice to
the other. On termination of the Agreement, it is
agreed that HLL shall return the unsold stocks of
VLS or pay the value thereof including those
which were supplied to it within 10 days from the
expiry of the notice period subject to final
settlement of accounts. It is agreed that the
transport, insurance and freight charges in
respect of such return goods shall be borne by
VLS.
(b) Notwithstanding the above, either party may
terminate this Agreement, in writing with
immediate effect, if the other party: (i) shall have
failed to cure a material breach of this Agreement
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within 60 days after receipt of a written notice to
do so and such default continues at the time of the
letter of termination notice; or (ii) enters
bankruptcy or Receivership or ceases business or
is liquidated.
26.This agreement covers domestic sales within the
territory of India. It is agreed by the parties that if any
export order is received by HLL in regard to contract
products, it shall discuss with VLS as to the terms and
conditions of pricing, payment and other essential
matters pertaining to the execution of the export order.
It is also agreed that the final decision in regard to all
aspects pertaining to the export order shall rest with
VLS.
27.Any disputes or differences or claims arising out of or in
relation to this Agreement including its construction
validity or performance shall be filed, tried and decided
in the Courts of competent jurisdiction in the city of
Bangalore or Delhi to the exclusion of all other Courts in
India.
28.All communications concerning the validity, l ife,
interpretation, modification or extension of this
Agreement or of the right and obligations of the parties
shall be addressed as follows:
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V.L.S. FOODS PRIVATE LIMITED
416/12, KRISHNA COLONY,
GURGAON (HARYANA)
Or at such address as either party may from time to time
substitute by written notice to the other. All other
correspondence shall be sent to such address as the
party which is to receive the same may direct.
29.The parties agreed that VLS shall not be held liable in
any manner whatsoever if it is unable to carry out its
oblations under this Agreement due to circumstances
beyond its control, and vice versa.
V.L.S. FOODS PRIVATE LIMITED
HINDUSTAN LEVER LTD
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INTRODUCTION
The agreement is related to consumer goods and its
transfer to the retailers through commissioning party. The
first party is a manufacturer and transfer the goods while
retaining the ownership to the second party to the contract
which basically a trading company. The second party takes
goods in transfers its further to retails through its sales-
network channel members. The retailers to whom the
goods will be delivered are not a party to the contact. This
is not a contract between two individuals but between two
registered companies hence the concept of considering
company as a dispute legal entity from its owner is very
were reflected here.
Several clauses have been added with relation to Indian
contract Act 1872 and General Principles of law of contract
(sections 1-75) are also a vital constituent of this
agreement.
Sections like 125, related to indemnity, section 62 and 63
related to discharge of agreement, section 13 related to
consent, section 2(d) related to consideration have also
been referred to in the agreement entailing several clauses
mentioned herewith in the contract.
Partially, some clauses gives a reflection of application of
sale of goods act and agency related contract but since the
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agreement no where state that any of the party is an
agent, hence we cant conclude that the government is
basically an agreement based on agent principal concepts.
Few of the clauses l ike delivery of goods (sec. 2(2))
acceptance of del ivery by another party (sec. 42)
delegation of authority (section 190) have been used
regarding delivery of contract goods and the power of
second party is using discretion.
The agreement is fully legal contract as it do not fa ll under
stated sections like
Section 26 - Agreement in restraint of marriage
Section-27 - Agreement in restraint of trade
Section 28 - Agreements in restraint of legal proceedings
Section-29 - Agreement the meaning of which is uncertain
etc.
Both the representatives are fully 'Competent to Contract'
(section 10) on behalf of aforesaid companies.
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The 'Proposal or offer' terms are very signif icant in nature
while drafting any kind of agreement and in this agreement
also the offer was made earlier by one of the party and
consequently it has been accepted by the other party after
some desired amendments (Section 2 (A) of ICA and 2 (b)
of ICA
Assumption:
The acceptance in this case in absolute and unqualif ied
(Section 7(1)) and also has been expressed in a usual and
reasonable manner (Section 7(2) ICA.
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THE APPLICATION OF INDIAN CONTRACT ACT, LAW OF
SALE OF GOODS, LAW OF INSOLVENCY LAW OF
CARRIAGE OF GODS, AS RELATED IN THE CLAUSES
MENTIONED IN THE AFORESAID AGREEMENTS.
Agreement is enforceable by law, hence it is a contract
(Sec 2 (H) ICA
One element is present : It is an Agreement (Sec. 2 (c))
ICA
All essential elements of valid contract are present
(Section 2 (4) ) ICA
- Offer and acceptance
- Intention to create legal relations
Both the parties are competent (Sec. 11) ICA
Agreement is under writing and registration (Section 25)
ICA
It is a certain agreement (Section 29) ICA
Complete possibility of performance as it involves
transfer of contract goods with engaged resources (Sec.
56) ICA
It is a valid contract not a voidable contact (Section 2 (i)
ICA
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CLAUSE WISE REFERENCE
Clause 1
Amendments on mutual consent (section -14) and free
consent.
Clause 2
Sale of good Act (Section 4 (1) SGA
Clause 3
Agreement to sell (Section 4(3) SGA
Clause 4
Place of delivery (Section 36 (1)) SGA
Clause 5
Expense of delivery [Section 36 (5)] SGA
Clause 6
Place of delivery and further transfer goods
Clause 7
Buyer not bound to returns rejected good (Section 45) SGA
Clause 8
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Same as above
Clause 9
Manner of delivery - Section 36(3) SGA and expenses
Section 36 (5) SGA
Clause 10
Denial of delivery of wrong quality (Section 37) SGA
Clause 11
Mode of fixing the price (Section 9) and expressly fixed by
the compact itself.
Clause 12
Release to collection of payments
Clause 13
Based on mutual consent that competition goods will not
be sold by second party during agreement tenure.
Clause 14
Based upon providing reports about market condition etc.
General clause based on mutual consent,
Clause 15
Delivery and payment (Section 32) SGA
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Clause 16
Price of goods and commission receivable (Section 9) SGA
Clause 17
Expenses [Section 36 (5)]
Clause 18
Related to commission to be received on direct enquiries
and orders.
Clause 19
Legal or valid element of a contract. All I am related
requirements to be fulfilled
Clause 20
Liability of buyer for neglecting the goods. Adhering to
legal provisions.
Clause 21
Condition as to merchantability [Section 16 (2)] SGA
Clause 22
Rights of indemnity holder and liability of second party in
case of any toss or legal proceedings.
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Clause 23
The section 182 in fully denied i.e. neither party is an
agent in the Agreement.
Clause 24
Discharge of agreement section 63 SGA
Clause 25
Discharge of agreement Section 63
Clause 26
Exports related mutual consent with discretion pertaining
to one party.
Clause 27
Covered under remedies in case of breach of contract and
Area of jurisdicious as per the agreement.
Clause 28
Commission addresses as per agreement mutually decided
by both parties.
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ASSIGNMENTON
'MARKETING CONTRACT'
Submitted to:
Prof. D. JAGANNATHAN
Submitted by:
DEEPAK BHARDWAJ
INSTITUTE FOR INTEGRATED LEARNING ININSTITUTE FOR INTEGRATED LEARNING IN
MANAGEMENT LODHI ROAD, NEW DELHIMANAGEMENT LODHI ROAD, NEW DELHI