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TOPIC

Draft an agency agreement and distributors agreement for FMCG products by

taking into account relevant provision of laws like Sale of Goods act, Excise

tax, VAT, Contract act, Arbitration.

Prepared By:

Group No. 3

Sr no. NAME ROLL NO.

1 Neha Koli M1021

2 Rupesh Kumar M10233 Sherwin Mathias M1025

4 Shweta Meshram M1027

5 Sanchita Naik M1029

6 Abhishek Pai M1031

7 Nikhil Palan M1033

8 Vaishali Patil M1037

9 Kaustubh Rajapkar M1039

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Table of content:

1. What is FMCG product

2. Distributors Agreement

3. Agency Agreement

4. Difference between agency and distributor

5. Issues that affect both agent and distributors relationship

6. Contract Act

7. Contract of agency

8. Sales of goods act

9. Arbitration

10.Excise Tax

11.VAT

12. Draft of Distributors agreement

13.Draft of agency agreement

14.Conclusion

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Understanding FMCG products

The term FMCG refers to those retail goods that are generally replaced or fully used

up over a short period of days, weeks, or months, and within one year.

FMCGs have a short shelf life, either as a result of high consumer demand or

because the product deteriorates rapidly. Some FMCGs such as meat, fruits and

vegetables, dairy products and baked goods are highly perishable. Other goods

such as alcohol, toiletries, pre-packaged foods, soft drinks and cleaning products

have high turnover rates.

Main characteristics from the consumers' perspective:

Frequent purchase; Low involvement (little or no effort to choose the item -- products

with strong brand loyalty are exceptions to this rule) ; Low price.

Main characteristics from the marketers' angle:

High volumes; Low contribution margins; Extensive distribution networks and High

stock turnover.

There are various methods for a manufacturer or wholesaler to get its products to

market. Two of the most tried and tested methods are agency and distribution

arrangements.

Understanding distributors agreement

A distribution agreement is one made between a manufacturer and a supplier to

distribute and/or sell items manufactured. The supplier may make a distribution

agreement with separate stores selling the product that involves how goods will be

merchandised or how much supplies will available to the store. A distribution

agreement may also include terms regarding advertising of a product.

Generally the manufacturer pays a fee to enter into a distribution agreement with a

supplier. However, a balanced distribution agreement will provide opportunities to

make money for both the manufacturer and supplier. Of ten the manufacturer makes

the least money.

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For example, a farmer may enter into a distribution agreement with a produce

supplier. The farmer will get a price for his wares, the supplier will then sell the wares

for a larger price, and the supermarket will charge still more to consumers who wish

to buy the farmers products. Ultimately the three-tiered approach means everyone

makes money, but the farmer makes the least.

Distribution agreements may be categorized as either exclusive or non -exclusive. In

an exclusive distribution agreement, the supplier will grant to the distributor

exclusivity over a particular territory and/or product line and/or sales channel. The

usual quid pro quo for exclusivity will be some kind of performance obligations.

Distribution agreements often incorporate terms and conditions of supply, sometimes

in the body of the agreement and sometimes as a schedule or annex to the

agreement. These should cover all the nitty -gritty concerning supplies, including the

delivery of goods, the transfer of risk in and title to the goods, inspection

requirements, returns, and so on.

Common points to consider when drafting an distribution agreement are:

y the territorial or other scope of the agreement;

y non-exclusivity or exclusivity (taking into account competition law);

y non-compete obligations (taking into account competition law);

y minimum performance obligations;

y reporting obligations;

y marketing rights;

y trade mark licensing;

y the applicable terms and conditions of sale;

y the circumstances in which the agreement may be terminated; and

y the consequences of termination.

Informal understandings often lead to misunderstanding. The process of creating

and negotiating a contract helps to ensure that the parties really do agree upon the

terms of the deal. Equally important, where something does go wrong, a written

agreement will usually help.

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Understanding of agency agreement

Agency is a special type of contract. The concept of agency was developed as one

man cannot possibly do every transaction himself. Hence, he should have

opportunity or facility to transact business through others like an agent.

Other than matters of a personal nature, a person can employee a agent for

business, what he can do himself (e.g. a person cannot marry through an agent, as it

is a matter of personal nature)

No person who is not of the age of majority and of sound mind can become an

agent; the significance is that a Principal can appoint a minor or person of unsound

mind as agent. In such case, the Principal will be responsible to third parties. Thus,

Principal will be liable to third parties for acts done by Agent, but agent will not be

responsible to Principal for his (i.e. Agents) acts.

Common points to consider when drafting an distribution agreement are:

Terms of AgencyCommissionDuties and Responsibilities of the AgentDuties and Responsibilities of the Principal

TerminationCompensation & IndemnityArbitrationNoticesGeneralJurisdictionSchedule

The Difference between an Agent and a Distributor

If a person or entity is an "agent", it represents the manufacturer and usually has the

right to conduct business under the manufacturers marks and name. Legally, it often

means that the agent can bind the manufacturer contractually with a third party. An

agent never takes title to the manufacturers goods. Instead, it enters into

agreements with customers who then receive title to the goods directly from the

manufacturer. The agents profit comes from the commission that is earns from the

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manufacturer on each sale. Any agency agreement must make clear the basis for

calculating the commission and how returns or refunds are treated.

A "distributor" is an independent person or entity that cannot (unless contractually

permitted to do so) bind the manufacturer contractually to third parties. Thedistributor buys the goods from the manufacturer and then re-sells its inventory to

the customers. Its profit is derived from the mark-up or difference between the price

that it purchased the goods from the manufacturer and the price that it charged its

customers for the same goods.

Issues that Affect both Distributor and Agent Relationships

1. Territory. An agent or distributor will want a large territory. Additionally, they

will probably want the territory to be exclusi ve (i.e., no other agent or distributorcan be appointed in the territory). From the manufacturers standpoint, great

care should be taken in granting a large territory or exclusivity, unless the

agent or distributor has a verifiable track record. One opti on is to allow for the

"earning" of additional territory or exclusivity. For example, if the agent or

distributor meets certain sales goals, they will "earn" a larger territory and/or

exclusivity.

2. Distribution Channels. What distribution channels will the agent or distributor

be able to use? Will the manufacturer reserve certain distribution channels for

itself? For instance, will the manufacturer be able to sell via the Internet to

customers located in an agents exclusive territory?

3. Products. Which products will the agent or distributor have the right to sell?

Often, it will be all of a manufacturers product line. However, if the

manufacturer has diversified product lines, it may be limited to those products

which the agent or distributor has experience selling.

4. Term. How long will the agreement last? Will the agent or distributor have an

option to renew the agreement? A manufacturer will probably want a shorter

agreement, with performance standards for any renewal right. On the other

hand, the agent or distributor will probably want a longer agreement with

several renewal options.

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5. Termination. The agreement needs to be clear as to the conditions under

which either side can terminate the agreement. A termination provision may

range from a simple "30 days notice" by either side to "for cause" termination

only. If the agreement only allows termination for cause, then the definition of

"cause" needs to be expressly stated in detail. In this regard, you should

consult a lawyer in the local jurisdiction of the agent or distributor to make sure

that local law does not impose a "for cause" requirement, regardless of what

the agreement says this is particularly an issue in Latin America.

6. Effect of Termination or Expiration. The agreement should spell out what

will happen when the agreement expires or is terminated. For instance, in the

case of an agent, will the agent continue to receive commissions on pending

sales or future sales to existing customers? Similarly, will the distributor berequired to re-sell his inventory to the manufacturer? The agreement should

also make clear that the distributor or agent will no longer be able to use the

manufacturers trademarks.

7.Minimum Sales/ Purchase Requirements. Will the agreement contain

minimum sales requirements? In the case of a distributor, the manufacturer

should take care to ensure that it has the right to reject orders from the

distributor. This is particularly an issue when the manufacturer suspects that

the distributor is stockpiling products just to meet the minimum purchase

requirements. While the manufacturer gets its sale, the market is not being

developed if the distributor just sits on the products.

8. Warranty Service and Defective Products. The agreement should make

clear who is responsible for warranty and repair service in the territory. In doing

so, the agreement should state the terms under which the agent or distributor

will be compensated for performing warranty or repair service. Similarly, the

agreement should also address defective products and how they will be

handled. This might be a simple continual discount for products, to cover any

potential defective ones. Alternatively, it might require the return of the

defective products to the manufacturer followed by a corresponding credit.

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9. Trademarks. Chances are that the manufacturer will produce products under

certain trademarks. If this is the case, then the manufacturer needs to make

sure that it has adequately protected those trademarks in the juris dictions in

which it is selling. This will usually be accomplished by registration of the

trademark with the intellectual property authority in that country. Failure to

register the mark may result in third parties registering it before you

(trademark piracy is still an issue in many parts of the world) or, even worse,

your agent or distributor registering the mark(s) in their own name.

Assuming that the mark has been registered properly, the agreement should

contain a trademark license that specifies the t erms and conditions under

which the agent is entitled to use the mark(s). The agent or distributor should

also make sure that the agreement provides an indemnification, whereby themanufacturer will indemnify the agent or distributor if they are sued for

trademark infringement by a third party (while using the marks in accordance

with the license).

11. Confidentiality/Non-Compete. The agreement should contain a provision

requiring each party to maintain the confidentiality of information that it learns

from the other party. This is especially important if the manufacturer will be

providing marketing plans or other confidential information to the

agent/distributor.

The manufacturer may wish to require the agent/distributor not to sell

competing products during the term of the agreement and for a period of time

thereafter. Care should be taken in drafting such a provision. In particular,

local laws should be examined to determine the legality of non -competes in

that jurisdiction.

12. Market Development. Will the agent or distributor be required to take

affirmative marketing efforts to develop the market for the manufacturers

products? If so, will the manufacturer provide any financial support for

advertising or other marketing?

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Relevant Provisions of Contract Act

Section 10-defines a lawful consideration is the essential ingredients of a validcontract

All agreements are contracts if they are made by the free consent of parties

competent to contract, for a lawful consideration and with a lawful object, and are not

here by expressly declared to be void.

For example: suppose A agrees to sell his bike to B for Rs 10,000. The agreement

gives rise to a legal obligation on the part of A to deliver the bike to B and on the part

of B to pay Rs 10,000 to A. the agreement is a contract. If A does not deliver the

bike, then B can go to a court of law and file a suit against A for non performance of

the promise on the part of A. on the other hand, if A has already given the delivery of

the motorcycle and B refuses to pay price, A can go to the court and file a suit

against B for non-performance of promise.

Therefore all agreements are not contracts but all contracts are Agreements

Contract must look into the following particulars: -

1. Offer and acceptance: there must be two parties to an agreement, i.e. one

party making the offer and other party accepting the offer. The terms of the

offer must be definite and acceptance of offer must be unconditional.

2. Intention to create legal relationship: - when two parties enter into an

agreement, their intention must be to create legal relationship between them.

If there is no intention then there is no contract. Social and domestic nature

agreements do not consider a legal relationship and hence they are not

contracts.

In commercial and business agreement, the assumption is usually that the

parties intended to create lega l relationship.

3. Lawful consideration:- the agreements is legally enforceable only when

both the parties give something and get something in return. Consideration

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means something in return or benefits moving from one party to the other but

it must be real and lawful.

4. Capacity of parties: the parties entering into a contract must be capable of

entering into a lawful contract. It means that a person is capable to contract if

he or she is of the age of majority and he or she should be of sound mind.

Lunacy, minor, idiot, drunkard etc. cannot enter into a contract.

5. Free and genuine consent : - at the time of creating a contract it is essential

that there must be free and genuine consent of the parties to the agreement.

Free consent means parties are of the same mind on the material terms of the

contract. Same mind parties means when parties agrees about the subject

matter of the contact in the same sense and at the same time.

6. Lawful object: - the object of the agreement must be lawful. It means that the

object should not be illegal, immoral or opposed to public policy.

7. Agreement not declared void :- the agreement should not have been

expressly declared void by law of force in the country.

8. Certainty and possibility of performance : - the agreement must be certain

and clear. If it is not clear and certain then it cannot be enforce.

For example: A to sell to B a hundred tons of oil. There is nothing whatever to

show what kind of oil was intended. The agreement is cancelled for

uncertainty. It means that it should be clearly mention in the contract what

type of oil is wanted.

The agreements terms should be such as capable of performance.

For example: where A agrees with B to bring stars from the sky, the

agreement is void or cancelled as it is impossible of performance.

9. Legal formalities:- a contract may be made by words spoken or written. As

per legal effects there is no difference between a contract in writing and a

contract made by word of mouth. But if contract is in writing then it is in the

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interest of the parties. Also there are other formalities which have to be

compiled with in order to make an agreement legally enforceable. The

document in which the contract is incorporated is to be stamped. There are

other cases where a contract besides being in written one has to be

registered.

A contract may be discharged by:

1. Performance2. Tender3. Mutual consent4. Subsequent impossibility5. Operation of law6. Breach

1. Discharge of contracts by performance or tender:- the obvious mode ofdischarge of a contract is by performance that is where the parties have done

whatever was consider under the contract, the contracts comes to an end.

For example: A contacts to sell his bike to B for Rs. 100000 as soon as the car is

delivered to B and B pays the agreed price f or it, the contract comes to and end

by performance. If a promisor tenders performance of his promise but the other

party refuses to accept, the promisor stands discharged of his obligation.

2. Mutual consent:- if the parties to a contract agree to substitute a new contract

for it, or alter it, the original contract is discharged. A contract may terminate by

mutual consent in any of the six ways like notation, rescission, alteration, and

remission, waiver and merger.

3. Impossibility of performance:- a contract may be discharged because of

impossibility of performance. There are two types of impossibility 1. Impossibility

may be inherent in the transaction (i.e. the contract) 2. Impossibility may emerge

alter by the change of certain circumstances material to th e contract.

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4. Operation of law:- discharge of operation of law may take place in four ways.: 1.

Death 2. Insolvency 3. Merger 4. Unauthorized alteration of terms of a written

document

5. Breach: the actual breach can occur by 1. Failure of performance as promised

2. Making it possible for the other party to performance. the failure to

performance means that one party must not have performance a material part of

the contract by a stated deadline. The actual breach by failure to perform may

take place (a) at the time of when performance is due or (b) during the

performance of the contract. Thus if a person does not perform his part of the

contract at the stipulated time, he will be liable for its breach.

CONTRACT OF AGENCY

In India the relationship between agent and principal is primarily contractual in nature

and is governed by the terms of the contract entered into between them. The

contract of agency provides the frame work of rules and regulation that govern

formation and performance of any contract including the agency Contract.

It states that agent is a person employed to do any act for another or to represent

another in dealings with the third person is called principal. Any person who is of

the age of majority according to the law to which he is subject, and who is of sound

mind, may employ an agent.

Between the principal and third persons, any person may become an agent, but no

person who is not of the age of majority and sound mind can become a n agent, so

as to be responsible to the principal according to the provisions in that behalf herein

contained.

Agents authority may be expressed or implied.- The authority of an agent may be

expressed or implied. An authority is said to be expressed when it is given by words,

spoken or written. An authority is said to be implied when it is to be inferred from the

circumstances of the case

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Eg. A person may be appointed as agent either by word of mouth or by writing. No

particular form is required for appointing an agent. The usual form of written contract

of agency is the power of attorney on stamp paper.

It arises from conduct, situation or relationship of parties. Therefore it includes

agency by estoppels, agency by holding out and agency of necessity .

Agency by estoppels:-

When the person has by his conduct induced other to believe that person is his

agent he is stopped from subsequently denying it.

Example :- Prakash allows Aanand to represent as his agent by telling Cooper that

Aanand is Prakashs agent . Later when Cooper supplied certain goods to Aanandthinking him to be Prakashs agent Prakash shall be liable to pay the price to cooper.

By allowing Aanand to represent himself as agent, Prakash leads cooper to believe

that Aanand is really his agent

Extent of agents authority:-

An agent having an authority to do an act has authority to do every lawful thing which

is necessary in order to do such act. An agent having an authority to carry on a

business has authority to do every lawful thing necessary for the purpose, or usually

done in the course, of conducting such business.

Eg: A is employed by B, residing in London, to recover at Bombay a debt due to B. A

may adopt any legal process necessary for the purpose of recovering the debt, and

may give a valid discharge for the same.

A constitutes B his agent to carry on his business of a ship- builder. B may purchase

timber and other materials, and hire workmen, for the purpose of carryi ng on the

business.

The contract of agency also talks about When agent cannot delegate.- An agent

cannot lawfully employ another to perform acts which he has expressly or impliedly

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undertaken to perform personally unless it is required to do so because of the nature

or custom of the business

Example : A agency can delegate when:-

1. Expressly permitted by the principle2. The nature of agency such that it cannot be accomplished without the

appointment of sub agent.3. In an unforeseen emergency.

Duties and rights of agent

A) To conduct the business of agency according to principals directions.

The duty of the must be literally complied with i.e, the agent is not supposed to

deviate from the direction of the principal even for the principals benefit.

Example

1) A principal instructs his agent to deliver goods only against cash but the

agent delivers them on credit. In such a case the agent would be liable for

the price which the purchasers fail to pay.

B) The agent should conduct business with the skill and diligence that is generally

possessed by person engaged in a similar business except where the principal

knows that the agent is wanting in the skill .

Example

1) Where a lawer proceeds under a wrong sections of a law and thereby he

lost a case, he shall be liable for his customer for his loss.

C) To render proper accounts the agent has to be render proper accounts. If the

agent fails to keep proper accounts of the principles business everything

consistent with the proved facts will be presumed against him.

D) It is the duty of an agent, in cases of difficulty, to use all reasonable diligence in

communicating with his principal, and in seeking to obtain his instructions.

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E) An agent should deliver to the principal all moneys including secrete

commission received by him. He can however deduct his lawful expenses and

remuneration.

F) Not to deal on his account

Agent should not deal on his account without first obtaining the concept of his

principle. If he does so the principle can claim from the agent any benefit which

he might have obtained.

G) Not entitled to remuneration for misconduct.

H) Not to disclose confidential information supplied to him by the principal.

I) To take all reasonable steps for the protection and preservation of the interest

entrusted to him when the principal dies or becomes of unsound mind.

Rights of agent

y Right to remuneration

y Right of retainer

y Right of lien

y Right of stoppage in transit

y Right of indemnification

y Right to compensation for injury caused by principals neglect

Duties of principal

The rights of agents are in the fact the dut ies of the principal. Thus a principle is

1) Bound to indemnify the agent against the consequences of all lawful act done

by such a agent in excise of the authority conferred upon him.

2) Liable to indemnify agent against the consequences of an act done in the goodfaith, though it causes injury to the rights of third parties.

3) Bound to compensate his agent in respect of injury caused to such a agent by

the principles neglect or want of skills

Liability of principal to third party:

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1. Agent being a mere connecting link binds the principal for all his acts done

within the scope of his authority.

2. The principal is liable for the acts of the agent falling not only within the actual

authority but also within the scope of his apparent authority.

3. When agent exceeds his authority and the part of what he does, which is

within his authority, can be separated from the part which is beyond his

authority, so much only of what he does as is within this authority, is

binding as between him and the principal. However, where agent does

more than he is authorized to do and what he does beyond the scope of

his authority cannot be separated from what is within it, the principal is

not bound by the transaction.

For example: agent is authorized to draw a bill for Rs. 1000 but he draws a

bill for Rs 2000, the principal will not be liable even to the extent of Rs.

1000

4. The principal will be liable even for misrepresentation made or frauds

committed by agent in the business of agency for his own benefit . But

misrepresentation made or fraud committed by agent in matters beyond their

authority do not affect their principals. (sec. 238) for example: A being Bs agent

for the sale of goods, induces C to buy them by a misrepresentation, which he

want nor authorized by B to make, the contract is voidable, as between B and

C, at the option of C.

5. The principal remain liable to the third parties even where his name was not

disclosed. The third parties, on discovering his name, can proceed against him

on the contract.

6. The principal is bound by any notice or information given to the agent in the

course of business transacted by him.

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7. The liability of the principal continues even in cases where agent is held

personally liable. And section 223 provides can option to the third parties to

either sue the principal or agent or both.

Personal liability of agent:

Agent is only connecting link between the principal and third party. Being only

medium he can in the absence of contract to the contrary neither personally

enforced contract enters into by him on behalf of his principal, nor his pe rsonally

bound by them.

From the above discussion it may inferred that agent can enforce contracts

personally and be held bound for contracts entered into on behalf of his

principal, if there is an agreement to the effect, express or implied.

Following cases where contracts to these effects shall be presumed to exist.

y Where the contract is made by the agent for the sale or purchase of goods for

the merchant resident abroad.

y Where the agent does not disclose the name of his principals.

y Where the principal though disclosed cannot be sued for instance where

principal is minor.

There are several modes of terminating an agency as follows: -

The relation of the principal and the agent is generally founded on the mutual

consent. It may be brought to an end by the same process with the originated it. i.e.

by agreement. The agency can be terminated at any time and at any stage by the

mutual agreement between the principal and the agent.

An agency may be terminated by the principal at any time by giving a notice to the

agent. If the agent is appointed to do a single act, the authority may be terminated at

any time before the act actually begun, the agency can only be terminated subject to

any claim which the agent may have for the breach of the contract.

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Moreover if the agent has already partly exercised his authority then also the agency

cant be terminated.

An agency may be terminated by an express renunciation on the part of the agent

after giving a reasonable notice to the principal.

Example draft of termination: -

Any of the parties may terminate this agreement by serving a notice of three months

to the other party. The accounts between the parties will be settled and adjusted

finally within the aforesaid period of three months.

The principal (owner of the company) who has made an agreement with the agent

can terminate the contract with 90 days prior written notice to the agent at any time

but it should not affect the rights of agent to any compensation to which it is entitled

with respect to introduced party to introduced to principal in writing prior principal

receipt of cancellation.

Understanding of sale of good act

The sale of goods act is complimentary to Contract Act. Basic provision of Contract

act applies to contract of Sale of goods also. Basic requirements of Contract i.e. offer

and acceptance, mutual consent, parties competent to contract, free consent, lawful

object, consideration etc. also apply to contract of sale of goods. The sale of Goods

Act applies only to movables than actionable claims and money and not to

immovables which are governed by the Transfer of property Act 1882.

It states that sale takes place when the seller transfers the ownership of goods to the

buyer for a money consideration.

Agreement to Sell: It means a contract under which the transfer of property in goods

is to take place in the future date or some conditions have to be fulfilled.

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It also describes what is price under a contract. Price means the money

consideration for sale of goods. If price is not fixed or capable of being fixed than the

contract is void.

According to section 9, The price may be :-1) Agreed to fixed in a manner provided by the contract2) Either fixed by the contract.3) Determined by the course of dealings between the partie s.

Essentials of a contract of sale

1. Two parties: there must be two distinct parties i.e. a buyer and a seller, to

affect a contract of sale and they must be competent to contract. Buyer

means a person who buys or agrees to buy goods [sec. 2(1)]. Seller means a

person who sells or agrees to sell goods [sec. 2(3)].

For instance: FMCG co is a seller and distributors are buyer

2. Goods: there must be some goods the property in which is or is to be

transferred from the seller to the buyer. The goods which form, the subject

matter of the contract of law must be movable. Contract of immovable

property is not regulated by the sale of goods act

For instance: in FMCG goods which are for sell are considered as goods

where as distributors service is not a good.

3. Price: the consideration for the contract of sale called price, must be money.

When goods are exchanged for goods, it is not a sale but barter. There is

nothing to prevent the consideration form being in money and partly in goods.

4. Transfer of general property: there must be transfer of general property as

distinguish from special property in goods from the seller to the buyer. If A

owns certain goods, he has general property in the goods. If he pledge them

with B, B has special property in the goods.

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5. Essential of valid contract: all the essential element of a valid contract must be

present in the contract of sale.

If price is not capable of being fixed in any of the above ways than the buyer is

bound to pay a reasonable price . reasonable price will vary from case to case.

However the market price may be a reasonable price.

If the price is to be fixed by a third party and the party doesnt make the valuation of

the goods the agreement is avoided. But if the goods have been delivere d before

this knowledge then the buyer will pay a reasonable price for the delivered goods

In a contract, parties make certain condition i.e. agree to certain term. All the

condition cannot be treated on the same footing. Some may be intended by the

parties to be of a fundamental nature. E.g. quality of the goods to be supplied, the

breach of which, therefore, will be regarded as a breach of the contract or. Some may

be intended by the parties to be bid ing but of a inferior character.

E.g. time of payment, which will no put an end to the contract. But will make the party

committing the breach liable to damages. The former condition are called

conditions and the later warranties

Few sections of sale of goods act explain when property passes from the hands of

the seller to the hands of the buyer and the risk for the goods.

If the goods are ascertained and in deliverable state, the property passes at the time

of the contract and the deliverable states means that the goods are in such a state

that the buyer would under the contract be bound to that their delivery.

On specific goods which are in deliverable state, if the seller wants to works on the

goods for weighing, measuring, testing the goods etc. For deciding the price of the

goods then the property of the goods does not pass hands unless and until the

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process if finished. But if the buyer wants to do the work by himself for his own

satisfaction then the property will be transferred when the goods are ready.

If the goods are unascertained or future goods the property of the goods does not

pass till the time the goods are ascertained.

The risk on the goods is liability of the seller till the property is transferred to the

buyer. When the property is transferred to the buyer the risk is liability of the buyer.

But if the delivery has been delayed either by the buyer to the seller the risk will be

taken by the respective party of sale because of whom the loss of goods occurred

Generally a seller sells only such goods of which he is the owner. Sometimes hemay sell some goods of which actually he is not the owner. If this is the case the

buyer may come into a fault of which he has paid the price. The rule is that the seller

cant sell the goods of which he is not the actual owner. If the seller is not the owner,

then the buyer will also not become the owner. The title of the buyer & seller will be

the same.

For e.g.1. if A has stolen some stolen goods of B & C purchases it with good faith, C will

not get title of goods and the true owner has the right to get back his goods.

2. If a sale has been made by a mercantile agent of which he is not the original

owner then the title of goods can be passed to the buyer if the seller was in

possession of the goods with the consent of the owner, & if the sale was

made by the seller acting as a mercantile agent.

3. If there are several joint owners in possession of goods, and oneof the joint owner has sole possession of one of the goods, then

with the permission of others the goods can be transferred to

any person who buys it from such a joint owner.

4. If the buyer buys goods by a seller who has obtained possession of the goods

under a contract which has been void under Coercion,. Fraud,

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Misrepresentation & Undue Influence, then the buyer would acquire a good

title of the goods provided it has been void until the time of sale.

5. If a seller sells goods to a buyer but continues to be in possession of the

goods or title of them, he may sell it to a thitd person, and if the person takes

the delivery of goods without knowing about the previous sale, he would have

a good title of them.

6. if a buyer with the consent of the seller obtains the possession of goods

before the property has passed to him, and if he sells to a third person, and if

such person obtains it without the knowledge of the original seller, then he

would get a good title of them.

When a unpaid seller who has exercised his right of stoppage in transit, and if he

sells the same goods to another buyer, the buyer acquires a good title to the goods

Duties of seller and buyer: It is the duty of the seller to deliver the goods and of the

buyer to accept and pay for them, in accordance with the terms of the contract of

sale which is a legal contract on exchange of goods, services or property to be

exchanged from the seller or the vendor to the buyer or the purchaser for an agreed

value in money paid or the promise to pay the same. It is a specific type of legal

contract. It is where the seller transfers or agrees to transfer the property in goods tothe buyer for a money consideration, called the price.

Payment and delivery are concurren t conditions: Unless otherwise agreed,

delivery of the goods and payment of the price are concurrent conditions, that is to

say, the seller shall be ready and willing to give possession of the goods to the buyer

in exchange for the price, and the buyer sha ll be ready and willing to pay the price in

exchange for possession of the goods.

Delivery: Delivery of goods sold may be made by doing anything which the parties

agree shall be treated as delivery or which has the effect of putting the goods in the

possession of the buyer or of any person authorized to hold them on his behalf.

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Delivery basically means voluntary transfer of possession of goods from one person

to another.

y Delivery goods may be:

o Actual delivery - Delivery is said to be actual where the goods are

physically handed over to the buyer or his authorized agent. For

example, X sells to Y 100 bags of wheat lying in Zs warehouse. X

orders Z to deliver the wheat to Y, and Z delivers to Y. In this case,

there is an actual delivery of goods.

o Symbolic delivery - Delivery is said to be symbolic where some

symbol of real possession or control over the goods is handed over to

buyer. For example, X sells to Y 100 bags of wheat lying in Zs

warehouse and hands over the key of Zs warehouse to Y. In this case ,

there is symbolic delivery of goods.

o Constructive delivery Delivery is said to be constructive where a

person who is in possession of the goods, acknowledges to hold the

goods on behalf of the buyer. For example, X sells to Y 100 bags of

wheat lying in Zs warehouse. Y orders Z to deliver the wheat to Y, and

Z agrees to hold the 100 bags of wheat on behalf of Y and makes the

necessary entry in his books. In this case, there is constructive delivery

of goods.

Rules as to delivery:

(1) Whether it is for the buyer to take possession of the goods or for the seller to

send them to the buyer is a question depending in each case on the contract,

express or implied, between the parties. Apart from any such contract, goods sold

are to be delivered at the place at which they are the time of the sale, and goods

agreed to be sold are to be delivered at the place at which they are at the time of the

agreement to sell, if not then in existence, at the place at which they are

manufactured or produced.

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(2) Where under the contract of sale the seller is bound to send the goods to the

buyer, but no time for sending them is fixed, the seller is bound to send them within a

reasonable time.

(3) Where the goods at the time of sale are in the possession of a third person, thereis no delivery by seller to buyer unless and until such third person acknowledges to

the buyer that he holds the goods on his behalf.

(4) Demand or tender of delivery may be treated as ineffectual unless made at a

reasonable hour. What is a reasonable hour is a question of fact.

(5) Unless otherwise agreed, the expense of and incidental to putting the goods into

a deliverable state shall be borne by the seller.

Rules as to delivery of goods:1. Mode of delivery2. Delivery and payment-concurrent condition3. Buyer to apply for delivery4. Place of delivery5. Time of delivery6. Goods in possession of a third party7. Cost of delivery8. Delivery of wrong quantity9. Installment deliveries

Delivery of wrong quantity:

Where the seller delivers to the buyer a quantity of good l ess than he contracted to

sell, the buyer may reject them, but if the buyer accepts the goods so delivered he

shall pay for them at the contract rate.

Where the seller delivers to the buyer a quantity of goods larger than he contracted

to sell the buyer may accept the goods included in the contact and reject the rest, or

he may reject the whole. If the buyer accepts the whole of the goods so delivered, heshall pay for them at the contract rate.

Where the seller delivers to the buyer the gods he contract t o sell mixed with goods

of a different description not included in the contract, the buyer may accept the

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goods which are in accordance with the contract and reject the rest, or may reject

the whole.

The provisions of this section are subject to any usage of trade, special agreement

or course of dealing between the parties.

Risk where goods are delivered at distant place: Where the seller of goods

agrees to deliver them at his own risk at place other than that where they are when

sold, the buyer shall, nevertheless, unless otherwise agreed, take any risk of

deterioration in the goods necessarily incident to the course of transit.

Buyers right of examining the goods: Where goods are delivered to the buyer

which he has not previously examined, he is not deemed to have accepted them

unless and until he has a reasonable opportunity of examining them for the purpose

of ascertaining whether they are in conformity with the contract.

Unless otherwise agreed, when the seller tenders delivery of goods to the buyer , he

is bound, on request, on request, to afford the buyer a reasonable opportunity of

examining the goods for the purpose of ascertaining whether they are in conformity

with the contract.

Buyer not bound to return rejected goods: if the buyer find fault in the goods

which he has received, he can reject the goods, which he has the right. It is not

necessary on part of the buyer to deliver the goods back to the seller, it is sufficient if

he intimates to the seller that he refuses to accept them.

Liability of buyer for neglecting or refusing delivery of goods. - When the seller

is ready and willing to deliver the goods and requests the buyer to take delivery, and

the buyer does not within a reasonable time after such request take delivery of the

goods , he is liable to the seller for any loss occasioned by his neglect or refusal to

take delivery and also for a reasonable charge for the care and custody of the goods.

Right of stoppages in transit: its happen only during the transit, the question of

duration of great significance. When goods are deemed to be in course of transit

from the time .the transit comes to an end in the following situation.

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i) when the goods reach the hands of buyer or his agent then transit comes

ii) if the buyer or his agent obtains delivery of the goods before their destination .

iii)if the goods are rejected by the buyer and the carrier or other bailee continues to

hold them, even if the seller has refused to received them back.

In other word we can say its the right of stopping the goods in transit after the

unpaid seller has parted with the possession of the goods. it is possible when;

Right of resale:- the notice of resale to buyer , whenever is necessary except when

goods are of a perishable nature .in case the seller resells the goods without giving

the notice to the buyer, he shall not be entitled to recover damages from the buyer

for any loss on resale.

Remedies for breach of contract :-

1.suit for price-under suit for price a seller sell to goods and pass to buyer and the

buyer wrongfully neglect or refuses to pay the price ,the the seller can sue the buyer

for the price of goods.

2.suit for damages for non- acceptance in this when the property in the goods has

not pass to buyer and the price was not payable without passing of property, the

seller can only sue for damages and not for the price.

3. suit for interest-the interest may be calculated from the data of the tender of

goods or from the date on which the price was payable.

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Understanding Arbitration

Arbitrator is a technically name of a person selected with reference to an established

system for friendly determination of controversy which, though not judicial, yet is

regulated by law; so that the powers and duties of the arbitrator, when once he ischosen, are prescribed by law, and his doings may be judicially revised if he has

exceeded his authority. Thus, the arbitrator is a privat e, disinterested person, chosen

by the parties to a disputed question, for the purpose of hearing their contentions,

and giving judgment between them, to whose decision, called "award", the litigants

submit themselves either voluntary, or, in some cases, c ompulsorily, by order of

court.

Requirements of an Arbitration Agreement

y Section 7(3) of the Act requires that the arbitration agreement must be in

writing.

y Section 7(2) provides that it may be in the form of an arbitration clause in a

contract or it may be in the form of a separate agreement.

y Under Section 7(4), an arbitration agreement is in writing, if it is contained in:

(a) a document signed by the parties

y (b) an exchange of letters, telex, telegrams or other means of

telecommunication, providing a record of agreement

y (c) or an exchange of claims and defense in which the existence of the

agreement is alleged by one party and not denied by the other.

y In section 7(5), it is provided that a document containing an arbitration clause

may be adopted by "reference", by a contract in writing.

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Model Arbitration Agreement

y "All and any disputes arising out of or in connection with the present

agreement shall be finally settled under the UNCITRAL Model Rules of

Arbitration (or another arbitration rules of your choice) by sole (or three)

arbitrator (s) appointed by _________ (an arbitration institute of your choice)

in accordance with the said Rules. The place of arbitration shall be _____.

The arbitration shall be conducted in ______ language. The arbitration award

shall be final and binding. The arbitration shall be governed under the laws of

______. "

Excise duty

Schedule to Constitution empowers Central Government to impose levy of excise on

goods manufactured or produced in India.

Excise Duty liability is generally on manufacturer, but in some cases, duty is

collected from others also. Duty liability is no manufacturer, though he can collect it

from buyer. He will be liable even if he does not collect

Basic excise duty is levied is generally 10% w.e.f. 27 -2-2010 i.e. total 10.3%

including education and Secondary And Higher education cess

As per judicial interpretation, for purpose of levy of Excise dut y, an article must

satisfy two requirements to be goods i.e. (a) it must be movable and (b) it must be

marketable. However, actual sale is not necessary.

Goods includes any article, material or substance which is capable of being bought

and sold for a consideration and such goods shall be deemed to be marketable

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Maharashtra VAT Schedule

As per VAT act tax is applicable as the schedule amemded w.e.f. 01.02.2006.

Schedule A Rate of tax is NIL

Schedule B Rate of tax is 1 %

Schedule C Rate of tax is 4 %

Schedule D Rate of tax is 20% or above

Schedule E Rate of tax is 12.50 % (For goods not covered elsewhere)

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DISTRIBUTORSHIP AGREEMENT

On this day on ______________, M/s Zesco India Limited with its sales office at

328, Laxmi Plaza, Off New Link Road, Andheri (W), Mumbai 400 053. Hereinafter

referred to as the Company enters into an agreement with

M/s. Pan India Pvt. Ltd having its Regd. Office at 504-510, RNA Arcade,

Lokhandwala, Andheri ( West, Mumbai- 400061. Hereinafter referred to as the

Distributors for their appointment as Distributors for the area for the area of

Mumbai to distribute the F.M.C.G. products.

WHEREAS

A. The Company deals in FMCG product with cold drink named as spirit.

B. The distributor is in the business of marketing and distributing various FMCG

products in Maharashtra.

C. The company wishes to appoint the Distributor as the exclusive Distributor for

its specified product on certain terms and condition.

NOW THIS AGREEMENT WITNESSETH AND IT IS HEREBY AGREED TO

BETWEEN THE PARTIES AS FOLLOWS

1. Appointment

The Company appoints the Distributor and the Distributor accepts the

appointment as an authorized Distributor of the company for distributing its

product in the Territory more particularly written in Schedule I enclosed

and forming part of this Agreement on an exclusive basis. It is distinctively

understood that the Distributor will be exclusive Distributor of the company

for the product

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2. Term of Appointment

The agreement is valid for period of 12 months from the Effective Date and

therefore after the Agreement will be renewed automatically for the further

term of 12 months, unless terminated by either party according to the

termination Clause in the Agreement.

3. Duties of the company

3.1 The Company shall provide the Distributor with adequate data, brochure s,

instruction manuals etc, to assist the Distributor in promotion and sale of the

product. The same shall be provided as and when required by the Distributor.

3.2 The Company shall ensure that the Product is delivered as per the stipulated

delivery schedule.

3.3 The company shall comply with all the applicable laws such that are

applicable towards the products.

3.4 Ensure that Distributor receives all appropriate and necessary: Company

product and process information including:

i. Product information;

ii. Pricing information; and

iii. Key contact details.

4. Duties of the Distributor

4.1 The distributor shall put his best efforts to sell the products of the company

4.2 The Distributor and the Company shall lay down quarterly targets of sale

distributors of Companys specified products to be affected by the Distributor

and the same shall be reviewed by the 7th day of the month following the end

of each quarter.

4.3 The Distributor shall ensure that the goods are delivered to the reseller within

the stipulated delivery time.

5. Ordering of Products

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i. For the purpose of this Agreement the quarter shall mean that period of

3 months commencing on every 1st January, 1st April, 1st July and 1st

October. The Distributor shall place the order on the Company on or

before 15th of current month for the next month. The Company shall

issue acceptance of order within 7 days of the receipt of the order.

ii. The Distributor shall release a firm purchase order for purchase of the

products from the Company. The Company shall make all the

shipments in accordance to the purchase order. Delay in dispatch of

over 7 days or more than the scheduled date shall require the

distributors confirmation before dispatching the consignment.

Distributor can request and Company will at Distributors request agree

for change of Delivery date at any time till the goods are physically

dispatched by the Company.

iii. If the Product is found to be defective /damaged on arrival then the

same would be replaced by Company with a new unit and Distributor is

not liable to pay additional cost for the same.

iv. All orders shall be in writing and in English language duly signed and

dated by the Authorized Signatory of the Distributor, an d the same may

be sent by fax and/or Email

6. Stock Rotation, Price Protection, etc.

6.1 Right of return:- Distributor may throughout the term of this agreement,

without limitation, return to company any Product for full credit of the Product

original invoice price.

6.2 Price change notification. For any change in price of the Product the company

shall give at least 15 days advance notice to the distributor. The distributor

shall maintain 15 days stock of companies to products for sale at his own cost

and shall not pledge the stock to bankers or other creditors without obtaining

the prior consent from the Principals in writing. The Principals may grant

consent for the pledge of the stock subject to terms and conditions and the

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distributor shall abide by such terms and conditions and bring the same to the

notice of the bankers or creditors.

7. Pricing and Payment

7.1 The distributor shall fix the retail price in consultation with the Principal from

time to time and make the sale of the company's products against cash

memos.

7.2 Prices do not include transportation costs which shall be borne by the

distributor himself.

7.3 Prices do not include state or local taxes applicable to the products sold under

this agreement.

7.4 The distributor shall be entitled to retain a commission of thirty percent (30%)

of gross receipts through sale of the product.

8. Title

8.1 The title of the products will be transferred from the Principal to the Distributor

upon the receipt of the products in distributors warehouse or payment of the

bill, whichever is earlier.

9. Risk Of Loss

9.1 Risk of loss or damage to the products passes on to the Distributor upon

receipt at Distributors Warehouse.

10. Warranty

10.1 The Company will offer 100% replacement warranty for all its products sold

through the Distributor for manufacturing defects only. The Company hereby

agrees to bear all the expenses for delivering the defective Products to the

Company and no amount will be billed to the Distributor on this account.

11. Confidentiality

11.1 Any information exchanged between the Company and the Distributor shall

be treated as confidential. Both the parties shall hold such information in trust

and confidence and shall not use the same except in furtherance of the

interests of both the parties as mentioned in this Agreement. Both the parties

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shall not publish, disclose or disseminate it except on the written

authorization of the other party. This clause shall not apply to any information

which previously known to either party or information which is public

knowledge.

12. General

12.1 The distributor shall work carefully and in a business like manner for the

promotion and sale of the products of the company.

12.2 If any modifications to be made with respect to the agreement would be

made only by a written amendment which must be duly signed by both the

parties.

12.3 The distributor shall not make any publicity or advertisement without the

consent of the principal.

12.4 After the termination of the agreement the distributor shall handover to the

Company all records, manuals, documents, circulars, etc. and all the other

related articles provided by the company.

12.5 The rights under this agreement shall not be assigned or transferred to any

other person, with the prior permission of the company or the principal.

12.6 The Distributor shall always keep the goods delivered to them by theCompany insured during transport and storage. The company will not be

liable for any loss occurred due to unpredictable happenings.

13. Termination of Agreement

13.1 Any of the parties may terminate this agreeement by giving a notice of 30

days prior to the termination. If either of the party commit s a breach of any of

the provisions in the agreement and fails to find any of the remedy within 7

days upon receipt of a notice given by the other party, the agreement will be

terminated. If either of the parties terminates the agreeement for any reason,

the Principal shall take all the stocks of the products that is remaining with the

distributor. The accounts between the parties will be settled and adjusted

immediately after the termination of the agreement.

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14. Dispute

14.1 In case of any dispute arises between the principal and the distributor in

connection with the agreement , the same shall be referred to the arbitrators.

The principal and the distributor, both, will be appointing an arbitrator for each

parties & there will be a sole arbitrator for both of th ese arbitrators mutually

agreed by them. The proceedings held by the arbitrator will be according to

the Arbitration and Conciliation Act, 1996. The decision of the arbitrator shall

be final and binding on both the parties.

15. Notice

15.1.Any notice or purchase order required to be given under the Agreement shall

be in writing and shall be sent to the other party either by fax or by registered

post or by courier as follows:-

15.1.1. To - Attention Mr. Rakesh Dugar Director.

Fax +91 22 25006660

15.1.2. To Zesco India Limited

Address : Block no 3, Laxmi Industrial Estate,

New link road, Kandivali (west),

Mumbai 400067.

Attention Mr. Krishna Sharma Director

Fax + 91 22 6363865

IN WITNESS WEHREOF THE PARTIES HERETO HAVE DULY EXECUTED

THESE PRESENTS THE DAY AND THE YEAR FIRST HEREIN ABOVE WRITTEN

For Zesco India Limited For Pan India Pvt. Ltd

Name Mr Krishna Sharma Name Rajeev Mukherjee

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Title Director Title Director

Date Date

Witness Witness

Name Name

Title Title

SCHEDULE I

Territory : Geographical territory of Mumbai district

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Agreement between Principal and agency

On this day on ______________, M/s Zesco India Limited with its sales office at

328, Laxmi Plaza, Off New Link Road, Andheri (W), Mumbai 400 053. hereinafter

referred to as the Company enters into an agreement with

M/s. Pan India Pvt. Ltd having its Regd. Office at 504-510, RNA Arcade,

Lokhandwala, Andheri ( West, Mumbai- 400061. hereinafter referred to as the Firm

for their appointment as agency for the area to sell the F.M.C.G. products.

The Company is carrying on business of manufacturing aluminum wraps known by

the trade

name of fresho aluminum

4. It is proposed to enter into this agreement recording the said terms and conditions.

NOW IT IS AGREED BETWEEN THE PARTIES HERETO AS FOLLOWS:

1. Appointment

The Company hereby appoints the Firm as the Sole Selling Agent of the Company

for the sale of Fresho manufactured by the Company in the Territory more

particularly defined in Schedule I enclosed and forming part of this Agreement on

an exclusive basis. It is distinctively understood that the Agency will be exclusive

agency of the company for the products as specified above. However the Company

will be entitled to sale or distribute Products through Web Sale i. e. selling through

the Web enabled online shopping portals.

.

2. Terms of Appointments

The agreement is valid for period of 2 years from the Effective Date and therefore

after the Agreement will be renewed automatically for the further term of 12 months,

unless terminated by either party according to the termination Clause in theAgreement.

3. Commission

The Company shall pay to the Firm a commission at the rate of 20 percent on the

sale price of Fresho for every unit sold by the Firm in the said State.

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4. Duties and Responsibilities of the Agent

Duties

1. The Fresho will be sold on the trade mark or trade nam e of the Company and no

change or tampering with the same will be made.

2. The Firm shall provide shops, godowns or storerooms for stocking Fresho received

from the Company and keep them safe and in good condition.

3. The Firm will not sell aluminum wrapsof any other manufacturer in the said

State.

4. The Firm shall make best endeavor to promote sale of the company's

products in the State and shall properly advertise the sets through different

media of publicity such as newspapers, cinema theatre, posters in the Statebut the Firm will not make advertising publicity through Television or Radio

5. The Firm shall act faithfully and diligently with the Company and disclose all

complaints received by them from the customers to the Company.

6. The Firm shall sell Fresho to genuine customers in the State and not to any

party for re-sale of the same outside the said State.

Responsibilities

1. The Firm shall keep informed the Company about the market position of the sale of

Fresho in general and from time to time.

2. The Firm shall maintain accounts of the sale of the Company's product and the

same will be open for inspection by the Company whenever required.

5. Duties and Responsibilities of the Principal

Duties1. The Company agrees that if the Company receives any orde r for supply of

Fresho from any party from the said State direct, the same will be sent to the

Firm for being complied with. The Company, however reserves the right to

sell the product to any particular person in that State as a special case.

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Responsibilities

1. If Fresho manufactured by the Company undergo any change in technique or

design the firm will be entitled to return to the Company the old products sets

remaining unsold till the Company supplies new pieces in their place.

6. Termination

Any party will be entitled to cancel this agreement by giving prior notice of at

least 3 months to the other party in any of the following events.

1. If the other party commits breach of any term of this agreement.

2. If the other party being the Company, goes into voluntary liquidation or is

ordered to be wound up by a court of law.

3. If the other party is the Firm, the Firm being dissolved.

4. If the other party ceases to carry on the business of Fresho.

5. If the Firm is guilty of any conduct which the Company feels prejudicial to theinterest of the Company and in this matter the Board of Directors of the

Company will be the sole judge.

On the termination of this agreement for any reason the Firm shall return all

the unsold Fresho of the Company to the Company and render account of

the dealings since the settlement of the accounts from the last previous

period till the cancellation of this agreement.

7. Compensation & Indemnity

The Company shall insure and keep insured all Fresho supplied to the Firm so long

as they are within the custody of the Firm or are in transit from the Company to the

Firm against loss or damage by any reason whatsoever.

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8. Delegation

The Firm shall be entitled to appoint sub -agents at different places in the said State

on such terms and conditions as may be agreed upon between them but such

agreements will be subject to the terms and conditions hereof. The Company will not

be responsible for or concerned with the dealings between the Firm and its sub -

agent. The Firm will continue to remain liable to account to the company in respect of

the dealings between the Company and the Firm. The transport charges for carrying

the sets from the shop or go down of the Firm to the shop or go down of any sub-

agent will be borne by the Firm or as may be agreed between the Firm and the sub-

agent but the Company will not be liable for the same.

The Firm shall not assign the benefits and rights under this agreement except by

way of sub-agency to any other person without the consent of the Company.

Similarly the Company will not appoint any agent, for sale or to sell any set in the

said State directly or without the consent of the Firm.

9. Arbitration

In the event of any dispute or difference between the parties hereto, regarding the

interpretation or meaning of any provision of this agreement or regarding any claim

of one party against the other or regarding any other matter arising out of this

agreement, the same will be referred to arbitration of a common Arbitrator if agreed

upon or otherwise to two arbitrators, one to be appointed by each party and the

arbitration will be governed by the Arbitration Act for the time being in force.

If any dispute arises with any customer or with the sub-agent of the Firm, the same

will be communicated to the Company immediately.

10. General

1. The Firm shall open a separate Bank account in their name with any Bank

and in which only the moneys received and spent under this contract shall be

credited and debited. All payments to be made and expenses to be incurred

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will be drawn from such account as far as possible.

2. The Firm will deposit and keep deposited with the Company a sum of Rs

100000 as security for the performance of this contract and the same will be

refunded to the Firm without interest on the determination of this agreement,subject to deduction of any amount payable by the Firm to the Company

under or by virtue of this Agreement.

3. The agreement is executed in duplicate and one copy hereof will be kept by

the Company and the other by the Firm.

4. The Fresho will be supplied by the Company to the Firm as per the orders or

requirement received by the Company from the Firm in writing. The sets will

be transported by the Company from its factory to the place or places

required by the Firm and the transport charg es and insurance, will be paid by

the Firm or the transport charges will be added to the Company's factory price

payable in respect of products so dispatched. The Firm can add the transport

charges to the price of Fresho Proportionately.

11. Jurisdiction

1. For any suit or legal proceeding arising out of this agreement only the courts

at Maharashtra shall be the courts having jurisdiction to entertain and try the

same.

2. If any suit or legal proceedings are taken in any court in the said State to The

knowledge or information of the Firm against the Company or the Firm or its

sub agent, the Firm shall immediately furnish all information and papersrelating thereto and available with the Firm to the Company.

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12. Pricing

1. The Fresho will be sold by the Firm at the price that will be fixed by the

Company or that State on the basis of the factory price, together with

the transport charges, sales tax, octroi and other duties and taxes

payable. Such price will be fixed by the Company as far as possible in

consultation with the Firm from time to time. The product will not be

sold by the Firm for any price higher than the price so fixed.

2. The Firm shall sell Fresho on cash basis and not on credit. If the Firm

sells any set or sets on credit, the price thereof payable by the Firm to

the Company will be payable and paid irrespective of whether the Firm

has received the price from the customer or not.

13. Warranty

1. The Firm shall not give any warranty as to quality of the sets sold to the

customers other than the warranty given by the Company.

2. If the Firm receives any complaints regarding any defects in

manufacture, the Firm shall intimate the same to the Company. If the

defect is found genuine, the Firm can substitute another product for the

defective product and the defective product will be returned to theCompany at the cost of the Company and the adjustment of the price

thereof will be made in the accounts. However, no product sold will be

taken back after the guarantee period is over.

Schedule I

Territory: geographical territory of Mumbai district

8/7/2019 LAW SUBMIT

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Conclusion:

To decide on which of the two agreements is better will depend on the

circumstances and what you are trying to achieve. Considerations include:

1. what agents or distributors there are already in existence with access to your

target customers;

2. whether you want to keep close control over marketing methods (for example

where brand image is particularly important);

3. what rights and responsibilities you want to be included in your agreement

with the agent or distributor;

4. How much control you want to have over the sale of your products. Whilst it is

unlawful to fix resale prices under a distribution arrangement, when selling via

an agent you remain free to set your resale prices; and

5. What type of relationship you want to have with the end user. If it is important

that you have a close relationship with the end user (e.g. because the product

requires a specialized after-sales service), you may prefer an agency

arrangement.

Agents are often preferable for making high value, complex or bespoke sales. You

will also need to use an agent if you want to sell a service which you must deliver.

Distributors, such as wholesalers, are often used for making lower value sales of

relatively straightforward products. In addition, the commission paid to an agent is

usually lower than the margin which a distributor will earn (largely because of the

additional risk that the distributor takes ).