Foods pvt.

7/27/2019 Foods pvt.

1/21

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


2/21

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


3/21

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


4/21

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


5/21

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


6/21

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:


7/21

(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


8/21

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.


9/21

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


10/21

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


11/21

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:


12/21

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


13/21

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


14/21

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.


15/21

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.


16/21

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


17/21

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


18/21

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


19/21

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.


20/21

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.


21/21

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

Foods pvt.

Documents

Transcript of Foods pvt.