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MODEL FORM OF INTERNATIONAL AGENCY CONTRACT
(ICC COMMERCIAL AGENCY CONTRACT)
Between________________________________________________________________
whose registered office is
at______________________(hereinafter called "the Principal")
and___________________________________________________________________
whose registered office
at__________________________(hereinafter called "the Agent")
IT IS AGREED AS FOLLOWS
Art. 1 Territory and Products
1.1. The Principal appoints the Agent, who accepts, as his
commercial agent to promote the sale of the products listed in
Annex 1, §1 (hereinafter called "the Products") in the
territory defined in Annex 1, §2 (hereinafter called "the
Territory").
1.2. If the Principal decides to sell any other products in
the Territory, he shall inform the Agent in order to discuss
the possibility of including them within the Products defined
under article 1.1. However, the above obligation to inform the
Agent does not apply if, in consideration of the
characteristics of the new products and the specialization of
the Agent, it is unreasonable to expect that such products may
be represented by the Agent (e.g. products of a completely
different range).
Art. 2 Good faith and fair dealing
2.1. In carrying out their obligations under this agreement
the parties will act in accordance with good faith and fair
dealing.
2.2. The provisions of this agreement, as well as any
statements made by the parties in connection with this agency
relationship, shall be interpreted in good faith.
Art. 3 Agent's functions
3.1. The Agent agrees to use his best endeavours to promote
the sale of the Products in the Territory in accordance with
the Principal's reasonable instructions and shall protect the
Principal's interests with the diligence of a responsible
businessman.
3.2. The Agent shall not solicit orders from outside the
Territory unless permitted to do so by the Principal. Where
the Agent negotiates with customers in the Territory business
which results in contracts of sale with customers established
outside the Territory11, article 15.2. shall apply. E.g. for
goods to be sold to subsidiary established in another country:
the agent is acting within his territory, hat the sale is made
to a foreign customer, and the agent would have (in absence of
article 15.2) no right to commission.
3.3. Unless otherwise specifically agreed, the Agent has no
authority to make contracts on behalf of, or in any way to
bind the Principal towards third parties. He only solicits
orders from customers for the Principal, who is free (save as
set forth in article 4.2. hereafter) to accept or to reject
them. The other alternative, i.e. to give the agent the
authority to conclude contracts on behalf of the principal has
not been considered in the model form, since it is rather
uncommon in international trade. Of course, if the parties
have special reasons for permitting the agent to make
contracts on behalf of the principal, they can so provide in
article 3.3. It should be noted that in certain cases the
third party (customer) may rely on the apparent authority of
the agent this means that, especially in legal systems where
it is common that the agent is authorized to act on behave of
the principal, the exclusion of any such authority provided
for in the contract between principal and agent (like art.
3.3. of this model form) does not necessarily bind a third
party which had good reasons to rely on the apparent authority
of the agent. It is, therefore, recommended that the principal
avoids any action which may give third parties the impression
that the agent has representative powers, and that he informs,
if necessary and possible, third parties that the agent has no
authority to bind the principal.
3.4. When negotiating with customers, the Agent shall offer
Products strictly in accordance with the terms and conditions
of the contract of sale which the Principal has communicated
to him. This is to ensure that orders by the customers
conform to the Principals terms and conditions (e.g. prices,
delivery terms, etc.): if this is not the case (because the
agent has given incorrect information to the prospective
customer) the principal will be in an embarrassing situation
(at least from the commercial point of view) if the refuses
the order.
3.5. The Agent is not entitled to receive payments on the
Principal's behalf without prior written authorization from
the Principal to that effect. When the Agent has been so
authorized, he must transmit them as soon as possible to the
Principal and until then hold them separately on deposit on
the Principal's behalf.
Art. 4 Acceptance of orders by the Principal
4.1. The Principal shall inform the Agent without undue delay
of his acceptance or rejection of the orders transmitted by
the latter. The Principal may accept or reject any individual
order transmitted by the Agent at his own discretion.
4.2. The Principal may not however unreasonably reject the
orders transmitted by the Agent. In particular, a repeated
refusal of orders contrary to good faith (e.g. if made for the
only purpose of hindering the Agent's activity) shall be
considered as a breach of contract by the Principal.
Art. 5 Undertaking not to compete
5.1. Without the prior written authorization of the Principal,
the Agent shall not represent, manufacture or distribute any
products which are in competition with the Products, for the
entire term of this contract.
5.2. The Agent may represent, distribute or manufacture any
products which are not competitive with the Products, provided
he informs the Principal in advance of such activity. However,
the above obligation to inform the Principal does not apply
if, in consideration: (i) of the characteristics of the
products which the Agent wants to represent, and (ii) of the
field of activity of the principal for whom the Agent wishes
to act, it is unreasonable to expect that the Principal's
interests may be affected.
5.3. The Agent shall refrain from representing or distributing
non-competitive products of a manufacturer who is a competitor
of the Principal, if requested to do so by the Principal,
provided the latter's request is reasonable, taking into
account all the circumstances of the case. E.g. if there are
reasons to fear that the collaboration with a competitor may
impair the confidence between the parties or the protection of
confidential information.
5.4. The Agent declares that he represents (and/or distributes
or manufactures, directly or indirectly) the products listed
in Annex II on the date on which this contract is signed.
Art. 6 Sales organization, Advertising and Fairs
6.1. The Agent shall provide an adequate organization for
sales and, where appropriate, after-sale service, with all
necessary means and personnel, in order to ensure the
fulfillment of his obligations throughout the Territory under
this agreement.
6.2. The parties may agree on the advertising to be jointly
made in the Territory. The contents of any advertising must be
approved by the Principal. The cost of advertising carried out
by the Agent shall be apportioned between the parties as
indicated in Annex III, §1.
6.3. The parties shall agree on their participation in fairs
or exhibitions within the Territory. The cost of the Agent's
participation in such fairs and exhibitions shall be
apportioned between the parties as indicated in Annex III, §2.
Art. 7 Sales Targets-Guaranteed Minimum Target
A distinction is made between a "sales target" (7.1., 7.2.)
the non-attainment of which does not, in principle, involve a
contract breach, and o "guaranteed minimum target" (7.3.),
which implies a possible contract termination (or other
consequences) in case of non-attainment. If the parties wish
to agree upon such "guaranteed minimum target", they must fill
in Annex IV.
7.1. The parties may agree annually on the sales targets for
the forthcoming year.
7.2. The parties shall make their best efforts to attain the
targets agreed upon but the non attainment shall not be
considered as a breach of the contract by a party, unless that
party is clearly at fault.
7.3. In Annex IV the parties may agree on a Guaranteed Minimum
Target and on the consequences of its non-attainment.
Art 8 Sub-agents
(In certain circumstances it may be advisable to add a clause
providing that each party agrees not to engage subagents
and/or employees of the other party. )
The Agent may engage sub-agent. The Agent must carry out
agents, provided he informs his activity without recourse the
Principal at least one month before the engagement to
sub-agents. The Agent shall be responsible for the activities
of his subagents.
Art. 9 Principal to be kept informed
9.1. The Agent shall exercise due diligence to keep the
Principal informed about his activities, market conditions and
the state of competition within the Territory. He shall answer
any reasonable request for information made by the Principal.
9.2. The Agent shall exercise due diligence to keep the
Principal informed about: (i) the laws and regulations which
are to apply in the Territory to which the Products must
conform (e.g. import regulations, labeling, technical
specifications, safety requirements, etc.), and (ii) the laws
and regulations concerning his activity, as far as that they
are relevant for the Principal.
Art. 10 Financial responsibility
10.1. The Agent shall satisfy himself, with due diligence, of
the solvency of customers whose orders he transmits to the
Principal. He shall not transmit orders from customers of
which he knows or ought to know that they are in a critical
financial position, without informing the Principal in advance
of such fact.
10.2. The Agent shall act as a del credere agent only if, and
to the extent, the parties have expressly agreed thereto. In
that case they should complete and sign Annex V.
Art. 11 Principal's trademarks and symbols
11.1. The Agent shall use the Principal's trademarks, trade
names or any other symbols, but for the only purpose of
identifying and advertising the Products, within the scope of
this contract and in the Principal's sole interest.
11.2. The Agent hereby agrees neither to register, nor to have
registered, any trademarks, trade names or symbols of the
Principal (or which are confusingly similar with the
Principal's ones), in the Territory or elsewhere.
11.3. The right to use the Principal's trademarks, trade names
or symbols, as provided for under the first paragraph of this
article, shall cease immediately for the Agent, on the
expiration or termination, for any reason, of the present
contract.
11.4. The Agent shall notify the Principal of any infringement
of the Principal's trademarks, trade names or symbols that
comes to his notice.
Art. 12 Complaints by Customers
The Agent shall immediately inform the Principal of any
observations or complaints received from customers in respect
of the Products. The parties hereto shall deal promptly and
properly with such complaints. The Agent has no authority to
engage in any way the Principal, unless after he has received
a specific authorization to such effect.
Art. 13 Exclusivity
13.1. The Principal shall not, during the life of this
contract, grant any other person or undertaking within the
Territory the right to represent or sell the Products.
13.2. The Principal is however entitled to deal directly,
without the Agent's intervention (provided he informs the
latter) with customers situated in the Territory; in respect
of any sales arising therefrom, the Agent shall be entitled to
the commission provided for in this contract.
13.3. The Principal shall be entitled to deal directly with
the special customers listed in Annex VI, §2; in respect of
the sales to such customers the Agent shall be entitled to the
reduced commission provided for in Annex VI, §2. Paragraph
13.3. shall not apply if §2 of Annex VI (Special
customers/Reduced commission) has not been filled in by the
parties.
Art. 14 Agent to be kept informed
14.1. The Principal shall provide the Agent with all necessary
written information relating to the Products (such as price
lists, brochures, etc.) as well as with the information needed
by the Agent for carrying out his obligations under the
contract.
14.2. He shall furthermore inform the Agent without undue
delay of his acceptance, refusal and/or non-execution of any
business transmitted by the Agent.
14.3. The Principal shall keep the Agent informed of any
relevant communication with customers in the Territory.
14.4. If the Principal expects that his capacity of supply
will be significantly lower than that which the Agent could
normally expect, he will inform the Agent within a reasonable
time.
Art. 15 Agent's commission
15.1. The Agent is entitled to the commission provided for in
Annex VI, §1, on all sales of the Products which are made
during the life of this contract to customers established in
the Territory.
15.2. If the Agent, when dealing with customers established in
the Territory, solicits orders resulting in contracts of sale
with customers established outside the Territory, and if the
Principal accepts such orders, the Agent shall be entitled to
receive a reduced commission, the amount of which shall be
decided on a case by case basis. Similarly, the Agent's
commission shall be reduced when an other agent solicits
orders with customers established outside the Territory
resulting in contracts of sale with customers established
within the Territory.
15.3. A reduced commission may be agreed in advance between
the Principal and the Agent in appropriate circumstances where
a customer is to be granted terms or conditions which are more
favorable than the Principal's standard conditions. If the
parties have filled in §3 of Annex, VI the figures indicated
therein shall apply in the respective situations.
15.4. Unless otherwise agreed in writing, the commission
covers any expenses incurred by the Agent in fulfilling his
obligations under this contract (such as telephone, telex,
office, travel expenses, etc.)
Art. 16 Method of calculation commission and payment
16.1. Commission shall be calculated on the net amount of the
involves, i.e. on the effective sales price (any discount
other than cash discounts being deducted) clear of any
additional charges (such as packing, transportation,
insurance) and clear of all tariffs or taxes (including value
added tax) of any kind, provided that such additional charges,
tariffs and taxes are separately stated in the invoice.
16.2. The Agent shall acquire the right to commission after
full payment by the customers of the invoiced price. In case
of partial payment made in compliance with the sales contract,
the Agent shall be entitled to a proportional advance payment.
In case the Principal is insured against the risk of
non-payment by his customers, the parties may agree that a
commission be paid on the sums obtained by the Principal from
the insurer, by filling in Annex VI, 4.1.
16.3. The Principal shall provide the Agent with a statement
of the commissions due in respect of each quarter and shall
set out all the business in respect of which such commission
is payable. The commission shall be paid not later than the
last day of the month following the relevant quarter.
16.4. The Agent is entitled to all the information, and in
particular extracts from the Principal's books, in order to
check the amount of the commission due to him. The Principal
shall permit an independent auditor appointed for that purpose
by the Agent to inspect the Principal's books for the purpose
of checking the data relevant for the calculation of the
Agent's commission. The costs of such inspection shall be
borne by the Agent.
16.5. Should any governmental authorization (e.g. due to
exchange control regulations in the Principal's country) be
necessary for the Principal to transfer abroad the commission
(or any other sum the Agent may be entitled to receive), then
the payment of the amount shall be made after such
authorization has been given. The Principal shall take all
necessary steps for obtaining the above authorizations.
16.6. Except as otherwise agreed, the commission shall be
calculated in the currency of the sales contract in respect of
which the commission is due.
16.7. Any taxes imposed on the Agent's commission in the
Territory are for the Agent's account.
Art. 17 Unconcluded business
17.1. No commission shall be due in respect of offers or
orders transmitted by the Agent and not accepted by the
Principal.
17.2. If a contract made by the Principal as a result of
orders transmitted by the Agent is not thereafter put into
effect, the Agent shall be entitled to commission unless non
performance of the contract is due to reasons for which the
Principal is not responsible.
Art. 18 Term of the Contract
18.1. This contract is concluded 18.1. This contract enters
for an indefinite period ------- and enters into force on into
force on the -------- and shall remain in force ---------
until ---.
18.2. This contract may be 18.2. This contract shall be
terminated by either party by automatically renewed for notice
given in writing by successive periods of one means of
communication year, unless terminated by ensuring evidence and
date of either party by notice given receipt (e.g. registered
mail in writing by means of with return receipt, special
communication ensuring courier, telex), not less than evidence
and date of receipt 4 months in advance. If the (e.g.
registered mail with contract has lasted for more return
receipt, special courier, than five years, the period of
telex), not less than four than five years, the period of
telex), not less than four notice will be of 6 months. months
before the date of The end of the period of expiry, by
registered mail notice must coincide with the with return
receipt. If the end of a calendar month. contract has lasted
for more The parties may agree in than five years, the period
of writing on longer periods of notice will be of 6 months.
notice. The parties may agree in writing on longer periods of
notice.
Art. 19 Unfinished business
19.1. Orders transmitted by the Agent or received by the
Principal from customers established in the Territory before
the expiry or termination of this contract and which result in
the conclusion of a contract of sale not more than six months
after such expiration, shall entitle the Agent to commission.
19.2. No commission is due to the Agent for contracts of sale
made on the basis of orders received after the expiry or
termination of this contract, save if such transaction is
mainly attributable to the Agent's efforts during the period
covered by the agency contract and if the contract was entered
into within a reasonable period after the expiry or
termination of this contract. The Agent must however inform
the Principal in writing, before the expiry or termination of
this contract, of the pending negotiations which may give rise
to commission under this paragraph.
Art. 20 Earlier termination
20.1. Each party may terminate this contract with immediate
effect, by notice given in writing by means of communication
ensuring evidence and date of receipt (e.g. registered mail
with return receipt, special courier, telex), in case of a
substantial breach by the other party of the obligations
arising out of the contract, of in case of exceptional
circumstances justifying the earlier termination.
20.2. Any failure by a party to carry out all or part of his
obligations under the contract resulting in such detriment to
the other party as to substantially deprive him of what he is
entitled to expect under the contract, shall be considered as
a substantial breach for the purpose of article 20.1. above.
Circumstances in which it would be unreasonable to require the
terminating party to continue to be bound by this contract,
shall be considered as exceptional circumstances for the
purpose of article above.
20.3. The parties hereby agree that the violation of the
provisions --------------- under 18 of the present contract
is to --------------- be considered in principle, unless the
contrary is proved, as a substantial breach of the contract.
Moreover, any violation of the contractual obligations may be
considered as a substantial breach, if such violation is
repeated notwithstanding a request by the other party to
fulfill the contract obligations. The parties may make
reference here to those particles for which a breach is
consider of particular importance. This may be the case for
articles 5 (non competition), 7.3. (Guaranteed minimum target:
if agreed), 11.2. (unauthorized registration of the
principal's trademarks by the agent), 13.1. (grant of
exclusivity by the principal) and 15.1 (payment of commission
to the agent). It is recommended that the use of this article
should be limited to essential situations only.
20.4. Furthermore, the parties agree that the following
situations shall be considered as exceptional circumstances
which justify the earlier termination by the other party:
bankruptcy, moratorium, receivership, liquidation or any kind
of composition between the debtor and the creditors, or any
circumstances which are likely to affect substantially one
party's ability to carry out his obligations under this
contract.
20.5. If the parties have filled in Annex VII, the contract
may also be terminated by the Principal with immediate effect
in case of change of control, ownership and or management of
the agent- company, according to the provisions set forth in
Annex VII. 20.6. If a party terminates the contract according
to this article, the arbitrators ascertain that the reasons
put forward by that party did not justify the earlier
termination, the termination will be effective, but the other
party will be entitled to damages for the unjustified earlier
termination. Such damages will be equal to the average
commission for the period the contract would have lasted in
case of normal termination, unless the damaged party proves
that the actual damage is higher (or, respectively, the party
having terminated the contract proves that the actual damage
is lower). The above damages are in addition to the indemnity
which may be due under article 21.
Art. 21 Indemnity in case of termination
21.1. The Agent shall be en- 21.1. The Agent shall not be
titled to an indemnity ("good- entitled to an indemnity for
will indemnity") if and to the goodwill or similar extent
that: compensation 20 ("goodwill indemnity") in case of
a) he has brought the termination of the contract. Principal
new customers or This provision does not limit has
significantly increased the Agent's right to claim the volume
of business damages for breach of contract ness with existing
customers as far as the termination by and the Principal the
Principal amounts to such continues to derive a breach, and is
not already substantial benefits from covered by article 20.6.
the business with such customers, and
b) the payment of this indemnity is equitable having regard to
all the circumstances and, in particular, the commission lost
by the Agent on the business transacted with such customers.
21.2. The amount of the in indemnity shall not exceed a figure
equivalent to an indemnity for one year calculated from the
Agent's average annual remuneration over the preceding five
years and, if the contract lasted for less than five years,
the indemnity shall be calculated on the average for the
period in question.
21.3. The Agent will lose the right to indemnity if he does
not claim the indemnity in writing within one year from
contract termination.
21.4. The Agent shall have no right to indemnity in the
following cases:
a) where the Principal has terminated the contract according
to the conditions set out in article 20;
b) where the Agent has terminated the contract, unless the
termination is justified under article 20 or on grounds of
age, infirmity or illness in consequence of which the Agent
cannot reasonably be required to continue his activities;
c) where, in accordance with article 26.2, the Agent assigns
his rights and duties under the agency contract to another
person.
21.5. The goodwill indemnity provided for under this article
is in lieu of any compensation for loss or damage arising out
of the contract expiration or termination (except damages for
breach of contract).
In some countries, such as EEC countries which have adopted
the EEC directive or other countries with similar mandatory
rules, alternative A would violate mandatory requirements. 20
This broad definition is meant to cover any compensation to be
paid in case of contract termination independent from a breach
of contract by the Principal, including payments which are not
defined as an "indemnity", or "goodwill indemnity, see above,
§2 of the introduction.
Art. 22 Return of documents and samples
Upon expiry of this agreement the Agent shall return to the
Principal all advertising material and other documents and
samples which have been supplied to him by the Principal and
are in the Agent's possession.
Art. 23 Arbitration, Applicable law
23.1. Any dispute arising out of or in connection with the
present Contract shall be finally settled in accordance with
the Rules of Conciliation and Arbitration of the international
Chamber of Commerce by one or more arbitrators designated in
accordance to said Rules.
23.2. The arbitrators shall apply the provisions constrained
in this contract and the principles of law generally
recognized in international trade as applicable to
international agency contracts, with the exclusion - subject
to article 23.3. hereunder of national laws. If the Agent is
established within the EEC, the mandatory provisions of the
EEC Directive of 18 December 1986 shall also apply.
23.3. The arbitrators shall in any case consider such
mandatory provisions of the law of the country where the Agent
is established which would be applicable even if the parties
submit the agreement to a foreign law. The arbitrators will
take the above provisions into account to the extent they
embody principles which are universally recognized and
provided their application appears reasonable in the context
of international trade.
Art. 24 Automatic inclusion under the present contract
24.1. If the parties have not made a choice between the
alternative solutions provided in articles 8 and 18 under the
letters A and B, by deleting one of the alternatives, and
provided they have not expressly made a choice by other means,
alternative A shall be considered applicable.
24.2. If the parties have not made a choice between the
alternative solution provided in article 21 (goodwill
indemnity in case of termination) under the letters A and B,
by deleting one of the alternatives, and provided they have
not expressly made a choice by other means, alternative A
shall be considered applicable if the Agent is established in
a country where a goodwill indemnity in case of termination is
recognized by mandatory law and alternative B shall apply in
the opposite case.
24.3. The annexes attached to this contract form an integral
part of the agreement. Annexes or part of annexes which have
not been filled in will be effective only to the extent and
under the conditions indicated in this contract.
Art. 25 Previous agreements - Modifications - Nullity
25.1. This Contract replaces any other preceding agreement
between the parties on the subject.
25.2. No addition or modification to this contract shall be
valid unless made in writing. However a party may be precluded
by his conduct from asserting the invalidity of additions or
modifications not made in writing to the extent that the other
party has relied on such conduct.
25.3. The nullity of a particular clause of this contract
shall not involve the nullity of the whole agreement, unless
such clause is to be considered as substantial, i.e. if the
clause is of such importance that the parties (or the party to
the benefit of which such clause is made) would not have
entered into the contract if it knew that the clause would not
be valid.
Art. 26 Prohibition of assignment
26.1. The present contract cannot be assigned without prior
written agreement between the two parties.
26.2. If article 21 A is applicable, and if there has been
assignment by the Agent with the Principal's consent according
to article 21.4(c), the goodwill indemnity of the new agent
shall be calculated by also taking into account the activity
of the old agent, according to article 21. It is expressly
agreed that the amount that may have been paid by the new
agent to the previous one shall not be taken into account when
calculating the indemnity. The purpose of this sentence is to
make clear that the price paid by the new agent to the old one
(which price may be influenced by facts which are out of the
scope of the agency agreement), is not a basis for calculating
the indemnity.
Art. 27 Authentic text
The English text of this contract is the only authentic text.
Made in on the --------------- -----------
The Principal The Agent
_____________ ____________
If the contract is written in another language this clause
should of course be modified to indicate the language of the
contract.
ANNEX I PRODUCTS AND TERRITORY
(Article 1.1.)
§1. Products
_______________________________________________________________________
______________________________------------------------------------------------------------
If this paragraph 1 of Annex I has not been filled in, all
products manufactured and/or sold by the Principal at present
and in the future shall be considered as "Products" for the
purpose of this
contract.-------------------------------------------------------------
If the parties choose this solution (including any future
products in the contract) problems may arise in case of
conflict between new products from the manufacturer and
products of other manufacturers already represented by the
agent. If such problems are foreseeable, the parties should
define appropriate rules for solving the conflict.
§2. Territory
____________________________------------------------------------------------------------
If this paragraph 2 of Annex I has not been filled in, the
whole territory of the country where the Agent has his place
of business will be considered as "Territory" for the purpose
of this contract.
-------------------------------------------------------------
ANNEX II PRODUCTS AND PRINCIPALS REPRESENTED BY THE AGENT
(Article 5.4.)
-------------------------------------------------------------
This Annex is applicable only if filled in by the parties.
The Agent hereby declares that he represents (and/or
distributes or manufactures) the following products, directly
or indirectly, at the time of the conclusion of the present
contract:
-----------------------------------
PRINCIPAL PRODUCTS
-------------------------------- ____________
ANNEX III ADVERTISING, FAIRS AND EXHIBITIONS
§1. Advertising (art. 6.2.)
Except as otherwise agreed in writing, the costs of agreed
advertising shall be shared between the parties as follows:
--------------- Principle: %
--------------- Agent: %
-------------------------------------------------------------
If the figures left blank in the above paragraph are not
filled in by, the parties, each party will bear the
advertising expenses it has incurred.
-------------------------------------------------------------
§2. Fairs and exhibitions (art. 6.3.)
Except as otherwise agreed in writing, the costs for
participation in fairs and exhibitions in the Territory shall
be shared between the parties as follows:
--------------- Principal: %
--------------- Agent: %
-------------------------------------------------------------
If the figures left blank in the above paragraph are not
filled in by the parties, each party will bear the expenses
for participation in fairs and exhibitions it has incurred.
-------------------------------------------------------------
ANNEX IV GUARANTEED MINIMUM TARGET
(Article 7.3)
This Annex IV is applicable only if the parties have fixed the
minimum target by filling in one of the alternative figures
hereafter
-------------------------------------------------------------
The Agent undertakes, during each year, to transmit orders for
not less than:
--------------- □ (amount in money)24
--------------- □ (amount in Products)
--------------- □ % of the target agreed upon in accordance
with article 7.1.
If this alternative is chosen, care should be taken in order
to avoid that the agreed sum is automatically reduced (from
year to year) as a consequence of inflation, e.g. by providing
a yearly increase.
If at the end of the year the above Guaranteed Minimum Target
has not been attained, for reasons other than those for which
the Principal can be held responsible, subject to giving one
month's notice, the Principal shall be entitled at his choice,
to terminate this contract, or to cancel the Agent's
exclusivity, or to reduce the extension of the Territory. This
right must however be exercised in writing not later than two
months after the end of the year in which the Guaranteed
Minimum Target has not been attained. Unless the parties
hereafter agree on different figures, the Guaranteed Minimum
Target indicated above shall also be applicable for each year
of the duration (including the case of renewal) of this
agreement.
ANNEX V DEL CREDERE25
(Article 10.2)
In choosing the options parties should pay attention to the
legal rules of the country where the agent is established. In
some legal systems (e.g. Great Britain) there are no
limitations; in others (e.g. Germany) the del credere
obligation must be limited to specific business or customers
and a special commission must be paid; in other countries
(e.g. Italy) del credere may be granted on all business, and
without special commission, but only for a percentage of the
loss.
---------------------------------------------------------------
This Annex V is applicable only to the extent it is filled in
and provided it has been signed by the parties
---------------------------------------------------------------
The Agent shall act as a del credere agent according to the
conditions stated hereafter. A del credere obligation means
that the Agent undertakes to reimburse to the Principal the
total or partial amount (according to the alternative
solutions under §2 hereafter) of unpaid sums that the
Principal is entitled to receive from customers and which have
not been paid for reasons for which the Principal is not
responsible. The del credere obligation does not cover the
expenses incurred by the Principal for recovering his credits.
1. The agent shall be responsible:
1.A □ for any business transmitted by him
1.B. □ only for business or customers expressly agreed case by
case
2. The agent's responsibility shall be:
2.A □ unlimited
2.B □ limited to □□ % of the sums not recovered26
2.C □ limited to □□ times the agreed commission
Options 2.B and 2.C may be used together: e.g. not more than
15% of the sums not recovered and not more than three times
the agreed commission.
3. The agent shall be entitled to an extra commission of □□ %
on all business on which he has granted del credere.
4. No del credere is due if the loss is due to reasons for
which the Principal is clearly responsible.
5. The Agent has no right to commission according to article
16.2. However, the del credere obligation shall in no case
exceed the total amount due by the customer minus the Agent's
commission.
The Principal The Agent
_______________ _______________
ANNEX VI COMMISSIONS
§1. Amount of commission (Art. 15.1.)
1.1. Simple commission
Amount of commission is □□ %
1.2. Different levels of commission according to the value of
the sales contract. If a contract lasts more than one year,
parties should agree if they wish to consider the agreement
for the following year as a separate agreement. Parties should
also clearly define the criteria for considering a group of
supplies (e.g machines and equipment for the same project) as
one sales contract or as separate contracts.
-----------------------------------------------------------------
If this subparagraph 1.2. is filled in, it will apply in lieu
of paragraph 1.1.
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Sales contracts up to % ----------- ----------- -------
Sales contracts from up to % ----------- -----------
-------
Sales contracts from up to % ----------- -------
Sales contracts over % ----------- -------
§2. Special customers/Reduced commission (Art. 13.3.)
On all sales to the following customers the Agent is entitled
to the following reduced commission:
------------------------------- --------- %
§3. Negotiation margins and discounts (Art. 15.3.)
3.1. Negotiation margins
The Agent has a negotiation margin of □□ % on the prices set
out in the price-list in force. Therefore, the Agent may
propose to customers any discount within such margins without
reduction to his rate of commission.
3.2 Authorized discount
The Agent is entitled to propose to customers the following
discounts, which entail a reduction in his commission, in
accordance with the schedule hereunder:
Negotiation margin □□ % full commission
discount of □□ % commission □□ %
3.3. Discount to be agreed upon
The Agent undertakes not to propose to the customers any
discount higher that the maximum discount shown in the
schedule set out in §3.2. above, without prior written
authority from the Principal.
§4. Commission on insured credits (art. 16.2)
If the Principal is insured against the insolvency of his
customers, and he is paid by the insurer (instead of receiving
the price from the customer) the Agent is entitled:
□ to a half commission on the sums paid by the insurer
□ to the full commission on the sums paid by the insurer,
after deduction of the costs or expenses borne by the
Principal with reference to the non-payment.
ANNEX VII CHANGE OF CONTROL, OWNERSHIP AND/OR MANAGEMENT IN
THE AGENT COMPANY
(Article 20.5)
The principal may terminate the agreement with immediate
effect, if:
□ Mr. ceases to own more than □□ % of the shares of the
Agent company
□ Mr. ceases to be the of the Agent company
Specify here the position that the qualifying person has in
the agent company, e.g. director, general manager, president
of the board, as the case may be. This clause may be dangerous
for the agent company, particularly if the qualifying person
is not the owner, but only an employee. At the same time, if
alternative A of article 21 is applicable, the Agent company
may terminate this contract on grounds of the
------------------------- age, infirmity or illness of Mr.
------------------------- according to article 21.4 A, (b),
without losing the right to the goodwill indemnity under such
provision.
Our Contract Template Database is complied in accordance with
laws of P.R.China. This English document is translated
according to its Chinese version. In case of discrepancy, the
original version in Chinese shall prevail.
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