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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

 
 s
 

 

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 wholesal er to get its products to
market. Two of the most tried and tested methods are agency and distribution
arrangements.

s
 

  


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.
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 farmer¶s 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:

a the territorial or other scope of the agreement;

a non-exclusivity or exclusivity (taking into account competition law);
a non-compete obligations (taking into account competition law);
a minimum performance obligations;
a reporting obligations;
a marketing rights;
a trade mark licensing;
a the applicable terms and conditions of sale;
a the circumstances in which the agreement may be terminated; and
a 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.
 s
 





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. Agent¶s) acts.

Common points to consider when drafting an distribution agreement are:

Terms of Agency
Commission
Duties and Responsibilities of the Agent
Duties and Responsibilities of the Principal
Termination
Compensation & Indemnity
Arbitration
Notices
General
Jurisdiction
Schedule

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If a person or entity is an "agent", it represents the manufacturer and usually has the
right to conduct business under the manufacturer¶s 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 manufacturer¶s goods. Instead, it enters into
agreements with customers who then receive title to the goods directly from the
manufacturer. The agent¶s profit comes from the commission that is earns from the
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. The
distributor 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.

 * $  *  

$
+ 
* 

,% c % 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 distributor
can be appointed in the territory). From the manufacturer¶s 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.

-%  
*

% 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 agent¶s exclusive territory?

)%
 % Which products will the agent or distributor have the right to sell?
Often, it will be all of a manufacturer¶s 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.

.%c% 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.
(% c
 
% 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.

/% !   c

 
  !" 
. 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 be
required 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
manufacturer¶s trademarks.

0%
 1
 * +2
%  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.

3% 4
   
  
 % 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 f ollowed by a corresponding credit.
'
c% 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 the
manufacturer 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).

,,% 

 1(
5 % 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.

,-%   

% Will the agent or distributor be required to take
affirmative marketing efforts to develop the market for the manufacturer¶s
products? If so, will the manufacturer provide any financial support for
advertising or other marketing?
 +



  $

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

contract

³All 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.  
   
 : 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. 


      
*' - 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. 6 
 
' 5 the agreements is legally enforceable only when
both the parties give something and get something in return. Consideration
 means µsomething in return¶ or benefits moving from one party to the other but
it must be real and lawful.

4.      ' 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. 


 

: - 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. 67 : - the object of the agreement must be lawful. It means that the
object should not be illegal, immoral or opposed to public policy.

7. $

     :- the agreement should not have been
expressly declared void by law of force in the country.

8.  

 
 : - 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. 6   :- 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
 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. Performance
2. Tender
3. Mutual consent
4. Subsequent impossibility
5. Operation of law
6. Breach

1.  *  

   
  
 :- the obvious mode of
discharge 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.   

:- if the parties to a contract agree to substitut e 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.    

' 5 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.


.%  
'5 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 

(% & *' 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. 

 (c+$c $!(8

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 rep resent
another in dealings with the third person is called ³principal´. 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.

Agent¶s 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
Eg. A person may be appointed as agent either by word of mouth or by writing. No
particular form is required for ap pointing 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 .

$
 '5
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 Prakash¶s agent . Later when Cooper supplied certain goods to Aanand
thinking him to be Prakash¶s 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

!" 

 * '5
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 ne cessary 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
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 principle
2. The nature of agency such that it cannot be accomplished without the
appointment of sub agent.
3. In an unforeseen emergency.

 
* 


A) To conduct the business of agency according to principal¶s 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 principal¶s 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 an d 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.
 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

a Right to remuneration
a Right of retainer
a Right of lien
a Right of stoppage in transit
a Right of indemnification
a 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 good
faith, though it causes injury to the right s of third parties.
3) Bound to compensate his agent in respect of injury caused to such a agent by
the principle¶s neglect or want of skills

Liability of principal to third party:

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.

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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 B¶s 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.
 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.


 
'

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.

a Where the contract is made by the agent for the sale or purchase of goods for
the merchant resident abroad.
a Where the agent does not disclose the name of his principals.
a 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.
Moreover if the agent has already partly exercised his authority then also the agency
can¶t 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: -

³Any 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. ³

The principal (owner of the company) who has made an agreement with the agent
can terminate the contract with 90 days prior w ritten 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.

s
 

 

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
immovable¶s 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.
It also describes what is price under a contract. Price means the 

consideration for sale of goods. If pr ice 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 contract
2) Either fixed by the contract.
3) Determined by the course of dealings between the partie s.

!
 
  

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 sal e 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.
 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 doesn¶t 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
³conditions´ and the later ³warranties´

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
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 he
may 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
can¶t 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 one

of 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,
 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

 
' 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 to
the buyer for a money consideration, called the price.


 
   

 
 
' 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 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.
Delivery basically means voluntary transfer of possession of goods from one person
to another.

a Delivery goods may be:

` $   - 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 Z¶s 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.
`    - 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 Z¶s
warehouse and hands over the key of Z¶s warehouse to Y. In this case ,
there is symbolic delivery of goods.
` 
    ± 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 Z¶s 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.

+ '

(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.
(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, there
is 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 reasonab le 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 delivery
2. Delivery and payment-concurrent condition
3. Buyer to apply for delivery
4. Place of delivery
5. Time of delivery
6. Goods in possession of a third party
7. Cost of delivery
8. Delivery of wrong quantity
9. Installment deliveries


2
 ' 
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, he
shall 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
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.

+ *       

  ' 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. 

& *   "


 * ' 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.

&
  
   
 7  ' 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. 

6 

 

% 5 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.


+*     
 
 ' 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.
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 sa y it¶s the right of stopping the goods in transit after the
unpaid seller has parted with the possession of the goods. it is possible when;

+* '5 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.

+ * 
 ' 5

,%  5under 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.

-% 

5 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.    

 5the interest may be calculated from the data of the tender of
goods or from the date on which the price was payable.
 s
 

$  


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 is
chosen, 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.

+2

$  
$
 

a Section 7(3) of the Act requires that the arbitration agreement must be in
writing.
a 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.
a Under Section 7(4), an arbitration agreement is in writing, if it is contained in:
(a) a document signed by the parties
a (b) an exchange of letters, telex, telegrams or other means of
telecommunication, providing a record of agreement
a (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.
a In section 7(5), it is provided that a document containing an arbitration clause
may be adopted by "reference", by a contract in writing.
Model Arbitration Agreement

a Ã


 
  
 





  



     



  
       


 

!
   

 !
  


 

!   



!  

" 
 

!"

!"  

Schedule to Constitution empowers Central Go vernment 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 µmanufacturer¶, 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 µgoods¶ i.e. (a) it must be movable 
 (b) it must be
marketable. However, actual sale is not necessary.

µGoods¶ 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

 
 ** #$c *

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)

 c+&sc +9
$+!!!(c

On this day on ______________, 1 <  

 6  with its sales office at
328, Laxmi Plaza, Off New Link Road, Andheri (W), Mumbai ± 400 053. Hereinafter
referred to as the ³Company´ enters into an agreement with

1% Pan India Pvt. Ltd  having its Regd. Office at 504-510, RNA Arcade,
Lokhandwala, Andheri ( West, Mumbai - 400061. Hereinafter referred to as the
³Distributors´ for their appointment as Distributors for the area  *  
 to distribute the F.M.C.G. products.

WHEREAS

A. The Company deals in FMCG product with cold drink named as ³spirit´.

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

,% $


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  * =  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
 -% c$


The agreement is valid for period of ,-
* from the !   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.

)%   * 


3.1 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.
.%   *  
4.1 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 Company¶s 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.

(% 

 
 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 pu rchase 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
distributor¶s confirmation before d ispatching the consignment.
Distributor can request and Company will at Distributor¶s 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 arriva l 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


/%   +  

 
  
 % 
6.1 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 Princip als in writing. The Principals may grant
consent for the pledge of the stock subject to terms and conditions and the
 distributor shall abide by such terms and conditions and bring the same to the
notice of the bankers or creditors.

0%
 




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.

3% c 
8.1 The title of the products w ill be transferred from the Principal to the Distributor
upon the receipt of the products in distributor¶s warehouse or payment of the
bill, whichever is earlier.

>% + 6

9.1 Risk of loss or damage to the products passes on to the Distributor upon
receipt at Distributor¶s Warehouse.

,;%4

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

,,%

 
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
 shall not publish, disclose or disseminate it except on the written
authorization of the other part y. This clause shall not apply to any information
which previously known to either party or information which is public
knowledge.

,-%

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 p ublicity 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 the
Company insured during transport and storage. The company will not be
liable for any loss occurred due to unpredictable happenings.

,)%c
 
$

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.
,.% 
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.

,(%(  
15.1.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 ± < 

6 
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

< 
6   



 %6 



(?*
* (+7*7
c   c  
   
4
 4

 



( (
c  c 

9!s6!=

Territory : Geographical territory of Mumbai district

 $
 






On this day on ______________, 1 <  
 6  with its sales office at
328, Laxmi Plaza, Off New Link Road, Andheri (W), Mumbai ± 400 053. hereinafter
referred to as the ³Company´ enters into an agreement with
1% Pan India Pvt. Ltd  having its Regd. Office at 504-510, RNA Arcade,
Lokhandwala, Andheri ( West, Mumbai - 400061. hereinafter referred to as the ³Firm´
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.

( 4c$+!!&!c4!!(c9!
$+c!9!+!c $ 66 4:

,% $



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  * = 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 ³Web Sale´ i. e. selling through
the Web enabled online shopping portals.

.

-% c$



The agreement is valid for period of - from the !   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.

)% 


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.

.%  
+
  *$


 
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 t he State
but 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.

+
 
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.

(%  

+
  *

 

 
1. 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.
 +
 

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

design t he firm will be entitled to return to the Company the old products sets
remaining unsold till the Company supplies new pieces in their place.

/% c
 


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 the
interest 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 Compan y and render account of
the dealings since the settlement of the accounts from the last previous
period till the cancellation of this agreement.


0% 
 
@

 

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.


3%  


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 rema in 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.

>% $  


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 Compa ny immediately.


,;%


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
 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.

,,%A 


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 papers
relating thereto and available with the Firm to the Company.
 ,-%
 


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.


,)%4

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 the
Company 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.


 *=
Territory: geographical territory of Mumbai district


'

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 ).