MARKETING AGREEMENT

THIS AGREEMENT is made on September 2001 between V.L.S. Foods Private Ltd., a Company incorporated

under the Companies Act., 1956, having its registered office at 416.12 Krishna Colony, Gurgaon (Haryana)

(hereinafter referred to as VLS ) represented by Managing Director Deepak Bhardwaj of the one part and HLL company incorporated under the Companies Act, 1956 having its registered 7 th floor, Cuffe Parade, Bombay

hereinafter referred to as HLL represented by its General Manager (CS & P) Shri. A.M. Rao of the other part. Whereas VLS is engaged in the business of procuring and supplying the products manufactured by M/s. Paramount Food Industries (PFI), Gurgaon (Haryana) hereinafter called the Contract Products. And whereas HLL is a trading, company engaged in the marketing of consumer and other goods through an

experience marketing sales organisation all over India. And whereas VLS is desirous of supplying the contract products and wishes to appoint a Marketing Representative to promote and sell the contract products and HLL is desirous of marketing the aforesaid goods supplied by VLS , the Parties (i.e VLS and HLL ) have agreed that VLS shall supply the contract products to HLL , and that HLL shall

provide

the

required

infrastructure

and

expertise

for

marketing these products upon the terms and conditions which the Parties have desired to reduce in writing as hereinafter contained. NOW IT IS HERBY AGREED BY AND BETWEEN THE PARTIES HERETO AS FOLLOWS 1. VLS hereby appoints HLL as its exclusive Marketing Representative to sell the contract products herein mentioned at Clause (2) of various pack sizes

manufactured by PFI within the Delhi Branch areas of HLL . The areas of operation under this agreement may be increased from time to time by mutual consent of the parties. 2. VLS shall supply to HLL for marketing the following products in the brand name of Gold Crunch in various pack sizes. It is also agreed that the VLS will offer new products/new pack sizes if any in future to HLL for sale on the terms & conditions that may be agreed between the Parties. However, the terms and conditions in such cases and not be less favourable than those under this agreement. 1. Corn flakes (restricted to Rajasthan) 2. Malted Dalia 3. Chow Chow

4. Plain Noodles 3. The target sales per month to be achieved by HLL for the contract products in different packs in the agreed areas during the validity of this agreement will be mutually decided by the parties from time to time. 4. VLS shall be responsible for the supply of the Contract products to be delivered at the warehouses/godowns of HLL and HLL shall unload and store them at its risk and responsibility. VLS agrees that it shall make good the shortage arising as a result of damage caused to the goods in the course of transit. However, HLL shall inform VLS regarding, such damage arising in the course of transit within five days of taking delivery of the said goods at its warehouses/godowns. It is agreed that this condition will be applicable only to such damage to goods as can be detected visually and by outward inspection. 5. It is agreed that VLS shall effect delivery of the contract products at the warehouses/godowns specified by HLL , and that it shall be given an acknowledgement receipt duly signed by the representatives of HLL at the time of delivery. The expenses pertaining to transport of the contract products to the godowns of HLL and expenses relating to freight, insurance, handling,

loading and other charges incidentally thereto shall be

borne by VLS . It is agreed by the parties that any expenses that would be incurred in transporting, the contract products from the godowns of HLL to the other stockists and/or retailers shall be borne entirely by HLL itself. 6. It is agreed that HLL would sell and delivery the stocks to its stockiest and or retailers at their own risk and expenses. It is further agreed that HLL shall pay the applicable sales tax, octroi, turnover tax and any other duties, levies and cesses that may be in force form

time to time. It is agreed that the turnover tax, local sales-tax and other duties and cesses which are not permitted to be recovered from consumers which have been paid by HLL shall be reimbursed to it by VLS on receipt of proper evidence in this regard. 7. It is agreed that VLS shall supply the contract products to HLL free from any manufacturing defects. However, in the event of any manufacturing defects being found in the products supplied to HLL , it shall be the right of HLL to return the defective goods to VLS at the

expense of VLS at any stage i.e. from the time of delivery to HLL up to the time of ultimate consumption by the consumer. 8. It is agreed by the parties that if the contract products are returned by the ultimate consumers to HLL , or its

stockist and/or retailers at any time on the ground that the said goods or are on not any up other to the stipulated ground

specifications

reasonable

including expiry of the shelf life of the products, the expenses (including insurance and freight charges)

incurred in returning the said goods to VLS shall be borne by VLS . VLS shave also agreed to take back old/damaged products at their cost, based on the field reports of HLL . 9. It is agreed by the parties that the delivery of the goods under the arrangements contemplated by this agreed shall be on a consignment basis and consequently; (i) HLL shall use its own bill books for the sales made by it; (ii) HLL shall print on its invoices and other business stationery that they are the consignees of the goods from VLS and that the contract products are the goods supplied by VLS and (iii) HLL shall be responsible for the filling of the sales-tax returns and other necessary statutory returns with the local Govt. Authorities as per the law. 10. It is agreed by HLL that it shall at all times keep such levels of stocks of the contract products as may be agreed to by the parties form time to time. 11. The contract products shall be sold by HLL at the prices determined by VLS . The price structure shall

specifically indicate the commission payable to the stockiest, the retailers and to HLL itself, as agreed. VLS shall have the option to revise the prices of the contract goods from time to time after reviewing the market conditions and other relevant factors after due intimation to HLL . HLL agrees and undertakes to

strictly agreed to fix the price suitably lower than the price of its main competitors in order to enlarge its market share. 12. HLL shall be responsible for the collection of the sale proceeds from the stockiest/distributors/retailers to

whom it has billed the stocks. 13. HLL also agrees and undertakes that during, the

pendency of this Agreement it shall not directly or indirectly, in any manner promote and/or sell goods identical to the contract products which are

manufactured by rival manufactures and sold under different brand names except the existing products already marketed by HLL . 14. It is agreed by HLL that it shall form to time report to VLS on the market position of the contract products and also report about the prices, terms, product

characteristic and ranges offered by the competitors. 15. It is agreed by the parties that the following system of payment shall be followed:

(i)

For sticks received by HLL from 1 st to 15 th of the month, the payment shall be made by t to VLS on the last day of that month.

(ii)

For stocks received between 16 th and the end of the month the payment shall be made on or before the 15 th day of the succeeding month.

16. It is agreed by the parties that for services rendered by HLL under this Agreement, VLS shall pay commission to HLL @ 10% (ten percent only) of the Basic price of the goods supplied for sale of HLL . It is agreed by the parties that the stipulated commission amount

receivable by HLL shall be deducted by HLL on a monthly basis from the sale proceeds by it to VLS . 17. It is agreed by the parties that all sales promotions and advertising expenses shall be incurred and borne by VLS . On its part, HLL shall render all necessary

advertising and sales promotion plans at the request of VLS from time to time. VLS L shall provide sufficient quantities of Posters, danglers, stickers to HLL for promotion of the contract products. VLS have also agreed to offer attractive trade and display scheme at the time of launch of the products through HLL and also and when market conditions demand from to time as per reports of HLL . VLS have also agreed to offer 50 gms one time free serving packs of the new products

free of cost for A class market/outlets and provide counter sales in important locations in Delhi at the stage of launch of the contract products under this agreement also special trade schemes from time to time by mutual consultation of the Parties. 18. VLS shall forward any direct inquiries or orders

received by it in respect of the supply of the contract products in the areas actually covered by HLL to HLL for execution, and HLL shall be entitled to receive thereon the commission as per the terms of this

Agreement. 19. It is agreed by HLL that it shall send to VLS a clear photocopy of the Sales-tax Assessment Order(s) for each Financial Year and proof of discharge of the said Sales Tax liabilities by it. 20. It is agreed that VLS as the supplier/Consignor of the contract products shall conform to the legal provisions of Weights and Measure Act and other applicable

Acts/Rules. In case of any violation of the aforesaid Acts/Rules it is agreed that VLS alone shall be

responsible for the said violations and the ensuing liabilities. VLS have agreed to affix stickers marketed by HLL /print the said words on the packs of contract products sold through HLL .

21. (a) It is agreed by VLS that in supplying the contract products it shall strictly adhere to the provisions of the Prevention of Food Adulteration Act, 1954 and other relevant rules and regulations that may be in force in the areas where the contract products are being

marketed by HLL . (b) It is agreed that where required by law VLS shall furnish along with the products proper certification stating that scientific food analysis has been conducted on the products by the relevant Government

Department. It is also agreed that VLS shall supply the products in properly packed containers. 22. VLS undertakes to indemnify HLL , its Directors, Officers and Employees against all legal proceedings that may be initiated against any or all of them with regard to the adulteration etc. of contract products. The indemnity shall cover all such cases of food adulteration, food poisoning and other related problems arising out of or caused by any act or commission or omission, that can be reasonably attributable directly or indirectly to VLS , its servants, employees or agents during the course of manufacture of the contract products and/or their

transport to the godowns/warehouses of HLL . 23. It is agreed that neither Party to this Agreement shall be deemed to become an agent of the other as a result

of this Agreement, nor shall either one of them hold itself out as an agent of the other, and neither shall incurancy commitments or a liability on behalf of the other. 24. The terms of this Agreement shall commence from the date of its execution and shall be valid for a period 3 years. The agreement may be renewed for such further periods and on such terms and conditions as may be mutually agreed to by the parties. 25. (a) Notwithstanding Agreement, anything party contained may in the the

either

terminate

Agreement by giving six months written notice to the other. On termination of the Agreement, it is agreed that HLL shall return the unsold stocks of VLS or pay the value thereof including those which were supplied to it within 10 days from the expiry of the notice period subject to final

settlement of accounts. It is agreed that the transport, insurance and freight charges in

respect of such return goods shall be borne by VLS . (b) Notwithstanding terminate this the above, either in party may with

Agreement,

writing

immediate effect, if the other party: (i) shall have failed to cure a material breach of this Agreement

within 60 days after receipt of a written notice to do so and such default continues at the time of the letter of termination notice; or (ii) enters

bankruptcy or Receivership or ceases business or is liquidated. 26. This agreement covers domestic sales within the

territory of India. It is agreed by the parties that if any export order is received by HLL in regard to contract

products, it shall discuss with VLS as to the terms and conditions of pricing, payment and other essential

matters pertaining to the execution of the export order. It is also agreed that the final decision in regard to all aspects pertaining to the export order shall rest with VLS . 27. Any disputes or differences or claims arising out of or in relation to this Agreement including its construction validity or performance shall be filed, tried and decided in the Courts of competent jurisdiction in the city of Bangalore or Delhi to the exclusion of all other Courts in India. 28. All communications concerning or the validity, of life, this

interpretation,

modification

extension

Agreement or of the right and obligations of the parties shall be addressed as follows:

V.L.S. FOODS PRIVATE LIMITED 416/12, KRISHNA COLONY, GURGAON (HARYANA)

Or at such address as either party may from time to time substitute by written notice to the other. All other correspondence shall be sent to such address as the party which is to receive the same may direct. 29. The parties agreed that VLS shall not be held liable in any manner whatsoever if it is unable to carry out its oblations under this Agreement due to circumstances beyond its control, and vice versa.

V.L.S. FOODS PRIVATE LIMITED HINDUSTAN LEVER LTD

INTRODUCTION
The agreement is related to consumer goods and its transfer to the retailers through commissioning party. The first party is a manufacturer and transfer the goods while retaining the ownership to the second party to the contract which basically a trading company. The second party takes goods in transfers its further to retails through its sales-

network channel members. The retailers to whom the goods will be delivered are not a party to the contact. This is not a contract between two individuals but between two registered companies hence the concept of considering company as a dispute legal entity from its owner is very were reflected here. Several clauses have been added with relation to Indian contract Act 1872 and General Principles of law of contract (sections 1-75) are also a vital constituent of this

agreement. Sections like 125, related to indemnity, section 62 and 63 related to discharge of agreement, section 13 related to consent, section 2(d) related to consideration have also been referred to in the agreement entailing several clauses mentioned herewith in the contract. Partially, some clauses gives a reflection of application of sale of goods act and agency related contract but since the

agreement no where state that any of the party is an agent, hence we cant conclude that the government is basically an agreement based on agent principal concepts. Few of the clauses like delivery of goods (sec. 2(2)) acceptance of delivery by another party (sec. 42)

delegation of authority (section 190) have been used regarding delivery of contract goods and the power of second party is using discretion. The agreement is fully legal contract as it do not fall under stated sections like Section 26 - Agreement in restraint of marriage Section-27 - Agreement in restraint of trade Section 28 - Agreements in restraint of legal proceedings Section-29 - Agreement the meaning of which is uncertain etc. Both the representatives are fully 'Competent to Contract' (section 10) on behalf of aforesaid companies.

The 'Proposal or offer' terms are very significant in nature while drafting any kind of agreement and in this agreement also the offer was made earlier by one of the party and consequently it has been accepted by the other party after some desired amendments (Section 2 (A) of ICA and 2 (b) of ICA Assumption: The acceptance in this case in absolute and unqualified (Section 7(1)) and also has been expressed in a usual and reasonable manner (Section 7(2) ICA.

THE APPLICATION OF INDIAN CONTRACT ACT, LAW OF SALE OF GOODS, LAW OF INSOLVENCY LAW OF

CARRIAGE OF GODS, AS RELATED IN THE CLAUSES MENTIONED IN THE AFORESAID AGREEMENTS. Agreement is enforceable by law, hence it is a contract (Sec 2 (H) ICA One element is present : It is an Agreement (Sec. 2 (c)) ICA All essential elements of valid contract are present (Section 2 (4) ) ICA Offer and acceptance Intention to create legal relations

Both the parties are competent (Sec. 11) ICA Agreement is under writing and registration (Section 25) ICA

It is a certain agreement (Section 29) ICA Complete possibility of performance as it involves

transfer of contract goods with engaged resources (Sec. 56) ICA It is a valid contract not a voidable contact (Section 2 (i) ICA

CLAUSE WISE REFERENCE

Clause 1 Amendments on mutual consent (section -14) and free consent. Clause 2 Sale of good Act (Section 4 (1) SGA Clause 3 Agreement to sell (Section 4(3) SGA Clause 4 Place of delivery (Section 36 (1)) SGA Clause 5 Expense of delivery [Section 36 (5)] SGA Clause 6 Place of delivery and further transfer goods Clause 7 Buyer not bound to returns rejected good (Section 45) SGA Clause 8

Same as above Clause 9 Manner of delivery - Section 36(3) SGA and expenses Section 36 (5) SGA Clause 10 Denial of delivery of wrong quality (Section 37) SGA Clause 11 Mode of fixing the price (Section 9) and expressly fixed by the compact itself. Clause 12 Release to collection of payments Clause 13 Based on mutual consent that competition goods will not be sold by second party during agreement tenure. Clause 14 Based upon providing reports about market condition etc. General clause based on mutual consent, Clause 15 Delivery and payment (Section 32) SGA

Clause 16 Price of goods and commission receivable (Section 9) SGA Clause 17 Expenses [Section 36 (5)] Clause 18 Related to commission to be received on direct enquiries and orders. Clause 19 Legal or valid element of a contract. All I am related requirements to be fulfilled Clause 20 Liability of buyer for neglecting the goods. Adhering to legal provisions. Clause 21 Condition as to merchantability [Section 16 (2)] SGA Clause 22 Rights of indemnity holder and liability of second party in case of any toss or legal proceedings.

Clause 23 The section 182 in fully denied i.e. neither party is an agent in the Agreement. Clause 24 Discharge of agreement section 63 SGA Clause 25 Discharge of agreement Section 63 Clause 26 Exports related mutual consent with discretion pertaining to one party. Clause 27 Covered under remedies in case of breach of contract and Area of jurisdicious as per the agreement. Clause 28 Commission addresses as per agreement mutually decided by both parties.

ASSIGNMENT ON 'MARKETING CONTRACT'

Submitted to: Prof. D. JAGANNATHAN

Submitted by: DEEPAK BHARDWAJ

INSTITUTE

FOR

INTEGRATED

LEARNING

IN

MANAGEMENT LODHI ROAD, NEW DELHI