Franchise Agreement For Sale Of Motor Cars Deeds Miscellaneous 1852 - Legal Draft
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............
this................
day of..............
between M/s.
ABC & Co. Inc. a Company registered under the Company law in the U. S.
A. and having its registered office at...................
hereafter referred to as the
Principal Company of the one part and Messers XY and Co. Ltd. a public
limited Co. registered under the Indian Companies Act. 1956 and having
its registered office at.............
hereinafter referred to as the Representative
Company of the other part as follows;
1. The Principal Company is manufacturing motor cars of different
types or models and sizes in U. S. A. for the last several years and has acquired a reputation in the said trade.
2. The Principal Company has recently manufactured a new super car
with modern gadgets sophisticated parts and other advantages and which has become popular in U. S. A.
3. The said car is also very convenient and suitable to Indian
condition
and the Principal Company intends to extend its area of operation by
entering into Indian market.
4. The present policy of the Government of India is also favourable to
make investment in Indian business and to keep the country in the expan
sion of its trade and manufacture.
5. The Representative Company is also manufacturing motor cars or
other vehicles in India and has its factory at
.......................................
6.
The Representative Company having learnt that
the
Principal Company intends to enter into Indian market for the manufacture and sale
of the said motorcar known as...................approached the Principal Company
with a proposal to act as the representative of the Principal Company for
the assembling and sale of the said motor car in India.
7.
After prolonged negotiations and discussions the Principal Company
has now agreed to appoint the Representative Company to assemble and/
or sale the cars of the said model in India on the terms and conditions
hereinafter recorded.
Now it is agreed between the parties hereto as follows :
1. The Principal Company hereby grants licence or permission to sell
the motor cars of the model and particulars more described in the schedule
hereunder (and which is hereafter referred to for the sake of brevity as the
said motor car) throughout the territory of India being the territory referred
to in Article 1(3) and defined in Schedule 1 in the Constitution of India.
2. The Principal Company shall export to the Representative Company
in India either all the parts of the said motor car or the complete cars and in the former case the Representative Company will assemble the parts in
their factory to enable them to sell the ready motor car exported in ready
condition.
3. The Principal Company shall also grant licence to the Representative
Company to use the trade marks of the Principal Company and which are duly registered under the laws in U. S. A. and under which the said motor
car is being sold and on the basis of the licence the Representative Company
will sell the motor cars on the strength of such trade marks. The Represen
tative Company will be entitled to get the trade marks registered under the
Indian Trade Mark Act in the name of the Principal Company or as in the
name of Representative Company as licensee of the Principal Company.
4.
The Principal Company will export to India on account of the Rep
resentative Company such number of motor cars in assembled or unas
sembled conditions as the Representative Company may require from lime to time.
5. The Principal Company undertakes to give training and information
regarding to the whole process in the manufacture of the motor car to not
more than there technically qualified employees of the Representative
Company at a time in the factory of the Principal Company at.....
for a period of
months and to the satisfaction of the Principal Company. All
the travelling expenses and boarding and lodging expenses during the slay
of the employees of the Representative Company in U.S.A., the salaries and
other emoluments payable to the employees according to the service
conditions of the Representative Company will be paid by the Representa
tive Company in such manner as the Company may think fit and proper. The Principal Company will not be responsible for the said expenses.
6.
The Representative Company will obtain a bond duly signed from
such employees of the Representative Company with a condition that they
will serve the Representative Company atleast for a period of
years and they will not disclose the techniques, know-how and other secrets adopted
in the manufacture of the said motor car and its spare parts and failing
which the employees will be liable to pay to the Representative Company
the damages as may be fixed by the Representative Company in consulta
tion with the Principal Company.
7. The Principal Company will also make available to the Representative Company the know-how and other information, technical knowledge, policy
and methods adopted by the Principal Company in
effecting
manufacture
and sales and shall also supply all literature written and/or published by
the Principal Company requiring such matters as aforesaid including
training, display and operation involved in the manufacture of the motor
car. The Principal Company also agrees to supply such information and
knowledge as may be required by the Representative Company for assem
bling the motor car and selling motors cars.
8. The Representative Company assures and guarantees that it will not
disclose to any other person the know-how, information, literature and
matters communicated to the Representative Company direct or through
its employees.
9. The Representative Company guarantees sale of......................
motor cars
every month failing which the Principal Company will have an option to
terminate this agreement.
FRANCHISE AGREEMENT
1715
10. The Principal Company will export to India the motor cars in ready
conditions or in unassembled
condition
and in such quantities as the Rep
resentative Company will require in accordance with the import and export laws of the U. S. A. and India. The Representative Company will make
arrangement with its banker in India to honour the letter of credit issued
by the Principal Company's bankers for the price of the cars
Imported
by
the Representative Company and all other expenses incidental thereto. The
Representative Company shall also furnish a Bank guarantee in favour of Principal Company for payment of the price of the cars supplied to Representative Company which guarantee will be limited to such amount
as may be
agreed
upon between the parlies hereto. The
guarantee
will be
a continuing guarantee and the draft thereof will be approved by the
Principal Company.
13. The Representative Company will sell the motor ears in the Indian market at such price as may be agreed upon between the Principal Company and Representative Company provided the price will be such as will leave a margin of profit atleast to the extent percent of the price charged by the Principal Company to Representative Company for each car.
The Principal Company undertakes not to sell the said motor car in India directly or through any other agency.
14. The Representative Company also undertakes not to sell in India the motor cars manufactured by any other manufacturer. Indian or foreign, during the subsistence of this agreement. But the Representative Company will be entitled to sell motor cars and other vehicles manufactured by Representative Company in India and outside and will also be entitled to accept agency of any other manufacturer Indian or foreign for sale of motor
cars outside India.
15. All payments to be made by Representative Company to Principal Company will be in Indian currency but at the exchange rate then prevailing and the Representative Company shall give all assistance to Principal Company in making remittance to Principal Company from India from time to time.
16. All licences or permissions required for the export of motor cars from U. S. A. will be obtained by Principal Company at its own expense and all licences or permissions required for the Import of motor cars by the Representative Company will be obtained by the Representative Company at its own cost.
17. All import customs and other duties or taxes payable at the port of discharge in India including clearing charges, wharfage, demurrage will be paid by the Representative Company.
18. All permissions required to obtain from the Government of India or any State in India and other authorities for assembling and sale of the motor cars will be obtained by Representative Company at its own cost.
19. The Principal Company will be entitled to send its one or more Representatives at its own expenses from time to time to India and visit Representative Company's factory and office premises and will be entitled to receive the Representative Company and will be bound to furnish all such information and material as may be required by him or them regarding the
sale of the motor cars and matters incidental thereto. The Representative Company will however be responsible to make arrangement for their travel in India and boarding and lodging in India, and the expenses in respect thereof will be borne by the Principal Company.
20. This agreement may be terminated by the Principal Company by giving one month's notice to Representative Company in writing in any of the following events:
(iv) If due to any restriction imposed by the Government of U.S.A. or Government of India the import and sale of motor cars in India becomes difficult or non-profitable;
(vi) If the Principal Company is not satisfied with the performance by the Representative Company of this agreement;
by giving one month's notice to the Principal Company in any of the following events:
that party from any liability incurred by the other party till the date of termination.
24. On termination of this agreement as aforesaid the Representative Company will not be entitled to make use of any trademarks of the Principal Company and if the trade marks or any of them is registered under the Indian law the Representative Company will get the same cancelled accord ing to law.
25. Notwithstanding the termination of this agreement for any reason aforesaid the Representative Company will be entitled to purchase or take delivery of the motorcars dispatched by the Principal Company on or before the date of such termination and the Representative Company will also be entitled to sell the motor cars in its possession till the whole stock is sold off and to that extent the agreement shall be deemed to be subsisting.
26. On the termination of this agreement as expressed, the Principal Company will not dispatch any motor car or any spares thereof to Representative Company.
27. The Representative Company shall not be entitled to assign any right or benefit, under this agreement to any other party without the consent in writing of the Representative Company and which consent may be given on such terras as the Principal Company, may think fit To impose.
28. This agreement will not be construed as a partnership between the two Companies and each party will be deemed to carry on its business independently but subject to the terms hereof.
29. The Representative Company will be entitled to advertise the sale of the motor cars in newspaper, T. V. or through other media in such manner as it thinks fit but at its own cost provided that in every such advertisement the name of Principal Company will be mentioned as the manufacturer of the motor car.
30. No party hereto shall be entitled to disclose in any manner to any third party anywhere or make unauthorised use of the know-how or other secrets of manufacture and business of Principal Company except to such persons who are supposed to work for the Company in confidence like the auditors, legal advisers, bankers or the Company's responsible employees
like technicians.
31. This agreement shall be governed by the law as in force in India.
32. Any dispute arising on any question arising out of or in connection with this agreement shall be referred to Arbitrator of a single Arbitrator or failing appointment of such Arbitrator by consent to two Arbitrators each to be appointed by each party hereto with power to the two Arbitrator to appoint a third Arbitrator and the arbitration will be governed by the
Arbitration and Conciliation Act, 1996.
33. If on the sale of any motor car, a complaint is received from any customer regarding any defect, the same will be rectified by the Represen tative Company at its own cost but if the defect is in manufacturing the car or its parts the same will be rectified by Representative Company or by Principal Company and the cost of removing the defects will be borne and paid by Principal Company
34. Any notice required to be given by any party hereto to the other under (his agreement or in law will be sent by registered post or electronic transmission at the address herein mentioned
Principal Company................at
............
Representative
Company ..................at.....................
36.
This agreement is subject to approval
of
the Government of India
and other authorities under the FEMA Act, 1999 or any other Act and shall
be effective and binding on the party only on the grant of all such approvals.
If any approval is refused the agreement shall be treated as non-existing.
.In witness whereof the parties have put their hands and seal the day and
year first hereinabove written.
THE SCHEDULE ABOVE REFERRED TO
x
xx
Signed
for
and on behalf of
ABC and Company Ltd. the
Principal Company by Mr
)
Managing Director duly authorised by its
)
Board of Directors in the presence of
)
Signed for and on behalf of XY and
)
Company Limited the Representative
)
Company by Mr
Managing Director
duly authorised
by its Board of
Director in the presence
of....
)