In the International Buying Agent Contract one party (Principal) appoints another (Buying Agent) to represent and buy a specific kind of products within a specific territory that can be a country or multiple countries. The responsibilities of the Buying Agent may include, among others, the following: identifying manufacturers and suppliers of products within the described territory; negotiating prices, terms of delivery and payment; managing the international transport of documents which comply with export and import procedures; assisting and serving as a translator of the Principal´s representatives when visiting the country to negotiate purchase contracts or to check on the manufacturing of products.
Parties Clauses
- Appointment
- Functions of the Buying Agent
- Exclusivity
- Negotiation of purchases
- Acceptance of purchases
- Inspection and defective products
- Customs laws
- Invoicing requirements
- Letter of Credit requirements
- Buying Agent’s commission
- Travel costs and other operational expenses
- Relationships of Buying Agent with manufacturers and suppliers
- Confidentiality
- Term of Contract
- Amendments
- Granting of rights to third parties
- Applicable law and competent jurisdiction
- Language
Sample of Content
DATE: …………………………
BETWEEN:
…………………………… [company legal name] whose registered office is at
………………………………. [address, city and country] and registration/fiscal number is
…………………………, represented by ……………………………………………………. [surname and first
name, position] (hereinafter referred to as “the Principal”),
AND:
Alternative A [When the Buying Agent is an individual and independent professional]
Mr./Ms. …………….., of legal age, ……………………….. [ include professional qualification], Tax
Identification Number………….., registered address …………… , acting on his/her own behalf
(hereafter, “the Buying Agent”).
Alternative B [When the Buying Agent is a company]
…………………………… [company legal name] whose registered office is at
………………………………. [address, city and country] and registration/fiscal number is
…………………………, represented by ……………………………………………………. [surname and first
name, position] (hereinafter referred to as “the Buying Agent”).
IT IS AGREED AS FOLLOWS:
- APPOINTMENT
The Principal appoints the Buying Agent, and the Buying Agent accepts as representative, for
the purchase of:
Alternative A. The following products: ……………….. (hereafter “the Products”), in the
following designated territory: ……………….. (hereafter “the Territory”).
Alternative B. The products as described in Annex 1 of the present Contract (hereafter “the
Products”) in the territory as set out in Annex 1 (hereafter “the Territory”).
- FUNCTIONS OF THE BUYING AGENT
The Buying Agent shall perform on behalf of and under the direction of the Principal the
following functions:
2.1 Advise the Principal on market trends, sources of supplies, as well as potential
manufacturers and suppliers of the Products within the Territory.
2.2 Research the market and attend fairs in the name of the Principal to identify new
products and manufacturers that could be of interest for the Principal.
2.3 Ask manufacturers and suppliers for offers and samples of products that could be of
interest for the Principal.
2.4 Estimate and evaluate price offers given by manufactures and suppliers including
import expenses such as transportation, insurance and customs tariffs from the
countries of origin of the Products to ……………….[insert Principal´s country] or
to any other country designated by the Principal.
2.5 Negotiate with manufactures and suppliers with respect to prices, payment and
delivery conditions of the Products.
2.6 Accompany the Principal when its representatives visit the Territory to negotiate
purchase contracts or inspect the manufacturing process of the Products.
2.7 Act as an Interpreter for Principal´s representatives at meetings with manufacturers
and suppliers and in other times and places where such service is necessary.
2.8 Translate information provided by the Principal and transmit such information to
manufacturers and suppliers so that the Products can be manufactured in
accordance with Principal´s specifications.
2.9 Advise the Principal on export and import procedures and documents, specifically for
the purchase of Products within the Territory that will be sent to ………….. [insert
Principal´s country] or to any other country designated by the Principal.
Some Tips
DATE
The date when the contract comes into force is the one that appears in its header, as
mentioned in the final paragraphs of the contract, before signatures (This Contract comes into
force on the date written above).
In some contracts -for example in the Supply Contract- the date of coming into force is also
mentioned in one of the clauses. In these cases you have to verify that the two dates inserted
in the contract (in the heading and in the corresponding clause) are the same, in order to avoid
discrepancies.
PARTIES
Be sure to insert in the first page of the contract the full details of the Parties:
When a Party is a company you must insert the following information: legal name, legal
form (limited, incorporated, etc.), full address, registration data and fiscal identification
number.
When a Party is an individual that works as independent professional (for example a
commercial agent) you must insert the following information: full name, profession, full
address and fiscal identification number.
CLAUSES
Clauses with different alternatives: choose the most favorable
In the most important clauses of each contract (exclusivity, payment terms, applicable law and
competent jurisdiction, etc.) several drafting alternatives are proposed so you can choose the
most appropriate to each situation. Therefore, the user before submitting the contract to the
other Party must choose the alternatives that seem best suited to their interests, and
eliminate the rest.
Clauses with blank spaces to be completed
In several clauses of the contract blank spaces appear with dots (…………………..) that the user
has to complete inserting text. Following the dots, between brackets, you will see the data and
explanations to insert the text.
When the text between brackets is in normal letters (the same as the contract) and
separated by “,” or the word “o”, the user must insert one of the options suggested.
Example of blank space (……..) with options to select between brackets:
Orders handled before completion of the present Contract which produce sales transactions
within ………. [1, 2, 3, 6] months shall entitle the Agent to receive the corresponding commission.
In this case the user must choose between options 1, 2, 3 or 6 months and insert one in the blank
space (……..).
When the text between brackets is in italics the user has to insert the data and information
requested and eliminate the bracketed text.
Example of blank space – (………) to insert text:
Both parties, by mutual consent, resolve to refer any dispute to the Rules of Conciliation and
Arbitration of the International Chamber of Commerce by one or more arbitrators appointed
in accordance with said Rules. The place of arbitration shall be ……….. [city and country]. In this
case the user must insert in the blank space (………..) the city and country chosen to conduct
the arbitration and afterwards eliminate the bracketed text [city and country].
Notices Clause
Sometimes it may happen that the official address of the Parties which appear at the beginning
of the contract is different from which is to be used for communications between the Parties
during the terms of the contract. In this case the user should include at the end of the contract
a Notices Clause.
Example of Notices Clause:
Notices. – In order to comply with their contractual obligations, the Parties establish the
following address for the provision of notices related to this contract:
– Party 1 ……………………………………………………. [insert full address].
– Party 2 ……………………………………………………. [insert full address].
ANNEXES
The contracts incorporate some Annexes, each of them, referenced to the corresponding
Clause. Annexes are drafted in commonly used formats, although the user must adapt these
formats and the text inserted in them to each particular situation.
SIGNATURES
People who sign
Persons signing the contract on behalf of the company must have the authority to do so and
preferably, be entitled on the basis of a power of attorney. Below the signature, in addition to
the full name of the person that signs his/her position must be inserted. When one of the
Parties who signs is a natural person (for example a commercial agent in a Agency Contract)
obviously he or she is the person that has to sign the contract.
The laws of some countries require that contracts, to be valid, shall be signed in front of
witnesses or a public notary. Therefore, before signing a contract you should be informed
about the requirements that may exist in each country.
Place and date of signature
Usually contracts are signed by both Parties on the same date and place. Nevertheless, in
international contracts, due to physical distance, it is common that each of the Parties sign in
different dates and places. This contract provides for both alternatives so it comes to choosing
the most appropriate to each situation.
Number of copies
Usually, the Parties sign two copies of the contract, each Party retaining one of them, but cal
also arise the need to sign more copies. In this case all you have to do is mention explicitly the
number of copies to be signed in the paragraph that is included at the end of the contract
(Both Parties declare their conformity to the present contract, which is signed in …… copies,
each of which shall be considered an original).
GENERAL RECOMMENDATIONS
The Parties must sign all pages of the contract, including Annexes, so they are also valid. It is
better to use ball point or pen (not pencil) in a color other than black (e.g.: blue); this makes it
easier to distinguish an original document from a photocopy.
It is preferable (although no mandatory) to express sums of money and percentages in words
and figures. Of course, the words and figures for a given amount must match exactly. You also
must insert the currency in which the amounts are expressed. It is advisable to use the rules
establish by ISO that name each currency by three capital letters (EUR for euro, USD for dollar,
GBP for sterling pound, JPY for Japanese yen, etc. – you can get the acronyms of every currency
in the website www.oanda.com).
Once you have chosen the best alternatives of each clause and have completed the blank
spaces you should revise the whole contract to remove remaining paragraphs and correct any
errors.