How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Alex J. Your Own Question
Alex J.
Alex J., Solicitor
Category: Law
Satisfied Customers: 3695
Experience:  Solicitors 2 years plus PQE
13113900
Type Your Law Question Here...
Alex J. is online now

i am reading a supplier contract. i work in food industry and

Resolved Question:

i am reading a supplier contract. i work in food industry and have agreed to supply own label products to another co. the agreement between us is that we are the sole suppliers of this particular product but if we fail they can bring in a third party. can i quote you some lines from the contract to confirm this is the case before i sign it?
Submitted: 3 years ago.
Category: Law
Expert:  Alex J. replied 3 years ago.
Hi,
Thank you for your question and welcome.
My name is ***** ***** I will assist you.
If you past the lines into this thread I will review them?
Kind regards
AJ
Customer: replied 3 years ago.

hi AJ,

I think i sent the whole thing to you before but i may not have hilighted the bit i am talking about so am just checking again.

in the recitals at the start of the contract it says " x wishes to appoint y as its non exclusive supplier of z products for the promotion and sale of the products within the territory, as defined below..."

obviously they are x and my company is y (the manufacturer), z is some branded products we make for them to sell.

later in the contract, under sales of the product it says:

"y shall purchase the same or similar products from the manufacturer but shall have the full right to purchase the same or similar products to the products from third parties in the event that the manufacturer fails to honour the agreement and fails to remedy that failure within 28 days"

later still it says under "delivery"

"time of delivery shall be of the essence and if, despite those endeavours, the manufacturer is unable for any reason to fulfil any delivery of the products within 7 days of the specified date, the manufacturer shall be deemed to be in breach of this agreement, "

basically i am happy to sign something that says that we supply and if we mess up and dont remedy failure within 28 days then they can purchase from a 3rd party.

i am confused by bit re 7 days as to me that reads that if we mess up and dont fix it within 7 days the whole agreement is in breach?

Expert:  Alex J. replied 3 years ago.
Hi,
Thank you.
"time of delivery shall be of the essence and if, despite those endeavours, the manufacturer is unable for any reason to fulfil any delivery of the products within 7 days of the specified date, the manufacturer shall be deemed to be in breach of this agreement, " - I would consider adding wording to this sentence that says that "the only remedy for breach of this section shall be limited to rescinding the purchase order to which the late delivery of the products apply and x shall be entitled to purchase the goods from a third party" - "the manufacture shall not be liable to pay any damages for late delivery".
If you can try and remove reference to time being of the essence, also the contract should exclude you liability for indirect and consequential loss and losses of profit.
Is Y the "Manufacturer"?
Kind regards
AJ
Customer: replied 3 years ago.

yes y is the manufacturer.

does the contract say we are the sole supplier and a 3rd party will only be bought in if we screw up?

this is the key thing as the product we make is new the whole industry was built by myself and although we are getting some copycat companies it is generally quite hard to make. i dont want to be one of 2 suppliers and encourage people to build a business making this product

Expert:  Alex J. replied 3 years ago.
Hi
Thank you.
1. The fact that they have used "time is of the essence" as a phrase means that time for delivery is a condition of the contract. That means if you miss a delivery you have breached a condition allowing them to terminate the whole contract;
2. The contract is for the "non exclusive supply" - this means that they can potentially order from other suppliers;
3. What the contract should say is that it is an "exclusive" supply agreement - you should them agree a set of delivery performance indicators - you can then agree that if you breach these buyer may then seek to obtain the goods from a third party.
As the wording stands it does not achieve what you are asking for.
Kind regards
AJ
Alex J. and other Law Specialists are ready to help you