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Online Advertising Agreement

What is included

An Agency Agreement that appoints a purchasing agent for the purchase of the goods. Exclusive agency clauses cover:

  • Definitions
  • Grant
  • Principal’s obligations
  • Termination
  • Termination consequences
  • Miscellaneous
  • Retention of title
  • Reservation of rights
  • Interest
  • Receipt
  • Force majeure
  • Severance
  • Whole agreement
  • Prior Agreements
  • Discretion
  • Change of address
  • Notices
  • Headings
  • Joint and several
  • No partnership
  • Assignment
  • Jurisdiction

12 pages  and includes gst.


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What is a Purchasing Agency Agreement?

An agency agreement that appoints a purchasing agent for the purchase of goods is a contract where a principal authorises an agent to act on their behalf to procure goods. This type of agreement is common in various industries, including manufacturing, retail, and wholesale, where businesses need to purchase large quantities of raw materials, components, or finished products. Below are the key elements, benefits, and considerations for such an agreement:

### Key Elements of a Purchasing Agency Agreement

1. **Parties Involved**:
– Identification of the principal (the party requiring the goods) and the agent (the party responsible for purchasing the goods).

2. **Scope of Authority**:
– Detailed description of the agent’s responsibilities and authority, including the types of goods to be purchased, budget limits, and any specific procurement guidelines.

3. **Duration**:
– The term of the agreement, including start and end dates, and conditions for renewal or extension.

4. **Compensation**:
– Compensation structure for the agent, which could include a commission, flat fee, or a percentage of the purchase value. Payment terms and methods should also be specified.

5. **Goods Specifications**:
– Detailed specifications of the goods to be purchased, including quality standards, quantities, and any other relevant details.

6. **Supplier Selection**:
– Guidelines for selecting suppliers, including criteria for evaluating potential suppliers and any pre-approved supplier lists.

7. **Purchase Orders and Documentation**:
– Procedures for issuing purchase orders, including required documentation and approval processes.

8. **Delivery and Inspection**:
– Terms related to the delivery of goods, inspection procedures upon receipt, and acceptance criteria.

9. **Confidentiality and Intellectual Property**:
– Clauses to protect confidential information and any intellectual property involved in the purchasing process.

10. **Compliance with Laws**:
– Assurance that all purchases will comply with relevant laws and regulations, both in the principal’s and agent’s jurisdictions.

11. **Termination**:
– Conditions under which the agreement can be terminated by either party, including notice periods and any penalties for early termination.

12. **Dispute Resolution**:
– Methods for resolving disputes, such as arbitration or mediation, and the governing law and jurisdiction.

Benefits of a Purchasing Agency Agrement


### Benefits of a Purchasing Agency Agreement

1. **Expertise and Efficiency**:
– Leverages the agent’s expertise and experience in procurement, leading to more efficient and cost-effective purchasing.

2. **Cost Savings**:
– Potential for cost savings through bulk purchasing, negotiation of better terms, and identification of cost-effective suppliers.

3. **Focus on Core Business**:
– Allows the principal to focus on their core business activities while the agent handles the procurement process.

4. **Risk Mitigation**:
– Reduces risks associated with procurement, such as supply chain disruptions, by relying on an experienced agent.

5. **Market Knowledge**:
– The agent’s knowledge of the market and supplier base can lead to better purchasing decisions and access to high-quality goods.

### Considerations and Challenges

1. **Agent Selection**:
– Choosing the right agent with the necessary expertise, reputation, and reliability is crucial for the success of the agreement.

2. **Performance Monitoring**:
– Implementing mechanisms to monitor the agent’s performance and ensure compliance with the terms of the agreement.

3. **Communication**:
– Maintaining clear and regular communication between the principal and the agent to address any issues or changes in requirements.

4. **Legal and Regulatory Compliance**:
– Ensuring that the agreement and all purchasing activities comply with relevant laws and regulations.

5. **Conflict of Interest**:
– Addressing potential conflicts of interest, especially if the agent has relationships with suppliers.

### Example Scenario

A manufacturing company in the United States enters into a purchasing agency agreement with a procurement firm in China. The agent is authorized to purchase specific raw materials from Chinese suppliers within a defined budget and according to detailed quality specifications. The agreement includes terms on compensation (a commission based on the value of purchases), delivery and inspection processes, confidentiality, and dispute resolution.

### Conclusion

A purchasing agency agreement can be a valuable tool for businesses looking to streamline their procurement processes, achieve cost savings, and ensure the consistent supply of high-quality goods. By clearly defining the roles, responsibilities, and expectations of both parties, such agreements can lead to successful and mutually beneficial partnerships.

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