Commercial Agreements Chart

Commercial Agreements Revision Chart
Agreement Law Key Provisions Common Issues
Joint Ventures- Companies 1. Nature of the relationship- fiduciary or contract Breach of duty by either party.
two groups join Act 2. Parties' contributions.- what they are committed to do
to for special 3. Sharing of profits, risks and liability.
purpose 4. DEcision making
5. Intellectual Property
6. The mechanism of selling the interests in the venture;
7. Restriction on sale of shares;
8. Buy-sell arrangement;
9. Installation of Plant & Machinery;
10. Maintenance Facilities;
11. Tax Consideration;
12. Dispute Resolution Mechanism;
13. Termination;
14. Confidentiality and non-competition clauses; and
15. Clauses explaining the extent to which the venturers will be entitled to receive information about the venture, such as financial
information
Trust Deeds Trust Act ● A Trust can broadly and traditionally be defined as a legal obligation/relationship that exists between a Settlor (creator), a Rogue trustee not doing his duties
Trustee Trustee (protector) and a Beneficiary.
transferring to ● These parties can either be individuals or legal entities.
beneficiary ● Under a Trust arrangement, the Settlor transfers legal ownership of assets to the Trustee, to hold for the benefit of the
Beneficiaries
● Trusts are created through a written document which sets out the duties and powers of a Trustee.
● This can either be a settlement document or a declaration of Trust.
● Thereafter, a Trust Deed is drafted which contains inter alia; the name of the Trust, the objectives of the Trust, addresses of
the Trustees and powers of the Trustees.
Franchises Common law The franchisee’s business is substantially associated with the franchisor's brand. In franchising, the franchisor and each of its franchisees LAck of communication
Parent company are sharing a common brand. Franchisee does not uphold standards
governing
The franchisor exercises control or provides substantial assistance to the franchisee in how it uses the franchisor's brand to conduct
business. The franchisee is an independent contractor and not a joint employer, generally those controls cover brand standards and do not
extend to the human resources of the franchisee, nor do they extend to how the franchisee manages its business—aside from meeting the
requirements of the brand standards—on a daily basis.
The franchisor receives a fee from the franchisee for the right to enter into the relationship and to operate its business using the
franchisor’s trademarks. The fee can be an initial fee or it can be a continuing fee.
Shareholder Companies Important terms included in a Shareholders Agreement cover; Deadlocks

Agreements Act Deadlocks in decision-making by shareholders can
1. The day-to-day operation of the business; cripple the operations of a company. Deadlocks can
2. Board Directors and their duties; arise for instance, where shareholders with
3. General meetings and Board meetings; equivalent voting rights take different positions on a
4. Dividends, Restrictions on Parties and Events of Default; matter and none is willing to compromise on their
5. First Right of Refusal and Drag Along; and own. Deadlocks can be resolved through mediations
6. Insurance, Loan Accounts and Confidentiality. or arbitrations done by mediators and arbitrators
7. Shareholder exit strategies; appointed by the shareholders.
8. Shareholder warranties;
9. Confidentiality agreements; Death of shareholders
10. Restraint of trade for directors and/or shareholders; The legal title to shares in a company will pass to the
11. Agreement specifying or limiting business activities of the company; shareholders' heirs upon their death. The remaining
12. Right to appoint directors and the number of directors; shareholders may want to plan for such an
13. Director’s meeting procedures; eventuality as it will have consequences on how the
14. Reporting requirements of directors and management; business will run.
15. Agreement concerning financing policy;
16. Dividend distribution policy;
17. Personal rights/obligations of shareholders;
18. Documentation of shareholders/directors loans and the right to payment of interest;
19. Policies, management and procedures;
20. Protection of minority shareholder interests.
Distributorship Competition ● Purpose of the Distribution Agreement Forecasting not done

Wholesaler and Act ● Length of the Distribution Agreement Communication from wholesaler to distribution
distributor ● Exclusive or Non-Exclusive Appointment weak, no training.
○ An exclusive appointment often means that a distributor is the sole distributor of the product.
○ A non-exclusive appointment is opposite to an exclusive appointment. I
● Minimum Standards or Performance
○ For many exclusive arrangements, suppliers or wholesalers may require the distributor to maintain a
● Marketing and Promotion
Training and Support
● Competition
● Forecasts
● The supply of products may depend on seasonal factors, and the distribution agreement may be subject to forecasts as to the
availability of the products. Forecast quantities needed.
● Orders, Delivery and Payment
Guarantee Law of 1. Agreement with the third party providing a financial guarantee, including signatures. Not paying
Contract act 2. Agreement on the part of the guarantor to fulfill the promises of the borrower.
3. Payment terms and amount of loan or debt guaranteed.
4. Form of repayment, because the guarantor can put up any form of collateral, including goods or services.
5. Stipulation that the guarantee can only be acted on in the event of a contract breach

Commercial Agreements Chart

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Commercial Agreements Chart

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Commercial Agreements Revision Chart

Agreement Law Key Provisions Common Issues

Shareholder Companies Important terms included in a Shareholders Agreement cover; Deadlocks

Distributorship Competition ● Purpose of the Distribution Agreement Forecasting not done

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