Under a Distribution Agreement a distributor buys goods from the manufacturer and re-sells them on his own account. The Definitions Clause of an agreement is usually found at the beginning. It specifies the ways terms are to be understood in the agreement.
Match the following definitions to their descriptions.
1.1 In this Agreement the following expressions shall have the following meanings:
(1) 'the Products' (4) 'the Non-Exclusive Territory'
(2) 'the Trade Mark' (5) 'the Commencement Date'
(3) 'the Territory' (6) 'the Term'
1.2 In addition the following interpretations shall apply:
(7) - the singular shall include the plural and vice versa
(8) - persons shall include corporations, firms and organizations and vice versa
(9) - any gender shall include all genders
(10) - reference to sales and the selling of the Product to customers of the Distributor shall be deemed to include any lease or hire purchase of the same
name or symbol reserved by a manufacturer to identify their products
the area applicable to the agreement, as described in Part 2 of Schedule 2
reference to one may mean many
the business relationship may include payment to use the goods as well as payment by instalment for the goods
reference to a person shall include non-persons
reference to male may include female
the goods to be sold by the company
period of time during which the agreement shall remain in force
the time when the agreement shall come into force
the area described in Part 1 of Schedule 2 in which other distributors may be appointed
A franchise is the granting by an individual (the franchisor) to another individual (the franchisee) of the right to run a business in the name of the franchisor. Examples include Body Shop and McDonalds. Some franchises are exclusive, in other words, no other franchise may be granted in that area. Where the franchise is exclusive the franchisors will want to ensure uniformity with other franchises so that the reputation of the business is not damaged by one particular franchisee. Accordingly, Franchise Agreements tend to be broadly non-negotiable.
Read through Clause 5 on the obligations of the franchisor and then answer the True/False questions below.
5. OBLIGATIONS OF FRANCHISOR
During the Term the Franchisor shall:
5.1. permit the Franchisee to operate the Business and to use the Name and the Marks in accordance with the terms of this Agreement;
5.2. provide the Franchisee with a copy of the Manual and any amendments or updates of the same;
5.3; make available to the Franchisee such services as it makes available to other Franchisees;
5.4. provide the Franchisee with general advice and know-how relating to the Method;
5.5. provide within 30 days of the Commencement Date the Initial Training for the Training Fee;
5.6. within 30 days of the Commencement Date supply the Franchisee with the Equipment at the Equipment Fee;
5.7. not itself operate or grant the right to operate a business in competition with the Business in the Territory;
5.8. update the Manual with any improvements to the Method;
5.9. keep the Franchisee informed of all relevant legislation
True or False
may not allow others to set up a competing business in the same area
needn't inform the franchisee about new laws
must give the franchisee the operating instructions for the franchise
must allow the franchisee to use any names and trade marks so that the franchisee can develop the business
needn't treat all franchisees in the same way
must train the franchisee in how to operate the business as set out in the instructions
must supply the franchisee with the equipment needed by the business