INDUCTION MODULE

The Definitive Contract - Sample Clause

Checklist
 Induction Module
The Definitive Contract - Sample Clause Checklist

This Definitive Contract - Sample clause checklist has been drafted in a manner such that the
language can be used for drafting clauses for other agreements as well. Please note that the
clauses sampled below are not exhaustive, and the drafter has to apply their skills and legal
knowledge while drafting other nuanced clauses.

This Sample clause checklist has to be read in conjecture with the Definitive Contract
Checklist

Sample Clause Comments

1 Title

“Exclusive Supplier Agreement”

2 Date

This Exclusive Supplier Agreement is made on this [—] day of [—],

2022, (“Effective Date”) by and between:

3 Details of parties

“XYZ PRIVATE LIMITED, a private limited company incorporated

under the Companies Act, 1956 and having corporate
identification number [—] and registered office at[—] (hereinafter
referred to as the “Company”, which expression shall, unless
repugnant to the context or meaning thereof, include its
successors in title and permitted assigns) OF THE FIRST PART;
AND
ABC PRIVATE LIMITED, a private limited company incorporated
under the Companies Act, 2013 and having corporate
identification number [—] and registered office at [—] (hereinafter
referred to as the “Manufacturer”, which expression shall, unless
repugnant to or inconsistent with the context or meaning thereof,
be deemed to mean and include its successors and permitted
assigns) OF THE SECOND PART.

The Company and Manufacturer shall hereinafter be collectively

referred to as “Parties”, and individually as “Party”.”

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4 Recitals

WHEREAS:

a) The Company is in the business of exporting, sales, marketing

and distribution of various products in the territory
(“Business”);
b) The Manufacturer is engaged in the business of manufacturing
and sale of the products listed in Annexure B hereof in the
agreement (“Products”);
c) The Parties have initiated discussions and pursuant to the
same, the Company proposes to appoint the Manufacturer as
its exclusive Manufacturer of the Products in the territory, and
the Manufacturer accepts the same, as on the Effective Date,
on the terms and conditions set forth hereunder.

NOW, THEREFORE, IN CONSIDERATION OF THE PREMISES AND

THE REPRESENTATIONS, WARRANTIES, MUTUAL COVENANTS
AND UNDERTAKINGS CONTAINED HEREIN, AND FOR OTHER
GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND
SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, THE
PARTIES HERETO AGREE AS FOLLOWS

5 Definitions

“Act” shall mean the Companies Act, 2013 together with the rules
and regulations thereunder, as may be amended, modified,
supplemented, or re-enacted from time to time;

“Overheads” shall mean, with respect to the Product(s), identified

overheads and other out of pocket expenses including shipping
and transport insurance incurred by the Manufacturer;

“Term” shall have the same meaning ascribed to it in Clause 8.1 of

this Agreement.

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6 Interpretation

1. In this Agreement unless the context thereof otherwise

requires, references to Recitals, Clauses, Annexures and
Paragraphs in Annexures are references respectively to the
recitals, clauses, and paragraphs in the Annexures to this
Agreement;
2. words importing the singular include the plural and vice versa;
3. words denoting the masculine gender shall include the
feminine gender and neuter gender;
4. unless stated otherwise the words “include” and “including”
shall be construed without limitation;
5. a reference to any document (including this Agreement) is to
that document as amended, consolidated, supplemented,
novated or replaced from time to time.

7 Obligations

1. Company’s obligations may include as follows:

During the Term, the Company shall (i) source the Products from
the Manufacturer (on an exclusive basis); (ii) supply the key
starting material for the Products to the Manufacturer as per the
standard practice of the Company; and (iii) pay the Manufacturer
any Overheads.

2. Manufacturer’s obligations may include as follows:

Manufacturer shall not offer to sell, sell, or make available the

Products or sample of Products, or quote the price of the
Products, directly or indirectly, or market and/promote the
Products to any person (other than the Company) for any purpose
or reason on any platform or media.

The Manufacturer shall provide the Products to the Company

within 14 (Fourteen) days of receiving the order invoice from the
Company.

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8 Consideration, Mode of Payment and Default

The Manufacturer shall raise an invoice alongwith the dispatch of

the Products and the Company shall pay the same within 14
(Fourteen) days of receiving such invoice.

All payments/credits to the Manufacturer shall be made after the

deduction of withholding tax in accordance with the applicable
provisions of the Income-tax Act, 1961.

Payment shall be made to the bank account of the Manufacturer

as provided: [—]

In the event the Company fails to make the payments timely, an

interest of 2% will be charged on the pending amount accruing
from the due date to the date of payment actually made.

Any subsequent failure to make payment will result in an Event of

Default and the Manufacturer will be entitled to terminate the
agreement.

9 Representations and Warranties

Each Party represents and warrants to the other Party as follows:

a) its charter documents include provisions which give it the

power, and all necessary corporate approvals have been
obtained, to sign and deliver this Agreement and exercise its
rights and perform its obligations under this Agreement;
b) it is validly incorporated and is in good standing under the
laws of India;
c) it is not prohibited from entering into this Agreement; and
d) none of: (a) the execution, delivery and performance of this
Agreement, (b) the consummation of the transactions
contemplated by this Agreement, or (c) compliance with the
provisions of this Agreement, will: (i) conflict with or breach
any Applicable Laws, subject to receipt of all consents,
approvals, authorizations as required under Applicable Laws;

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or (ii) violate or breach a provision of, or constitute a default

(or an event which, with notice or lapse of time or both would
constitute a default) under any of the terms, covenants,
conditions or provisions of any other instrument, or obligation
to which any of the Parties is a party, so as to render the
transactions envisaged under this Agreement void or
unenforceable.

10 Term and Termination

This Agreement shall come into effect on the Effective Date and
shall continue to remain valid for a period of 3 (Three) years from
the Effective Date (“Term”). These Parties may mutually agree to
renew this Agreement prior to the expiry of its Term.

The Parties may mutually agree in writing to terminate this

Agreement.

Notwithstanding anything to the contrary contained herein, this

Agreement may be terminated by the Company with immediate
effect under the following circumstances:

a) if, the Manufacturer commits breach of any of terms or

conditions of this Agreement and such breach is not remedied
or cured to the satisfaction of the Company within a period of
[—] days of the date of notice given by the Company to the
Manufacturer; or
b) if the Manufacturer goes into voluntary or involuntary
liquidation or is declared insolvent either in bankruptcy
proceedings or other legal proceedings.

Neither the expiration or termination of this Agreement shall

release any of the Parties from the obligation to perform any duty
or to discharge any liability that has been incurred prior to such
expiration/termination.

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On the termination or determination of this Agreement each Party

shall return all Confidential Information of the other Party in their
possession.

11 Confidentiality

Confidential Information for an edu-tech company would involve

the following information, inter alia:

“Confidential Information” means any and all materials,

documents, course curriculum, records, research, photography,
logos, designs, software, domain names, or other property/
information/ data belonging to Company, which are provided to
Service Provider by or on behalf of Company (including copies of
Company’s brand guidelines and/or policies) and/or otherwise
come into the possession, custody or control of Service Provider
in connection with provision of the services”

General confidentiality obligations may be imposed as follows:

Each Party agrees and undertakes that a Party (the "Disclosing

Party") shall not disclose and shall use their best efforts to ensure
that its Representatives or Affiliates to whom Confidential
Information is made available do not disclose, to any third party
any Confidential Information.

Exceptions:

The provisions of the clause above, however, shall not apply to:

a) disclosure with the prior written consent of the non-disclosing

Party; or

b) disclosure of information that is or comes into the public

domain or becomes generally available to the public otherwise
than through the act or omission of or as a result of disclosure
by or at the direction of the Disclosing Party; or

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c) disclosure by the Disclosing Party to its Representatives or

Affiliates on a need-to-know basis for the purpose of
implementing this Agreement; or

d) disclosure after giving prior written notice to the

non-disclosing Party as practicable and necessary under the
circumstances, to the extent required by law, any court of
competent jurisdiction or any competent judicial,
governmental, supervisory or regulatory body or under a
judicial process.

12 Intellectual Property

The definition of Intellectual Property must be as exhaustive as

possible in order to safeguard your client’s IP rights:

“Intellectual Property” means all intellectual property including

patents, inventions, utility models, trade and service marks, trade
names and the goodwill associated therewith, the domain names,
websites, mobile applications, URLs, Platform, right in designs,
copyrights, rights in databases, proprietary rights, technical
commercial or financial information of a proprietary or
confidential nature (including without any limitation,
manufacturing and production processes and techniques,
software and technology, improvements, customer proposals,
customer and supplier information, technical and computer data
and software), trade secrets and knowhow, in all cases whether or
not registered or registrable and including registrations and
applications for registrations or renewal of any Intellectual
Property, and all rights to apply for the same, rights to receive
equitable remuneration in respect of any Intellectual Property and
all rights and forms of protection of a similar nature or having
similar or equivalent effect to any Intellectual Property anywhere
in the world.”

It is hereby agreed that any of Company’s Intellectual Property

that has been provided or handed over to the Manufacturer for
the purposes of performance of its obligations under this

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Agreement, shall at all times through the Term and thereafter,

remain the property of Company and Company shall have
absolute ownership rights and title over the same.

In the event of termination or expiry of this Agreement, the

Manufacturer shall hand over the Intellectual Property to
Company within 7 (Seven) calendar days of such termination/
expiration or deal with the Intellectual Property in the manner as
may be directed by Company in writing.

Manufacturer shall not have any rights of lien over Company’s

Intellectual Property.

13 Indemnity and Remedies for Breach

Manufacturer shall indemnify and hold harmless, the Company,

its representatives and agents promptly upon demand at any time
and from time to time, from and against any and all losses, claims,
damages, liabilities and costs (including attorney’s fee and
disbursements) and expenses to which the other Party (and/or its
directors, employees, representatives and agents) may become
subject or incur (collectively, “Losses”), which directly arise out of,
or result from, or in any way relate to or may be payable by virtue
of:

a) failure or breach by the Manufacturer of any representation,

warranty, covenant or other obligations set forth in this
Agreement;
b) breach of any Applicable Law;
c) any loss or breach of data of Company;
d) any alleged or actual infringement of third party intellectual
property rights;
e) negligence or more culpable act or omission of the defaulting
Party (including any recklessness or misconduct) in connection
with the performance of its obligations under this Agreement;
and
f) any unauthorized disclosure or misuse of the other Party’s
Confidential Information.

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14 Governing Law and Dispute Resolution

This Agreement shall be governed by and interpreted and

construed in accordance with the laws of India and the competent
courts of Mumbai shall have sole and exclusive jurisdiction in
respect of any dispute or difference between the parties arising
under this Agreement.

Any dispute between the Parties arising out of or in connection

with whole or any part of this Agreement shall be referred to and
resolved by arbitration by a sole arbitrator jointly appointed by
the disputing Parties, wherein the place and the seat of arbitration
shall be in Mumbai, India, in accordance with the (Indian)
Arbitration and Conciliation Act, 1996 or any statutory
re-enactment thereof, as may be in force then.

The language to be used in the arbitration proceedings shall be

English.

The fees and expenses of the arbitrator and incidental costs such
as venue booking, administrative expenses etc. shall be shared
equally by the Parties unless the award provides otherwise. Any
other costs and expenses shall be borne by the respective Parties.
Nothing shall preclude a Party from seeking interim equitable or
injunctive relief, or both, from any governmental authority or
court having jurisdiction to grant the same. The pursuit of
equitable or injunctive relief shall not be a waiver of the rights of
the Parties to pursue any remedy through arbitration under this
clause.

15 Waiver

Failure to exercise, or any delay in exercising, any right, privilege

or remedy provided under this Agreement or provided by law
shall not constitute a waiver of that or any other right, privilege or
remedy, nor shall it preclude or restrict any further exercise of
that or any other right, privilege or remedy.

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No single or partial exercise of any right, privilege or remedy

provided under this Agreement or provided by law shall preclude
or restrict the further exercise of that or any other right, privilege
or remedy.

16 Non-Solicit and Non-Compete

Non-Solicit would be as follows:

The Receiving Party shall not, without the express written consent
of the Disclosing Party, during and for a period of 1 (One) year
after the date the termination of this Agreement either directly or
indirectly solicit for employment, employ or otherwise contract for
the services of any person who is an employee of Disclosing Party
or related to the Disclosing Party in any manner.

Non-Compete (usually in Employment Agreements or where the

parties are exclusively engaging with each other) would be as
follows:

The Manufacturer undertakes to the Company that he shall not

and shall ensure that none of his affiliates shall, either on his own
account or in association with others engage or participate
directly or indirectly, whether as shareholder, director, partner,
proprietor, member, agent, distributor, employee or otherwise,
within India or outside India, during the period of his service in
whatever capacity with the Company and for a further period of 1
(One) year from the date of ceasing to be in such service, for
whatever reasons:

a) in any business which, involves, relates to or competes with the

Company’s Business; and
b) establish, develop, carry on or assist in carrying on or be
engaged, concerned, interested or employed in any business
enterprise or venture competing with the Company’s Business.

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17 Assignment

Except as otherwise provided in this Agreement, no Party shall

assign, sub-contract or deal in any way with, any of its rights or
obligations under this Agreement.

Parties may assign their rights under this Agreement to any

third-party on prior written notice to the other Party.

18 Severability

If any provision of this Agreement is invalid, unenforceable or

prohibited by law, this Agreement shall be considered divisible as
to such provision and such provision shall be imperative and the
remainder of this Agreement shall be valid, binding and of like
effect as though such provision was not included herein.

19 Amendment

No modification, amendment, or waiver of any provision of this

Agreement shall be effective unless each Party approves it in
writing and signed in person or by an authorised representative of
the Party.

20 Entire Agreement

This Agreement constitutes the whole agreement between the

Parties and supersedes all previous agreements between the
Parties relating to its subject matter.

Each Party acknowledges that, in entering into this Agreement, it

has not relied on, and shall have no right or remedy in respect of,
any statement, representation, assurance or warranty (whether
made negligently or innocently) other than as expressly set out in
this Agreement.

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21 Change of Control

This clause is usually triggered in financial transactions where

managements of the parties are involved, and they may be as
follows:

In the event that the Company undergoes a change in control

where voting or other control of Company is acquired, directly or
indirectly, in a single transaction or series of related transactions,
or all or substantially all of Company’s assets are acquired, by any
entity, or Company is merged with or into another entity to form a
new entity, then, at any time within [—] days/months after the last
of these events to occur, the Investor may terminate this
Agreement by (a) giving Company [—] calendar days’ prior written
notice and (b) designating a date upon which the termination(s)
will be effective.

22 Notices

All the communications and correspondences under and

pursuant to this Agreement (including any invoices, notice of
event of Force Majeure) to Company shall be to the attention of
Mr. [—] and shall be sent in writing to the following email address:
[—]

Hard copies of the invoices and order related documents if any,

shall also be couriered to Company at its registered address
provided hereinabove.

Any notice or other communication shall be deemed to have been

duly received:

a) if delivered personally, when left at the address and for the

contact referred to in this clause; or
b) if sent by pre-paid first-class post or recorded delivery, at 9.00
am on the second business day after posting; or
c) if delivered by commercial courier, on the date and at the time
that the courier's delivery receipt is signed; or

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d) if sent by e-mail.

23 Limitation of Liability

To the maximum extent permitted by applicable law, in no event

shall Manufacturer or its affiliates be liable for any special,
incidental, indirect, or consequential damages whatsoever
(including, without limitation, damages for loss of business profits,
business interruption, loss of business information, or any other
pecuniary loss) however caused and on any legal or equitable
theory of liability, and whether or not for breach of contract,
negligence or otherwise, even if Manufacturer has been advised
of the possibility of such damages. These limitations will apply
notwithstanding any breach of condition(s) or fundamental
term(s) or for a fundamental breach(es). In any case,
Manufacturer’s entire liability under any provision of this
Agreement shall be limited to the amount received by the
Manufacturer from the Company for the services rendered
pursuant to this Agreement.

This limitation of liability is cumulative with all such Party’s

expenditures being aggregated to determine satisfaction of the
limit.

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24 Force Majeure

Event of “Force Majeure” means any event reasonably beyond

the control of the affected Party, including wars, hostilities,
revolutions, riots, civil commotion, national emergency,
epidemics, pandemic as declared by the appropriate
Governmental Authority, fire flood, earthquake, force of nature,
explosion, terrorist act, embargo, or any other act of God.

In the event of the failure of either Party to perform its obligations

under this Agreement due to an event of Force Majeure, such
failure shall not be construed as breach of performance of such
Party this Agreement. The affected Party shall be excused from
performance of its obligations upon occurrence of an event of
Force Majeure preventing performance and shall not be liable for
the same so long as the affected party gives a reasonable written
notice to the other Party explaining the difficulty in performing
and notifying such event of Force Majeure, and the Parties agree
upon the same in writing.

In the event of failure of the Parties to agree upon the excusal of

the affected Party’s obligations, or upon an agreed prolonged
event of Force Majeure beyond 30 (thirty) days, the Parties may
either mutually terminate the Agreement or decide a further
course of action to address the same. The Parties shall continue to
perform all other obligations during the existence of event of
Force Majeure which are not affected by the occurrence of the
event of Force Majeure.

25 Exclusivity

The Company agrees not to appoint any other Manufacturer for

the services for the Term of this Agreement and so long as the
Manufacturer is responsible for manufacturing Product(s) for the
exclusive use of the Company within the specified territory.

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26 Third Party Rights

This Agreement is made for the benefit of the Parties to it and

their successors and permitted assignments and is not intended
to benefit, or be enforceable by, anyone else.

The Parties may terminate, rescind or vary this Agreement

without the consent of any person who is not a party to this
Agreement.

27 No Partnership

Nothing in this Agreement is intended to, or shall be deemed to,

establish any partnership or joint venture between any of the
Parties, constitute any Party the agent of another Party, nor
authorise any Party to make or enter into any commitments for or
on behalf of any other Party.

28 Counterparts

This Agreement may be signed in two counterparts, each of which

is an original and all of which, taken together, constitutes one and
the same instrument.

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