Trading Agreements

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• Trading Agreements

When considering your proposed trading agreements, our priority is to understand:

• The commercial intention behind the agreement
• What you regard as your strengths and weaknesses
• Exactly what your interests are

How we formulate an effective approach

We use our experience to advise you on issues likely to affect your intentions. Working as a team with you, we like to summarise the terms of an agreement in bullet point form. This identifies:

• Your objective interest (often involving the strengthening of the relationship with the other trading partner)
• The required legal protections we have discussed with you

There are many different types of trading agreements, but we approach them all with this philosophy.

What we look for from a legal point of view

Key things we look for from the legal point of view are:

1. The identity of the other trading partner and its financial strength
2. An exact description of the obligations to be undertaken by the parties to the agreement, whether they be the supply of goods or services
3. The price to be paid, and the way the price is adjusted in the case of a long term agreement
4. The term of the agreement and the grounds on which it can be terminated earlier
5. Any restrictions to be exacted by either party (which may well involve consideration of competition law as well as issues of reasonableness/enforceability)
6. Security issues – for example if our client is the Seller, then parent company guarantee by the Buyer, title retention, ability to terminate for non-payment and ability to suspend services for non-payment
7. If our client is the Buyer, then quality issues as for example key performance indicators, penalties in respect of services, inspection and acceptance regimes for products
8. The choice of jurisdiction and tribunal in the case of international contracts, and whether to stipulate dispute resolution procedures and arbitration

This is not intended to be an exhaustive guide to preparing trading agreements, but we hope that it gives you an indication of our approach.

Why we are particularly strong in this area

We can offer you extensive expertise and experience in dealing with trading agreements. There are very few – if any – trading agreements our team hasn’t prepared, negotiated and even subsequently dealt with disputes on.