LEGAL PRACTICE COURSE
Commercial Law and Practice
Workshop 2: Suggested Answer (with footnotes)
Long term purchasing or supply agreement
THIS AGREEMENT is made the...... day of.........
PARTIES
(1) (buyer)[of (address) (or) whose registered office is at (address), company registration
no (number)] (‘the Buyer’); and
(2) (seller)[of (address) (or) whose registered office is at (address), company registration
no (number)] (‘the Seller’).
RECITALS
(A) The Seller deals in the Goods.
(B) The Buyer wishes to buy Goods from the Seller for [the purpose of resale (or) use in
the Buyer’s factory]1.
NOW IT IS AGREED as follows:
1 Definitions
In this Agreement, the following terms shall have the following meanings:
1.1 ‘Commencement Date’ means [16 May 2020]2;
1.2 ‘Delivery Date’ means the date stipulated in a contract for the delivery of the Goods;
1.3 ‘Goods’ means goods of the type set out in Schedule 1;
1.4 ‘Order’ means a written order on the Seller’s prescribed form given in accordance
with clause 2.2 below;
1.5 ‘Price’ means the price of the Goods ascertained in accordance with the Seller’s list
given from time to time;
1.6 ‘Quarter’ means the period of 3 months commencing on the Commencement Date,
each succeeding period of 3 consecutive months, and any shorter period between the
end of a quarter and the date on which this Agreement terminates. ‘Quarterly’ shall
be construed accordingly3;
1
The Recitals have been moved from Clause 2 so that they are now, as is customary, above the
operative agreement. The document has been re-numbered accordingly.
2
No date was provided – this is a suggested date which is why it is shown in square brackets.
However we do know that the first batch of goods needs to be delivered by 16 August 2020 and that it
will take between 8 to 10 weeks from placing of order to delivery. This date is therefore a suggested
date and would need confirmation.
3
This links to the lead time specified in clause 2.2.1. Although Seramica can in fact deliver within 8 to
10 weeks of the placing of the order, it seems sensible to allow them 3 months (ie. an extra 2 weeks)
to minimise the risk of late delivery. From a drafting point of view it also makes life easier as there is
no need to redefine the period to something other than “Quarter.”
docs_615915557.docx 1/6 © City, University of London 2020
, LEGAL PRACTICE COURSE
1.7 ‘Specification’ means the description of the Goods set out in Schedule 2 or any
other description of the Goods agreed by the parties in writing from time to time;
1.8 ‘Term’ means the period from the Commencement Date until this Agreement
terminates;
1.9 ‘Year’ means a period of 4 consecutive Quarters.
2 Supply of products
2.1 Subject to the provisions of this clause 2, the Seller shall accept Orders from the
Buyer to buy Goods from the start of business on the Commencement Date.
2.2 Every Order shall:
2.2.1 allow the Seller no less than one Quarter of lead time between receipt of the
Order and the Delivery Date;
2.2.2 specify by reference to the product numbers4 stipulated in Schedule 1 the
Goods which are to be supplied; and
(b) in D2e
2.2.3 correctly specify the Price of the Goods which are to be supplied.
2.3 The Seller shall not be bound to accept Orders for the delivery of:
2.3.1 less than five thousand (5,000) pieces of any type of the Goods at any
time5; and
(f) in D2e
2.3.2 more than six hundred thousand (600,000) pieces of all types of the Goods
for delivery in any Quarter
(f) in D2e: At full capacity Seramica can manufacture up to 50,000 tiles per week→ so a quarter is 12
weeks so multiple to get 600k
If the Seller shall accept any Orders for less than the capacity limit in 2.3.1 or in
excess of the capacity limits in 2.3.26 then the Seller shall be bound to perform
them.
4
There is more than one product number (so put it in the schedule)
5
This needs adapting to cover the fact that no order should be placed for a batch of less than 5,000
tiles of the same size and type.
6
Consequential amendments needed here to cover the fact that we now have a minimum limit in
clause 2.3.1 as opposed to a maximum limit.
© City, University of London 2020 2/6 docs_615915557.docx
Commercial Law and Practice
Workshop 2: Suggested Answer (with footnotes)
Long term purchasing or supply agreement
THIS AGREEMENT is made the...... day of.........
PARTIES
(1) (buyer)[of (address) (or) whose registered office is at (address), company registration
no (number)] (‘the Buyer’); and
(2) (seller)[of (address) (or) whose registered office is at (address), company registration
no (number)] (‘the Seller’).
RECITALS
(A) The Seller deals in the Goods.
(B) The Buyer wishes to buy Goods from the Seller for [the purpose of resale (or) use in
the Buyer’s factory]1.
NOW IT IS AGREED as follows:
1 Definitions
In this Agreement, the following terms shall have the following meanings:
1.1 ‘Commencement Date’ means [16 May 2020]2;
1.2 ‘Delivery Date’ means the date stipulated in a contract for the delivery of the Goods;
1.3 ‘Goods’ means goods of the type set out in Schedule 1;
1.4 ‘Order’ means a written order on the Seller’s prescribed form given in accordance
with clause 2.2 below;
1.5 ‘Price’ means the price of the Goods ascertained in accordance with the Seller’s list
given from time to time;
1.6 ‘Quarter’ means the period of 3 months commencing on the Commencement Date,
each succeeding period of 3 consecutive months, and any shorter period between the
end of a quarter and the date on which this Agreement terminates. ‘Quarterly’ shall
be construed accordingly3;
1
The Recitals have been moved from Clause 2 so that they are now, as is customary, above the
operative agreement. The document has been re-numbered accordingly.
2
No date was provided – this is a suggested date which is why it is shown in square brackets.
However we do know that the first batch of goods needs to be delivered by 16 August 2020 and that it
will take between 8 to 10 weeks from placing of order to delivery. This date is therefore a suggested
date and would need confirmation.
3
This links to the lead time specified in clause 2.2.1. Although Seramica can in fact deliver within 8 to
10 weeks of the placing of the order, it seems sensible to allow them 3 months (ie. an extra 2 weeks)
to minimise the risk of late delivery. From a drafting point of view it also makes life easier as there is
no need to redefine the period to something other than “Quarter.”
docs_615915557.docx 1/6 © City, University of London 2020
, LEGAL PRACTICE COURSE
1.7 ‘Specification’ means the description of the Goods set out in Schedule 2 or any
other description of the Goods agreed by the parties in writing from time to time;
1.8 ‘Term’ means the period from the Commencement Date until this Agreement
terminates;
1.9 ‘Year’ means a period of 4 consecutive Quarters.
2 Supply of products
2.1 Subject to the provisions of this clause 2, the Seller shall accept Orders from the
Buyer to buy Goods from the start of business on the Commencement Date.
2.2 Every Order shall:
2.2.1 allow the Seller no less than one Quarter of lead time between receipt of the
Order and the Delivery Date;
2.2.2 specify by reference to the product numbers4 stipulated in Schedule 1 the
Goods which are to be supplied; and
(b) in D2e
2.2.3 correctly specify the Price of the Goods which are to be supplied.
2.3 The Seller shall not be bound to accept Orders for the delivery of:
2.3.1 less than five thousand (5,000) pieces of any type of the Goods at any
time5; and
(f) in D2e
2.3.2 more than six hundred thousand (600,000) pieces of all types of the Goods
for delivery in any Quarter
(f) in D2e: At full capacity Seramica can manufacture up to 50,000 tiles per week→ so a quarter is 12
weeks so multiple to get 600k
If the Seller shall accept any Orders for less than the capacity limit in 2.3.1 or in
excess of the capacity limits in 2.3.26 then the Seller shall be bound to perform
them.
4
There is more than one product number (so put it in the schedule)
5
This needs adapting to cover the fact that no order should be placed for a batch of less than 5,000
tiles of the same size and type.
6
Consequential amendments needed here to cover the fact that we now have a minimum limit in
clause 2.3.1 as opposed to a maximum limit.
© City, University of London 2020 2/6 docs_615915557.docx
