CONSIGNMENT RETAIL SHOWROOM AGREEMENT

CONSIGNMENT RETAIL SHOWROOM AGREEMENT

This agreement is executed at ____________ on ____________ by and between:

M/s ____________________ (hereinafter called the "FIRST PARTY", which expression shall, unless repugnant to the context or meaning thereof, be deemed to include its successors-in-business, executors, administrators, and lawful assigns);

AND

M/s ____________________ (hereinafter called the "SECOND PARTY", which expression shall, unless repugnant to the context or meaning thereof, be deemed to include its successors-in-business, executors, administrators, and lawful assigns).

WHEREAS the FIRST PARTY wants to carry out the business of retailing and storing such products on the below-mentioned property belonging to/leased by the SECOND PARTY;

AND WHEREAS after mutual discussion the FIRST PARTY selected the air-conditioned showroom of the SECOND PARTY, measuring about ______ sq. ft., located at ____________________, as the outlet for the retail sale of the said products ____________________; and therefore the parties have entered into this agreement on the following terms and conditions:

1. That both the parties agree that the proposed retail showroom is to be exclusively used as a retail outlet for the products supplied by the FIRST PARTY. Any additional premises, if offered by the SECOND PARTY, shall be added with the mutual approval of both the parties.

2. All the renovation charges — like air conditioning, flooring, ceiling, lighting and all glasswork, electric fitting, generator/inverter sets, etc. — will be provided by the SECOND PARTY as per the specifications/instructions/drawings and requirements of the FIRST PARTY. The Architect will be provided/fixed by the FIRST PARTY.

3. However, all interior decoration work, including the woodwork, wall modules, floor modules and cash counters, shall be supplied and installed at the cost of the FIRST PARTY, which will subsequently be adjusted between the parties as expenses.

4. The SECOND PARTY shall arrange for sufficient electrical load and all other infrastructural facilities and utilities, including the common services, for properly operating and running the showroom as per the requirement of the FIRST PARTY; the cost of the same shall be borne by the SECOND PARTY exclusively. The SECOND PARTY shall also pay house tax or any other property tax imposed by the local municipal authorities, ground rent, etc., or any charges by any Govt. agency or local bodies from time to time. All dues of any type raised afterward, pertaining to the period before the date of execution of this deed, shall be cleared by the SECOND PARTY. The SECOND PARTY shall not subject the FIRST PARTY to any dispute whatsoever before any authority, court or Tribunal.

5. That the SECOND PARTY will store and sell the products in the said fully furnished showroom. All the stock will belong to the FIRST PARTY. The FIRST PARTY is fully entitled to sell its products at the rates decided by it from time to time. The rates/sale price/discounts and date of discount sale period will be decided by the FIRST PARTY from time to time. The FIRST PARTY is also entitled to launch any promotional schemes independently, to promote sales according to the market situations and the feedback supplied by the marketing staff.

6. That the agreement shall come into effect from ____________. The FIRST PARTY shall dispatch and deliver the goods to the SECOND PARTY on a consignment basis at the showroom premises. The freight of goods sent on consignment shall be borne by the FIRST PARTY, i.e. the goods/products shall be supplied to the SECOND PARTY on F.O.R. basis at the showroom.

7. MRP of the goods supplied by the FIRST PARTY will be at par with similar goods stocked at other franchisee outlets of the FIRST PARTY in the country; and in consideration of the above, the SECOND PARTY would be entitled to a commission/margin, which will be reconciled on a monthly basis. Income Tax, if any payable, shall be deducted before release of the margin money. The parties will work out a ratio and mechanism for distribution of the commission and the expenses as explained under this agreement.

8. That the FIRST PARTY shall bear and deposit the local Sales Tax/VAT or any other service tax, etc., as per the applicable tax rules, and the SECOND PARTY shall maintain all the records of the same.

9. That the showroom will be run/managed/controlled by the SECOND PARTY. All the staff/sales employees will be employed by the SECOND PARTY. All incidental expenses — i.e. wages/salary, telephone, electricity and water consumption charges, cleaning/upkeeping expenses of the showroom, postal/courier charges, credit card/bank commissions, etc., i.e. all running expenses — will be borne by the FIRST PARTY.

10. That the SECOND PARTY shall be responsible for any shortage or loss due to pilferage or damage to the goods. However, the SECOND PARTY shall not be held liable for the damage/loss that may be incurred due to reasons beyond the control of the SECOND PARTY — i.e. fire, theft, burglary, etc., or natural calamities like flood, earthquake, etc. — which would be cleared by the Insurance Company and the claims payable to the FIRST PARTY.

11. The FIRST PARTY will supply stationery/packing materials free of cost, and other items required by the SECOND PARTY to facilitate the customers, as and when required.

12. That the SECOND PARTY takes all insurance related to the showroom building, furniture, fixtures, electrical fittings, generator sets, air conditioners, etc., and will bear all its insurance premium. Maintenance expenses of all the capital items will be borne by the SECOND PARTY.

13. Stocks are to be adequately insured for all risks (theft, fire, riots, etc.), with the policy stating the beneficiary as the FIRST PARTY in the event of any claim. The cost of all such insurance will be borne by the FIRST PARTY.

14. That all the expenses, at any stage and in all conditions and circumstances, of advertisements will be borne and arranged by the FIRST PARTY to promote the sales of the products of the Company.

15. The FIRST PARTY shall maintain adequate stock of goods of value not less than Rs. ____________.

16. That the FIRST PARTY shall take back all the non-saleable stock (stock left after organizing a clearance sale) lying with the SECOND PARTY, and the SECOND PARTY shall not bear the payment of such stocks.

17. The SECOND PARTY will not misuse the trademark of the FIRST PARTY in any manner, or any other trademark under which the goods are supplied by the FIRST PARTY. In no way will the SECOND PARTY use these trademarks for any business during/after the agreement, other than the business of the Company, and that too with the consent of the Company. The SECOND PARTY will ensure that all the brands and the image of the Company are kept safely.

18. The SECOND PARTY arranges to give a refundable security of Rs. ____________, to be refunded after expiry/termination of the contract by the FIRST PARTY, and the stocks belonging to the FIRST PARTY shall be lifted simultaneously.

19. That this agreement is for the period of ____________ from the date of opening of the showroom, which may be extended as mutually agreed on revised terms.

20. Any variation in the terms and conditions of this agreement will be done by the mutual consent of the parties hereto, which must be reduced into writing and shall form part and parcel of this agreement.

21. That on the termination or cancellation of this agreement, either party has to give three months' notice to the other party. The FIRST PARTY has full right to get all its stocks, stationery, accessories, and whatever is supplied by the Company, along with advertising, account books and other records. The SECOND PARTY will have no objection.

22. OWNERSHIP AND CUSTODY OF GOODS
It is specifically understood and agreed by and between the parties that at all times the Company (FIRST PARTY) shall be the sole and exclusive owner of the products supplied or transferred by the FIRST PARTY to the SECOND PARTY under this agreement, and/or in the possession of the SECOND PARTY, or in transit. Nothing herein contained shall be deemed or intended to create any proprietary rights in the products in favour of the Consignment Agent. The products shall always belong to, and remain in the judicial custody of, the FIRST PARTY.
(A) The SECOND PARTY shall not have or claim any right, title, interest, claim or demand in the products entrusted to them, and they shall not have any lien or other claims whatsoever in or upon the products.
(B) The SECOND PARTY shall not purport to hypothecate or create any right whatsoever in respect of the products entrusted to them under this agreement.
(C) The SECOND PARTY shall not pledge, loan, gift, or in any other manner deal with, dispose of or destroy the products, or do any act, deed or thing whereby any right, title or interest of the FIRST PARTY in the products entrusted to the SECOND PARTY is in any manner adversely affected.
(D) The SECOND PARTY shall ensure proper and safe custody of the stock of the FIRST PARTY.
(E) The FIRST PARTY shall be entitled to conduct physical stock verification of the stock and/or the books of accounts maintained by the SECOND PARTY, either by its own employees or by auditors or through any other person, periodically or at any time as may be convenient during a working day. In the event of there being any difference between the physical stock and the stock as per the books of the FIRST PARTY, then the value of such stock at the wholesale price less commission shall be compensated to the FIRST PARTY by the SECOND PARTY immediately, failing which the amount involved shall be recovered from the commission payable to the SECOND PARTY by the FIRST PARTY.

23. FORCE MAJEURE
If the performance by either party of any of its obligations under this agreement shall be in any way prevented or hindered in consequence of any Act of God or State, or any other circumstances beyond the parties' anticipation or control, performance of this agreement shall be wholly or partially suspended during the continuance and to the extent of such prevention, interruption or hindrance; provided that notice in writing of such happening(s) or event(s) is given to the other party within 15 days of such happening(s) or event(s).

24. If there is any dispute regarding the interpretation of the terms of this agreement, or anything done or omitted to be done in pursuance hereof, the same shall be referred to the arbitration of an arbitrator to be appointed by both the parties, and such arbitration shall be held at ____________ in accordance with the provisions of the Arbitration and Conciliation Act, 1996, and such decision shall be binding on the parties and their representatives.

25. The courts at ____________ shall have sole jurisdiction over any matter arising out of the execution of this agreement and the performance of the obligations by either of the parties under this agreement.

26. Two sets of the agreement are prepared, one kept with the FIRST PARTY and the other with the SECOND PARTY, and duly signed by both parties in front of the witnesses.

27. The SECOND PARTY, in any part of the state, will make no sales to Dealers/Wholesalers.

FIRST PARTY: ________________________

SECOND PARTY: ________________________

WITNESSES (First Party):
1. ________________________

WITNESSES (Second Party):
1. ________________________