Description

The contract for the supply of goods between the related companies is designed to take into account the regulatory requirements to make transfer pricing adjustments to ensure compliance with the arm’s length principle. Factors such as sales volumes, seasonality, etc. were taken into account in the design of this contract, which allows the buyer to obtain trade discounts. The most important added value that distinguishes this contract from a normal supply contract is the pricing mechanism and the adjustment of these prices at the end of the year or at the beginning of the following year.

Contents of the contract:

  • Preamble
  • Subject matter of the contract
  • Quality, containers, packaging
  • Delivery terms
  • Price, payment terms, discounts
  • Obligations of the parties
  • Procedure for acceptance of the Goods
  • Liability of the parties
  • Force Majeure
  • Dispute resolution
  • Modification and termination of the Contract
  • Other provisions
  • Legal addresses and bank details of the Parties
  • Model Annex to the Agreement

For your information, please find attached the preamble to the Agreement and point 1.1

Contract for the supply of goods
/Place/
xx /Month/ 20xx
Limited liability company “ABC”, registration No ____________, registered office ______________, hereinafter referred to as the “Purchaser”, ______________(Name, Surname), acting on the basis of the Articles of Association, on the one hand,

and
Limited liability company “XYZ”, registration No __________, registered office ______________, hereinafter referred to as “Supplier” _____________(Name, Surname), acting on the basis of the Articles of Association, on the other hand,

hereinafter collectively referred to as “the Parties” and each individually as a “Party”, have entered into the following contract for the supply of goods, hereinafter referred to as “the Contract”, as follows.
Given that the Supplier is a ____________ (type of goods) supplier wishing to supply goods to the Customer and the Customer wishes to purchase them.
Given that the Supplier and the Buyer are related companies, the prices applied for the supply of goods in a transaction between these companies must comply with the arm’s length principle. The market price of the Supplier’s goods is affected by a number of factors, including the volume of purchases of the goods, changes in the prices and costs associated with the purchases of the goods, market developments and other factors. As a result, the prices charged in a transaction may differ from market prices and must be adjusted accordingly at the end of each current year.

1.       SUBJECT MATTER OF THE CONTRACT
1.1.       Under this Agreement, the Supplier undertakes to supply the Customer with _____________ (type of goods) (hereinafter referred to as the “Goods”) and the Customer undertakes to accept and pay for the Goods in accordance with the terms of this Agreement.