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Contrat Distribution Franchise

Template of surety agreement for a distributor

Modèle de contrat de cautionnement en anglais.

Note – This template of contract is intended to be used in the context of a distribution agreement, if the distributor is requested to provide a guarantee. While designing this template, we assumed that the contract would be entered into by three professionals, in principle companies: a supplier (the obligee), a distributor (the obligor) and a parent company of the distributor (the surety). This template is not intended for a bank, either as obligee or surety.

Surety Agreement

ENTERED INTO BY AND BETWEEN:

ON THE FIRST PART,

_____ [identity of the physical or legal person],

hereafter referred to as the “Obligee”,

AND ON THE SECOND PART,

_____ [identity of the physical or legal person],

hereafter referred to as the “Obligor”,

and

_____ [identity of the physical or legal person],

hereafter referred to as the “Surety”.

The Obligee, the Obligor and the Surety may be individually referred to as a “Party” or collectively as the “Parties”.

WHEREAS:

The Obligee and the Obligor intend to enter into a franchising agreement, respectively as franchisor and franchisee (the “Franchising Agreement”), immediately after the execution of this surety agreement.

The Surety agrees to stand surety for the Obligor and therefore be legally responsible towards the Obligee if the Obligor fails to comply with any provision of the Franchising Agreement.

Thus, the Parties decided to enter into this surety agreement, which, including its recitals and its appendices that incorporate into it and are indivisible, is hereafter referred to as the “Agreement”.

NOW THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:

1. Information of the Surety

The Surety declares that he is perfectly informed of the obligations of the Obligor under the Franchising Agreement. He received a copy of the Franchising Agreement and analysed it. He obtained appropriate information and documents. He was provided with anything he deemed relevant to evaluate his own commitment under this Agreement.

The Surety is prepared to pay directly to the Obligee any amount the Obligor may owe under the Franchising Agreement, including penalties and interests. He studied carefully the situation and ensured that he can afford to pay if he has to, and that he wants to accept this responsibility.

2. Guarantee

The Surety agrees to stand surety for the Obligor and therefore be legally responsible towards the Obligee if the Obligor fails to comply with any provision of the Franchising Agreement, for any reason whatsoever.

The Surety and the Obligor shall be jointly and severally liable towards the Obligee.

The Surety shall pay directly to the Obligee, immediately upon request, any amount that the Obligor may owe under the Franchising Agreement (including in relation with its termination) it being specified that:

– the Surety shall not be entitled to discuss the amount due, which is unlimited,

– the Surety shall pay the entire amount due to the Obligee, who may not bring an action against the Obligor or any other surety if any,

– the Surety shall not benefit from any time extension that may be granted to the Obligor,

– the Surety shall pay any amount due to the Obligee, even if the Obligor is legally prohibited from paying, has gone into receivership or is liquidated.

The Obligee may recover payment on the Surety’s assets, properties, real estates, movables, cash, existing as at the date of this Agreement or afterwards.

The Surety will remain committed towards the Obligee notwithstanding any change in the ties or the relationship that may exist between the Surety and the Obligor.

The situation of the Obligor or the existence of any other surety did not determine the Surety to enter into this Agreement, which shall remain in force despite any change.

The Surety shall take responsibility for following-up personally the situation of the Obligor.

Any successor or beneficiary of the Surety, anyhow and notably by way of merger, split, contribution, investment or liquidation, shall be jointly and severally liable towards the Obligee. Any successor or beneficiary of the Obligee shall be substituted to him and shall benefit from the Agreement as if he initially entered it into.

3. Duration of the Agreement

The Agreement is entered into for a period equal to the duration of the Franchising Agreement, including any successive renewal, increased by a two-year period after the expiry, including in case of early termination, of the Franchising Agreement [to be confirmed].

The Surety or any successor or beneficiary shall remain jointly and severally liable with the Obligor until the expiry of the Agreement.

4. Rules Governing the Agreement

4.1 Law and Jurisdiction

The Agreement shall be governed by and interpreted in accordance with French law.

In case of any litigation arising in relation with the Agreement, the Parties hereby grant an exclusive jurisdiction to rule the case to French Courts, and specifically the Courts of _____ [city] (France).

4.2 Entirety of the Agreement

The Parties expressly state that the Agreement expresses the entirety of their agreement as regards its subject matter, and invalidates and replaces any previous agreements entered into between them in relation with its subject matter.

4.3 Severability, Adaptation and Amendment

In case any provision whatsoever of the Agreement is deemed void, this provision shall not apply but the other provisions of the Agreement shall remain into force.

The Parties will do their best efforts to negotiate in good faith and in due time any potential modifications of the Agreement that may be necessary, particularly pursuant to mandatory legal or regulatory provisions or the binding decision of a Court.

In any case, notably where mandatory provisions apply, the purpose and the useful effect of the Agreement shall be taken into account as far as possible.

The Agreement may not be amended except by express and written mutual agreement of the Parties, in which case any amendment or waiver of any provision hereof shall be attached to the Agreement and shall incorporate to it.

4.4 Renunciation

The fact that a Party abstains from requesting application of any provision whatsoever of the Agreement, shall not be considered as a renunciation to request said application.

4.5 Official Domicile

For the purpose of this Agreement, the Parties take up residence in their respective domicile or registered office as indicated in the headings hereto. Any modification shall be notified to the other Party by letter with acknowledgement of receipt, in order to be valid.

*****

The Agreement is drafted in English and printed in three original copies, signed on this page and initialled on each other page, one original copy being provided to each Party. No word, figure or sign was crossed, invalidated, modified or added, either handwritten or by any means, between the printing and the signing of the original copies.

The Obligee

On behalf of: _______________ [legal person]

Name of the signatory: _______________ [signatory duly authorized]

Title: _______________ [title or capacity of the signatory]

Date: _______________ [signing date]

Place: _______________ [place where the agreement is signed]

Signature:

The Obligor

On behalf of: _______________ [legal person]

Name of the signatory: _______________ [signatory duly authorized]

Title: _______________ [title or capacity of the signatory]

Date: _______________ [signing date]

Place: _______________ [place where the agreement is signed]

Signature:

The Surety

On behalf of: _______________ [legal person]

Name of the signatory: _______________ [signatory duly authorized]

Title: _______________ [title or capacity of the signatory]

Date: _______________ [signing date]

Place: _______________ [place where the agreement is signed]

We hereby agree to stand surety for the Obligor and therefore be jointly and severally liable towards the Obligee if the Obligor fails to comply with any provision of the Franchising Agreement, under the terms of this Agreement.

Signature:

Par Franck BEAUDOIN, Avocat

Avocat, président et fondateur de la société d’avocats FB JURIS, directeur de la publication des sites juridiques droit.co et idroit.co.

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