Using A Broker Contract
Next up in my series of articles explaining contracts is a sample broker contract for you to adapt and use when you are working as a joint venture broker. This is the kind of agreement you would have the party whose business you’re expanding to sign. The idea of it is to ensure you get paid for your work – and also to ensure accountability from the parties to the agreement.
JOINT VENTURE BROKER CONTRACT
This broker agreement (hereinafter known as the ‘Agreement’) is made on this _____ day of _____________ ___ between :
(ABC Ltd) of ___________________________________________________ and
(XYZ Ltd) of ___________________________________________________.
The company hereby appoints the broker as its exclusive broker with respect to the following project :
(Insert details of product/service involved.)
Unless terminated earlier the term of this Agreement shall consist of an initial term for a period beginning on the date below and running for ___ years. A renewal term of ____ years will follow automatically unless notice of non-renewal is given by either party within 90 days.
Either party may, by written notice, terminate this Agreement in the event the other party has materially breached any of the conditions.
Clause 2 : Representation
The broker warrants that it will employ its best efforts to obtain joint ventures relating to the project. The broker makes no warranty or undertaking, however, express or implied, as to the performance by any third party with which the company contracts as a result of this agreement. The broker shall have the right to appoint sub-representatives to carry out certain duties as the broker may specify from time to time, in which event the broker shall be responsible for their remuneration.
The broker shall have overall responsibility for structuring and coordinating the negotiation of contracts on behalf of the company involving the project. The company agrees to cooperate in all such negotiations as the broker may reasonably request.
The broker will submit to the company for approval all proposed contracts regarding the project. Unless otherwise agreed in writing the company is solely responsible for obtaining legal advice on such contracts. The broker will under no circumstances be expected to provide legal advice with respect to the enforceability or effect of any contract.
The company shall have 30 days after receipt of any proposed contract to approve or disapprove the same.
Clause 4 : Requirements
All contracts in regard to the project shall provide for the following:
i. The broker will receive all copies of all notices required or permitted under the terms of the contract, and all correspondence among the parties regarding the project.
ii. The broker will receive copies of all financial reports, marketing reports, statements of account and other reports, if any.
iii. In the event the company defaults in performing the contract the other contracting party shall look solely to the company as to any and all remedies that may be available. And shall in no event assert any claim against the broker in respect thereof or offset any commissions otherwise earned by broker which may be payable under this contract.
iv. If any such contract does not automatically provide for payment of commissions directly to broker then it shall provide that the other contracting party, on written notice from the broker, will pay applicable commissions directly to broker.
Clause 5 : Representations, Warranties And Indemnities
The company represents and warrants that:
i. The company has the power and authority to enter into and perform this Agreement, and doing so will not conflict with any other agreement or understanding to which it is a party.
ii. The company shall have all rights in the project provided by the company which are necessary for the performance of this Agreement, the performance of all contracts entered into pursuant to this Agreement, and the payment to broker of all commissions due.
iii. The company will not knowingly misrepresent any material fact regarding the company or the project to the broker or to any other person or company.
iv. The company will duly and fully perform as required by law all contracts entered into pursuant to this Agreement.
v. The project does in no way infringe, violate or breaches any copyright, trademark, patent, trade secret or other proprietary right of any third party, nor is defamatory, unlawful or injurious in any way.
vi. The company has and will continue to have the financial ability to discharge its obligations under this Agreement.
vii. The company will pay when due any and all sales, income and taxes applicable to this project.
The broker represents and warrants that:
i. The broker has the authority to enter into and perform this Agreement, and doing so will not conflict with any other agreement or understanding to which it is a party.
ii. The broker will not knowingly misrepresent any material fact regarding the broker or the project to the company or to any other person or company.
Clause 6 : Commission And Expenses
The broker shall earn commissions at the rate of __% on all income received by the company, or payments made by the company, with regard to the project. Commissions shall accrue with respect to any and all such income received, or payments made, by the company and advances against such income.
Commissions shall be deemed earned as and when the company receives, makes or transfers any commissionable payment. Commissions shall be based on commissionable items prior to deduction for any sales or taxes. Liability for any taxes shall be accepted by the company.
Payment of commissions shall be made either by the company or by the third party making the commissionable payment to the company and shall be accompanied in each case by accounts itemising the commissionable items. All payments shall be made within seven business days after appropriate clearance of funds, and shall be accompanied by a written statement of all commissionable items for the relevant period.
The company agrees to bear all reasonable out of pocket expenses up to £500 incurred by the broker in the course of its performance of services on behalf of the company. The company shall be responsible for such expenses whether or not the broker is successful in obtaining contracts or commitments for the company, and whether or not the company accepts any agreement presented.
Each party will exchange within 90 days after the conclusion of a project final accounts and reconciliation of expenses and commissions owed, which accounting shall be final unless contested within one year after receipt.
Each party shall have the right, no more than once in any financial year and with a minimum of five days notice, to instruct an independent accounting firm to examine the books, records and accounts of the other party for the purposes of verifying amounts paid under this Agreement. All information received in any such examination shall be held in confidence. The expenses of such an audit shall be borne by the auditing party.
Clause 8 : Confidentiality
Each party agrees to treat as confidential the terms of this Agreement and all information of a confidential nature provided by the other party in connection with this Agreement. This includes the identity of contracting parties and prospects and their personnel, contents of contracts and prospective contracts hereunder and the status of pending negotiations, financial information regarding the respective parties, product development plans and proposals, and any other information designated in writing by the disclosing party as confidential.
Clause 9 : Miscellaneous Provisions
Assignment. This Agreement shall be binding upon the parties detailed above and their respective successors but neither party may assign or delegate their rights or obligations hereunder to any third party without the prior written consent of the other party.
Jurisdiction. This Agreement shall be governed by English Law unless otherwise stated.
Severability. Should any provision of this Agreement be found to be void or unenforceable, such provision shall be treated as if it was not contained in this Agreement and the remaining provisions will continue in full force and effect. Should any provision be found to be excessively broad in scope or duration, such provision shall be limited in scope or duration (as the case may be) so as to be enforceable to the maximum extent permissible under the applicable law.
Entire Agreement. This Agreement constitutes the entire agreement between the parties relating to the project and supersedes all prior agreements, negotiations and understandings, oral or written.
Signed for (ABC Ltd):
Signed for (XYZ Ltd):
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