LEGAL WRITING ID

Assignment: Group Work

Atty. E. Mascenon
Due date: Final Exam submission
CONTRACT DRAFTING

1. Read ‘ Body of the Contract ‘ in the Contract Drafting Book I left.

2. Read the following facts and follow the instructions in point 17.

EverBeauty Health Products Inc., is a newly incorporated Phil. company located in 145
Quezon Avenue, Quezon City. It is engaged in the business of importing beauty and health
products from Korea, has negotiated a distribution agreement with Mabuhay Sales Inc. (MSI)
for the latter to sell the Ever Beauty’s products under the following terms:
1. Territory and Channel : MSI shall sell only in the island of Luzon and only to the
following channel or type of stores: stand alone Health and Beauty Stores, Drug Stores
and Convenient stores. MSI shall not sell to the following department stores : SM,
Robinson, LandMark, PureGold , supermarkets and grocery stores. Term of contract is
every 2 years with automatic renewal unless terminated.
2. The products covered are 5 stock keeping units (sku) described below with the prices by
which EverBeauty shall sell to MSI plus 12% VAT. The prices are good up to the end of
2018, after which EverBeauty may increase its prices to MSI provided it is given 30 days
notice.

Product Size Price per case Price per

(Php) piece
1) GoldCream Skin Cleanser 250 ml x 8,640 360
24units
2) GoldCream Skin Cleanser 150 ml x 36 9,020 250
3) GoldCream Moisturizing 237 ml x 36 16,200 450
Lotion
4) GoldCream Moisturizing 453g x 24 20,160 840
Lotion
5) GoldCream Sun Block Lotion 207ml x 36 19,800 550
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3. MSI shall sell the above products within its Territory and Channel at a price decided by
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MSI provided its profit margin per case or per unit will not exceed 30%.
4. MSI shall send its ordered quantity to EverBeauty via email every 15 th of the month and
is obligated to pay EverBeauty 3 days after sending its order. Payment is to be made to
EverBeauty’s BPI account. Everbeauty shall give its account details after the signing of
the contract.
5. EverBeauty shall deliver to MSI its ordered quantity within 5 days from the payment
deposit. Delivery shall be done at MSI’s main warehouse located beside its main office.
6. MSI shall store the products in a clean, cool place dedicated only to EverBeauty
products. EverBeauty shall not accept any returns from MSI for any reason like
damages, or expired products.
7. Within 30 days from the signing of this agreement, MSI shall submit to EverBeauty a
business plan detailing on the sales target agreed with EverBeauty for the balance of the
year. Thereafter, MSI shall submit every October, the business plan for the following
year.
8. In case, MSI fails to deliver its agreed sales target, EverBeauty shall have the option of
terminating its contract.
9. Any dispute shall be resolved in the Courts of Quezon City.
10. MSI is barred from appointing any subdistributor. It is free to determine its credit policy
with its customers. It is prohibited from carrying any competing product with those of
EverBeauty.
11. EverBeauty can divide the Territory or Channel assigned to MSI for whatever reason
provided MSI is given 30 days notice.
12. EverBeauty commits to provide marketing support for the products equal to 10% of the
total purchases of MSI from EverBeauty per calendar year which will be in the form of
brochures, posters, and streamers.
13. MSI has been in the business of distribution for 20 years. Its founder and President is
Arturo Macapagal and its head office is located in 35 J.P Rizal Street, Cabuyao, Laguna.
14. EverBeauty is led by its CEO Marlyn Lim.
15. EverBeauty warrants that its products are registered with the Food and Drug
Administration and that the products are imported legally paying the right taxes and
custom duties.
16. MSI warrants that it has all the business permits to distribute goods in Luzon and Metro
Manila.
17. Draft a contract between these two companies. Try to stay close as much as possible
to the structure: 1) Title 2) Introductory Paragraph 3) Recitals 4) Definitions ( if
needed) 5) Operative Clauses 2) Representations/Warranties 3) Remedies 4) Signature
5) Attachment ( if needed)
( Use Legal Bond Paper, Times Roman , size 12)
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