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The Bottler or Distributor Agreement, which legally binds the distributor to the company, has
some important clauses that help in making the contract clear, accurate, and binding between the parties
to the agreement.
The start of the agreement introduces us to the name of the agreement, the parties along with their
official addresses, and the execution date of the agreement. The execution date of the agreement is the
date from when the agreement shall be binding on the parties. This is followed by providing details of the
applicable laws over the agreement, which help in determining the obligations of the parties and how such
obligations must not be in contravention to the laws of that specific country.
This is followed by some of the important clauses of the agreement:
Recitals clause
The recitals clause always starts with the term ‘WHEREAS’ and provides the background
information of the parties to the agreement, along with their intention and motivation behind entering into
the present agreement. As this clause includes the reasoning behind agreeing, it is beneficial to provide
brief details of the product and jurisdiction/territory in question. These may be expanded upon further in
the upcoming clauses but providing a brief line or two about them in the recitals, helps the reader in going
forward in the contract with a specific mindset of what the agreement is about and what the parties have
obligated upon.
Obligations of the bottler relative to the preparation and packaging of the beverage clause
This clause includes the obligations of the bottler, during the term of the agreement, in relation to
the preparation and packaging of the beverage products of the company. Some obligations of the bottler
under this clause are:
Strict adherence to the packaging requirements, according to the company policy and standards.
Must use identification codes on the packaging.
Prompt notice to the company, if the bottler finds any problem in the quality of the products.
Delivery of samples of products, at the expense of the bottler.
Use of approved packaging only.
Conducting work in accordance with the laws of the territory and informing the company if there is any
contradiction between the company policy and the laws of the territory.
General clause
This clause remains common to both parties and is not limited to the bottler, unlike the previous
clauses. This clause includes the force majeure situation, and other general details in relation to the
jurisdiction, governing laws, the relationship between the parties to the agreement, etc. This clause helps
the parties to limit their liabilities in case anything goes wrong during the term of the agreement, which is
not capable of being stopped by either of the parties.
Finally, the agreement ends with the name and signatures of both the parties to the agreement, i.e. Coca-
Cola Company, and the bottler.
Conclusion
As noted through the above analysis, a major part of the agreement highlights the obligations of
the bottler. This helps us to infer that the company under this agreement is in a higher position than the
bottler, and the bottler must comply with the details and information given by the company throughout
the term of the agreement. This is mainly because the actions of the bottler affect the reputation of the
company directly. Therefore, the company tries to provide more restrictions on the parties, to ensure that
there are no problems that the company faces due to the actions of the bottlers.
It can be concluded that such bottling agreements are an effective way to increase the market
presence of the company and to help the bottler in increasing their sales by using the company’s name.
Therefore, this provides a winning situation for both, given that they comply with the terms of the
Bottler’s Agreement.
Reference
https://blog.ipleaders.in/analyzing-bottlers-agreement-coca-cola/?
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