Friday, 27 May 2022




Group No: 8



Warehouse agreement is an arrangement in which a partner warehouse agrees to receive, store and ship goods for a client. The contract dictates the terms of service and length of the agreement. The time-frame can vary from months to years and the fee structure can be fixed cost, costs-plus or a combination of the two. Warehouse agreements can provide for various other services including handling, packaging, shipping and inventory management.

Bonded Warehouse

Bonded warehouse is one of the most widely used forms in the bonded system, which refers to the special warehouse for storing bonded goods approved by the customs.

Practical application of bonded warehouse:

Bonded warehouse is usually combined with export supervision warehouse, generally bonded warehouse and export supervision warehouse combined, collectively known as; Two storehouses, namely one out and one in. Bonded warehouse is mainly used in processing trade enterprises, processing trade enterprises in the application of the concept of bonded is very rich, there are five main processing bonded mode, one is generally said; Two outside mode, that is, raw materials and finished products are abroad, processing in China; 2 it is; Two internal mode, namely raw materials and finished products are in the domestic, of course, the processing is also in the domestic, but the source is processing trade companies; Three is bonded domestic sales, four non - export protection, five is commissioned processing. As for bonded warehouse, the scope of limitation is very small, one is mainly used for import, two is not allowed to flow in the warehouse processing, three is limited warehouse capacity, four is involved in the scope is relatively narrow.

The significance of the establishment of bonded warehouses :

Conducive to promoting foreign trade:

In the process of international trade, it takes a long time from inquiry and contract signing to the transportation of goods. In order to shorten the trade cycle and reduce the impact of price fluctuations in the international market, the goods should be transported to the domestic port and stored in the bonded warehouse in advance, so that the goods can be put into use as soon as possible. Also can deposit goods bonded warehouse first, wait for price maturity to enter the market again.

It is beneficial to improve the use efficiency of imported raw materials

The use of bonded warehouses can unify the import of raw materials that need to be imported, coordinate them with each other, improve the utilization rate of raw materials, reduce import prices, and improve economic benefits.

Conducive to the development of a variety of trade methods

Develop export-oriented economy, use bonded warehouse to suspend the payment of tariffs and other preferential conditions, develop a variety of trade methods, such as processing; Conducive to expanding exports and increasing foreign exchange earnings; Still can use the price difference in price change, begin entrepot trade.

It is conducive to strengthening customs supervision

Flexible and varied along with the trade way, the difficulty of the customs tariff collection work in higher and higher, bonded warehouse, customs officers can be coordinated with the power of warehouse management personnel management, the mainly formulate various management systems, the bonded warehouse, implement supervision and administration of cancel after verification, and implements the key spot check for processing and cancel after verification, to prevent the emergence of sale in domestic market behavior. Customs supervision has been strengthened and procedures simplified.

Is conducive to promoting the development of the national economy

Engaged in foreign trade enterprises use bonded warehouse, can give full play to the efficiency of the warehouse, to carry out a series of related businesses, such as customs declaration, loading and unloading, and transportation, allowing processing, sorting, repair, transit,

insurance, product maintenance, etc., make foreign trade, warehousing gradually developed into a comprehensive, multi-functional commodity circulation center, at the same time of promoting the development of the national foreign trade and encourage their economies into the international economic system, promotes the development of national economy.


SECTION 59. Warehousing bond. - (1) The importer of any goods specified in sub-section

  1. of section 61, which have been entered for warehousing and assessed to duty under section 17 or section 18 shall execute a bond binding himself in a sum equal to twice the amount of the duty assessed on such goods-

  1. to observe all the provisions of this Act and the rules and regulations in respect of such goods;

  1. to pay on or before a date specified in a notice of demand, -

  1. all duties, and interest, if any, payable under sub-section (2) of section 61;

  2. rent and charges claimable on account of such goods under this Act, together with interest on the same from the date so specified at such rate not below eighteen per cent. and not exceeding thirty-six per cent. per annum, as is for the time being fixed by the Central Government, by notification in the Official Gazette; and

  1. to discharge all penalties incurred for violation of the provisions of this Act and the rules and regulations in respect of such goods.

  1. For the purposes of sub-section (1), the Assistant Commissioner of Customs or Deputy Commissioner of Customs may permit an importer to enter into a general bond in such amount as the Assistant Commissioner of Customs or Deputy Commissioner of Customs may approve in respect of the warehousing of goods to be imported by him within a specified period.

  1. A bond executed under this section by an importer in respect of any goods shall continue in force notwithstanding the transfer of the goods to any other person or the removal of the goods to another warehouse:

Provided that where the whole of the goods or any part thereof are transferred to another person, the proper officer may accept a fresh bond from the transferee in a sum equal to twice the amount of duty assessed on the goods transferred and thereupon the bond executed by the transferor shall be enforceable only for a sum mentioned therein less the amount for which a fresh bond is accepted from the transferee.

Wholesale trade agreement:

Wholesale trade consists of purchasing and selling goods, generally to retailers, professional (industrial or commercial) users or authorities, or to other wholesalers or intermediaries, regardless of the quantities sold. Wholesale trade intermediaries put buyers and vendors into contact (or perform commercial operations for a third party), without being owners of the goods (these are commission agents, brokers, sales agents, self-employed representatives, etc.). Trading groups, other trade intermediaries, may be the owners of goods, which they sell to their members and their affiliates for a very low trade margin. Almost all goods may give rise to wholesale trade but only some of them are sold in retail (retail trade). Wholesale markets therefore play a crucial role in the vertical coordination of food markets, equilibrating supply with demand and facilitating price formation. Their role reduces per unit marketing costs, promotes stable markets for local produce and encourages increased output and productivity.

Retail trade agreement:

Retail trade is the business activity associated with the sale of goods to the final consumer, the ultimate customer. It is the link between wholesalers or manufacturers and the customers of the product. Typically retailers sell goods in small quantities to consumers for personal use, not for resale or business use. Retail is the final step of the distribution channel. the retailer will buy the goods from the wholesaler, or sometimes directly from the producer, in bulk (large quantities) at a discounted price. And then it sells the goods to the final consumers of the goods, in small units or quantities, at retail price enjoying the benefits in the process. Retail trade can take a lot of forms. It is not necessary that the goods are sold from a store, retail trade can even happen over the phone, via post or mail service, door to door selling etc. So the place of sale can also differ greatly, for example, a store, a supermarket, the customer’s house itself or even a vending machine. But one thing which remains common in all of the above cases is that the buyer of the goods is its final consumer. As far as this is true, it will be a retail trade.

Maintenance Agreement

A maintenance agreement contract is a service agreement that a provider will draft with their customer that will outline the terms for the exchange of services for compensation. There are two forms of service agreements:

Verbal Written

Maintenance agreement should also include provisions for emergency and nonemergency repairs, as well as scheduled maintenance. At some time, every system needs an emergency repair; however, not all repairs are emergencies. The maintenance agreement should define what is an emergency repair (cannot operate system), and what is a nonemergency repair (portion of system not working but its operation is not immediately critical).

The maintenance technician should be required to respond to emergency repairs within a suitable time frame (usually four hours after declaring the emergency), and should bring the system back into operation within a certain amount hours after arriving (typically within eight hours). It is important that either the system owner or maintenance service agency should stock critical spare parts for this purpose. For example, we recommend having a back-up workstation programmed and ready to go just by swapping it out with a bad workstation.

Spares for typical replacement parts should be kept in stock at the client’s facility. This should include one spare card reader, door position switch, lock, request-to-exit device, and camera of each type.

Supply Chain Agreement:

A contract in which a seller commits to deliver all of the specified goods or services that a buyer requires for a set period of time and at a predetermined price, and the buyer agrees to buy those goods or services exclusively from the seller during that period. A supply contract is frequently required in foreign markets to lock in lower pricing and other benefits that the supplier agrees to offer to the client for a set period of time. A supply contract's terms often spell out everything from how the products will be supplied to payment terms and any other facet of the relationship that the two parties deem necessary. Both parties' rights are protected under the supply contract. The client is aware of the things that will be delivered and how they will be supplied. As a result, the provider is aware of what the client is likely to require and how payment will be made. Suppliers often have their own written agreements but, if they don't, you should establish them yourself. Written agreements document all the specific details, such as what you want, what you'll get, how much you'll pay and when.

Supplier agreements cover such issues as:

  • supply conditions, including volume, price, discounts, ordering periods, take or pay and delivery times

  • payment terms

  • specifications of goods or services supplied (scope of goods)

  • warranty periods for defective goods or services

  • limited liability (risk of loss or damage)

  • intellectual property

  • confidentiality

  • insurance

  • dispute resolution

  • termination and exclusion clauses

Outsource Agreement:

Outsourcing is being used by both large and small businesses for the sole reason that technology, specifically the internet, has made it possible. Outsourcing is a major step for small firms, even in the early phases of their growth cycle, to go global. Outsourced functions can be allocated more accurately, allowing for more efficient use of resources needed for productive work. The outsourcing industry is broad, with a wide range of suppliers ready to take on any task; you name it, and it's accessible.

There is no specific law in India that governs outsourcing transactions. The transaction would be subject to different laws depending on the nature of the outsourcing services being procured and the industry in which the e-customer may operate.

An outsourcing agreement is a contract between a company and a service provider in which the service provider offers to supply the services that the company requires. Data processing and information management are examples of such services, which are typically provided using the company's own personnel and equipment at its own premises.

A good outsourcing agreement is one that lays out in detail the roles and responsibilities of both the outsourcer and the service provider. As a result, in the event of a dispute, it reduces the number of complications. However, it is ironic that many people fail to pay attention when establishing an outsourcing agreement. To avoid any misunderstandings later on, the terms of an outsourcing agreement should be thoroughly examined and negotiated before it is finalised. Every outsourcing agreement should be tweaked to fit the needs of the situation. "A single brush should not be used to complete a painting. A well-written Outsourcing Agreement can prevent a slew of issues in the future.

The outsourcing in India is governed by the following laws:

  • Indian Contract Act, 1872;

  • Specific Relief Act, 1963;

  • Foreign Exchange Regulations;

  • Foreign Trade (Development Regulation) Act, 1992;

  • Department of Telecommunications (DoT) policies and guidelines;

  • Information Technology Act, 2000;

  • Companies Act, 2013;

  • Intellectual Property Laws;

  • Labour laws;

  • Transfer of Property Act, 1882;

  • Competition Act, 2000;

  • Income Tax Act, 1961;

  • Indian Evidence Act, 1872;

  • The Code of Civil Procedure 1908.

The Indian judicial system has always supported the use of proper law, which is always upheld by Indian courts if specified in the outsourcing agreement. When any job is outsourced to India, you have the option of choosing which law would govern the contract. It also has the option of choosing which court would have jurisdiction over the issue. The authority and enforcement of foreign decisions in India are governed by Sections 13, 15, and 44 A of the Indian Code of Civil Procedure, as well as Section 41 of the Indian Evidence Act.

Outsourcing is difficult to adopt, and the failure rate of outsourcing relationships remains high. Depending on who you ask, it can range from 40 to 70 percent everywhere. At the heart of the issue is the inherent conflict of interest that exists in any outsourcing relationship. The customer is looking for a better service at a lower cost than they would obtain if they did the task themselves. The merchant, on the other hand, is looking to make a profit. To secure a satisfactory solution for both the consumer and the provider, this tension must be carefully controlled.

Another reason for outsourcing failure is a haste to outsource in the lack of a viable business case. Outsourcing used as a "quick fix" cost-cutting technique rather than as an investment targeted at increasing efficiency, spreading internationally, increasing productivity and competitiveness, or gaining a competitive advantage is more likely to fail.

The key to a successful Outsourcing Agreement is to do your research beforehand, have clear expectations and deliverables with your selected service provider/vendor, and stick to what both parties agreed upon. The relationship should be defined formally, and managed and considered regularly. Trust cannot be bought, it has to be built and should be strong, which is essential to successful outsourcing.


The expression “Sole Selling Agent” has not defined in the Companies Act.

Appointment of sole selling agents to require approval of company in general meeting – Section 294

No company shall, after the commencement of the Companies (Amendment) Act, 1960, appoint a sole selling agent for any area for a term exceeding five years at a time – Section 294(1)

If the company refuses or neglects to furnish any such information, the Central Government may appoint a suitable person to investigate and report on the terms and conditions of appointment of all the selling agents – Section 294(6) (b)

Penalty – Section 294(7)

If a company refuses or neglects:

  1. to furnish the information required by the Central Government under Section 294(5)(a) or 394(6)(a), or

  1. to produce to the person appointed under clause (b) of sub-section (5) or clause (b) of sub-section (6) any books and papers which are in its custody or power or otherwise to give to that person any assistance which it is reasonably able to give, the company and every officer of the company who is in default shall be punishable with fine which may extend to fifty thousand rupees and with a further fine of not less than five hundred rupees for every day after the first during which such refusal or neglect continues

Power of Central Government to prohibit the appointment of sole selling agents in certain cases. – Section 294AA

Where the Central Government is of opinion that the demand for goods of any category, to be specified by that Government, is substantially in excess of the production or supply of such goods and that the services of sole selling agents, will not be necessary to create a market for such goods, the Central Government may, by notification in the Official Gazette, declare that sole selling agents shall not be appointed by a company for the sale of such goods for such period as may be specified in the declaration.

  1. No company shall appoint sole selling agent of that company unless such appointment has been previously approved by the Central Government.

  1. No company having a paid-up share capital of rupees fifty lakhs or more shall appoint a sole selling agent except with the consent of the company accorded by a special resolution and the approval of the Central Government.

  1. Where any appointment has been made of a sole selling agent by a company before the commencement of the Companies (Amendment) Act, 1974 and the appointment is such that it could not have been made except on the authority of a special resolution passed by the company and the approval of the Central Government, if sub-section (2), sub-section (3) and sub-section (8), were in force at the time of such appointment, the company shall obtain such authority and approval within six months from such commencement; and if such authority and approval are not so obtained, the appointment of the sole selling agent shall stand terminated on the expiry of six months from such commencement.

  2. If the company in general meeting disapproves the appointment referred to in sub-section (3), such appointment shall, notwithstanding anything contained in sub-section (6), cease to have effect from the date of the general meeting.

Sole Buying or Purchasing Agents:

The provisions of this section 294AA except those of sub-section (1), shall apply so far as may be to the appointment by a company of a sole agent for the buying or purchasing of goods on behalf of the company.

Prohibition of payment of compensation to sole selling agents for loss of office in certain cases

– Section 294A

a) where the appointment of the sole selling agent ceases to be valid by virtue of sub-section (2A) of section 294;

  1. where the sole selling agent resigns his office in view of the reconstruction of the company or of its amalgamation with any other body corporate and is appointed as the sole selling agent of the reconstructed company or of the body corporate resulting from the amalgamation;

  2. where the sole selling agent resigns his office, otherwise than on the reconstruction of the company or its amalgamation as aforesaid;

  3. where the sole selling agent has been guilty of fraud or breach of trust in relation to, or of gross negligence.

  4. where the sole selling agent has instigated, or has taken part directly or indirectly in bringing about, the termination of the sole selling agency.

The compensation which may be paid by a company to its sole selling agent for loss of office shall not exceed the remuneration which he would have earned if he had been in office for the unexpired residue of his term, or for three years whichever is shorter, calculated on the basis of the average remuneration actually earned by him during a period of three years immediately preceding the date on which his office ceased or was terminated.


Therefore, it help businesses store goods in a central location so that products can get to their destination more efficiently. A centralized warehouse facility reduces both the cost of transporting goods after order processing and the delivery time-frame. Warehouse agreements is a preferred alternative for many organizations because it lowers overall costs and capital investment. Since it can provide access to a multitude of strategic warehouse locations, it’s no wonder that the practice has become a popular solution for businesses.






  3. P LAKSHMAN (20BLB1056)

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