Background: Painted Images (PI) Jo, Maddy, and Taylor are friends, business acqu
ID: 418598 • Letter: B
Question
Background: Painted Images (PI) Jo, Maddy, and Taylor are friends, business acquaintances, and residents of Maryland. Jo has been the project manager for twelve years for a construction company owned by a general contractor and developer. Maddy and Taylor have owned and operated a small, successful home rehab and “flipping” business for ten years. After considering several business ventures, the group decided that a residential painting business would be a good fit for their professional experiences, skills and interests and agreed to pursue the possibility of launching a Maryland-based painting business named Painted Images. The three hired a market analyst to research market trends and demands for the painting services industry and confirm whether Painted Images would likely be a viable business in their community. The market analysis showed there is an increased demand for homes services businesses in the region. Consequently, the group decided to move forward with their idea to establish PI. The group is committed to operating and marketing PI as a green business. Most paint contains high VOC (volatile organic compounds) that pollute the air, particularly indoor air. According to the Environmental Protection Agency, VOCs are considered one of the top five hazards to human health, arising primarily from interior paints and finishes. New environmental regulations and manufacturing techniques have led to the development of low-VOC and zero-VOC paints that are durable, cost-effective and less harmful to human and environmental health. Jo, Maddy, and Taylor plan to purchase all paint and other supplies from Naturals, Inc. (Naturals), a mid-sized manufacturer of zero-VOC paint and chemical free paint supplies. The potential owners of PI are familiar with Naturals as each has purchased from Nautrals for their respective current businesses. PI plans to resell certain Naturals products to PI clients directly for painting jobs, and via internet sales. PI will be headquartered in a business space in a local shopping center. The PI headquarters will include private business offices, a reception area, and conference meeting and planning space to which potential and existing customers will be invited to discuss proposals for painting jobs, paint products, and to complete contracts for painting jobs. The business space will be open to the public to collect information and inquire about PI services, examine paint displays, and view photos and exhibits from ongoing and past painting jobs. The potential PI owners recently attended a start up business seminar sponsored by the local chapter of the Small Business Administration. Following the seminar, the owners held several meetings to define the nature and scope of the work to be done to prepare a clear plan for the start-up business. They realized this process requires time, thoughtful analysis, and clear guidelines as the owners have somewhat different priorities, interests and expectations. They also recognized that they need for professional business consultants, such as BCA, to guide their start-up for PI. Consequently, the three have hired BCA to advise and guide them through the start-up process for PI.
Background: The PI owners are aware of the importance of contracts used in business to both buy and sell goods and services. They are reviewing the Uniform Commercial Code (UCC), Article 2, that covers contracts for sales of goods. In sales contracts, it is important to consider allocation of risk between a buyer and a seller to define value, and typically each party will want to shift as much risk as possible to the other party. The PI owners understand that they would want different terms in their purchase contracts and sales contracts. First, they want to focus on their sales contracts for selling paint and other supplies, and have asked BCA to prepare a memorandum that recommends desired contract positions on a variety of terms for PI’s contracts for sale of goods. Instructions: You are tasked with preparing a memorandum to Pat, Gale and the PI owners to make recommendations for sales contracts.
The terms below are just a few of the terms that you, Pat and Gale determined should be included in a sale of goods contract for PI. For each of these terms, recommend and explain details and policies for each of these terms in a contract for a PI sale of goods to a buyer. For each of these terms, also include the UCC, Article 2, section that applies to the term.
1. Payment terms
2. Transfer of title and risk of loss or damage to goods PI is delivering to buyers
3. Inspection of delivered goods: how long a buyer has to inspect goods after delivery
4. Rights and obligations of seller and buyer if delivered goods conform to the order
5. Rights and obligations of seller and buyer if delivered goods do not conform to the order
Explanation / Answer
Answer:
The detailed draft copy is as below,
AN AGREEMENT BETWEEN PURCHASER AND SUPPLIER
This Deed of Agreement is made and entered into on ____________ day of ___________ 2018
BETWEEN
Organisation PI, an international non-government organisation having its Country Office at ________________________________________, represented by its Purchase Committee (here in after called THE PURCHASER which term shall include its successors and assigns) on the one Part.
AND
PAINTED IMAGES (PI) having its office at __________
_____________________ (here in after called THE SUPPLIER which term shall include successors and assigns ) on the other Part.
Whereas Organisation XY,_______________________________ has a Project to houses to __________________________________at ________________ district of ____________
And whereas THE PURCHASER is willing to purchase ________________for the purposes mentioned above.
And whereas for this purpose THE PURCHASER desires to appoint a Supplier to supply _____.
And whereas THE SUPPLIER expresses their desire to enter into an agreement with THE PURCHASER for the job fully described in Schedule-A.
NOW THIS DEED OF AGREEMENT WITNESS THE TERMS AND CONDITIONS AS FOLLOWS :
1.That the Agreement shall come into force immediately and shall remain valid until the final completion of the job or cancelled by THE PURCHASER.
2.That the materials more specifically described in Schedule-A shall be supplied by THE SUPPLIER at____________________________________________________________
3. That THE PURCHASER reserves the right to change their specified delivery site for any reasonable ground or grounds and the THE SUPPLIER shall be responsible to deliver the materials at the new site. The transportation cost for delivery at the new site will be decided by both the parties.
4.That the quality and quantity of the materials shall be as per specification given by THE PURCHASER as well as samples submitted by THE SUPPLIER and approved by THE PURCHASER.
5.That the delivery of the materials shall be made by THE SUPPLIER at their own cost, management and responsibility as per Schedule-B.
6.That THE SUPPLIER shall be fully responsible for delivery of the materials in good condition at the specified site of THE PURCHASER through delivery dockets in triplicate.
7.That THE PURCHASER's representative(s) shall inspect the goods at__________________ and reserves the right to reject any goods if the representative(s) considers those to be inferior quality to the approved samples.
8.That the goods rejected by the representative(s) of THE PURCHASER shall be replaced by THE SUPPLIER and THE SUPPLIER shall bear all risks/costs of the materials rejected by THE PURCHASER.
9.That the transportation of the goods shall be made by THE SUPPLIER on the same day as the quality control check by the representative(s) of THE PURCHASER. Representative (s) of THE PURCHASER will accompany the goods from the quality control check to the site of delivery. Any goods which are not accompany by the representative(s) of THE PURCHASER will not be accepted.
10.That the cost of supply of materials will be (enter amount and currency) described specifically in Schedule - A and payable by THE PURCHASER to THE SUPPLIER.
11.That THE PURCHASER reserves the right to change the quantity of items if they feel necessary during the validity of this Agreement.
12.That THE SUPPLIER shall not without the consent in writing of THE PURCHASER assign or sub-let the contract or any part thereof, or make any agreement with any person/company for the execution of any portion of the supply. In this regard consent by THE PURCHASER will not relieve THE SUPPLIER from full and entire responsibility for this Agreement.
13.That THE SUPPLIER shall indemnify THE PURCHASER in respect of all claims, damages, compensation or expenses payable in consequence of any injury or accident caused by them ie. THE SUPPLIER.
14.That the custom duty, VAT or other Taxes and cost of transportation, or any other incidental charges, if required in connection of the delivery of goods shall be borne by THE SUPPLIER.
15.That the Payment shall be made by THE PURCHASER from _____________office in Currency (______) through A/C payee Cheque only on production of invoice along with delivery dockets confirming receipt of goods by THE PURCHASER's Representative(s) at site.
16.That THE PURCHASER may allow Part Payment for running bill on the request in writing of THE SUPPLIER.
17.That if THE SUPPLIER shall in any manner neglect or fail to carry on the work or performance of the terms of the Agreement with due diligence or violates any of the terms of this Agreement THE PURCHASER shall be entitled to cancel The Agreement and demand damages.
18.That if THE SUPPLIER fails to deliver the materials as per agreed Schedule, penalty will be imposed by THE PURCHASER at the rate of (1%) of total contract value for each day of delay.
19.That the terms of this Agreement shall be governed by the Laws of the Land i.e. _____________________
20.That if any dispute arises in connection with or under this Agreement between the Parties hereto, the matter shall be referred to the Country Director or designate and the decision of the Country Director shall be final, conclusive and binding upon both the parties.
SCHEDULE - A
Sl. No
Item
Specification
Quantity
Rate
Total
SCHEDULE - B
Sl. No
Specification of Item
Quantity
Delivery Date
Delivery Site
Signed on the__________day of __________ for and on behalf of the Supplier and Purchaser as follows:
SUPPLIER PURCHASER
1................................................ 1..............................................
2............................................… 2..............................................
3……………………………… 3……………………………..
WITNESSES WITNESSES
1................................................ 1..........................................
2............................................... 2............................................
(Please initial each page).
Sl. No
Item
Specification
Quantity
Rate
Total
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