Framework Sales Agreement

Sample Agreement under Swiss Law
Do not use without obtaining professional advice!
Dr. Paul Peyrot, Peyrot & Schlegel Law Office
Beethovenstrasse 47, 8002 Zurich, Switzerland
paul.peyrot@peyrot-schlegel.ch
Framework Sales Agreement
dated
[FinalDate]
between
•,
residing at:
hereinafter: "Buyer"
and
•
Of
hereinafter: "Supplier"
all together hereinafter: “Parties”

Agreement dated [FinalDate] Draft • • Peyrot & Schlegel 2/9
Introduction
This agreement shall form the basis for the contractual relationship between
the buyer and the supplier.
The basic agreement shall refer to the delivery of one or more products as
specified in more detail in Appendix 1.
Appendix 1 to this basic agreement shall not only contain details of the delivery
item, but also information about quantities supplied, delivery schedule
and guaranteed delivery dates.
1 Subject of the agreement
1.1 The delivery item / the delivery items (if need be, broken down into product
groups) shall be defined in Appendix 1.
1.2 The quantities to be supplied and prices shall be stipulated in Appendix 1.
1.3 Wherever required by the purpose of the delivery item (delivery items), the
buyer shall provide the supplier with the most precise information as possible
about the required delivery item (delivery items) and its (their) application.
1.4 Product specifications in respect of parameters, grade and / or handling,
storage and transport regulations shall be stipulated in the Appendix 1 under
part numbers or product families.
1.5 Any additional conditions in relation to individual call orders shall be complied
with.
1.6 With the acceptance of the order, the supplier shall guarantee the features
required on the basis of the specifications. In particular, the supplier shall
guarantee correct and professional delivery.
2 Contractual period
2.1 The agreement shall end automatically on … without any notice of cancellation.
2.2 The parties to the agreement shall, following its expiry, replace this basic
agreement with a new agreement or prolong it by means of a new Appendix
1. The agreement negotiations shall, where possible, take place during the
penultimate quarter of the contractual period prior to the originally agreed
date of expiry.
2.3 If a new Appendix 1 is mutually signed which is valid for the ensuing contractual
period, then the validity of this agreement shall be automatically extended
for the period stipulated in the new Appendix.

Agreement dated [FinalDate] Draft • • Peyrot & Schlegel 3/9
2.4 The period of validity of Appendix 1 shall be given in the appendix itself.
2.5 Individual call orders shall be complied with in accordance with the Appendix
valid on the date of the delivery.
3 Conditions of the agreement
3.1 Supply agreement
Each call order (or delivery on demand) shall represent a separate supply
agreement, the conditions of which shall not vary from those of the basic
agreement nor from the QAA. In particular references to conditions of purchase
and sale shall be mutually excluded.
3.2 Delivery schedule
The quantities to be supplied defined in Appendix 1, shall correspond with
the requirements for the period stipulated in Appendix 1. However, they shall
not represent clearance for production.
Exceptions : - Compulsory stock (clause 3.4)
- Adequate procurement of raw material
Part orders (delivery on demand) shall be supplied continuously according to
the current delivery dates. Upon expiry of the delivery date the goods shall
be available at the buyer.
Within the framework of its rolling delivery schedule, the buyer reserves the
right to request postponement of a delivery up to ..... weeks before the original
delivery date.
The bringing forward of delivery dates shall be covered by compulsory stock.
3.3 Delivery dates
The supplier shall inform the buyer in writing of the current delivery dates for
each delivery item / product group in good time, in any case prior to the renewal
of Appendix 1. The buyer shall be informed immediately of any changes
to delivery dates. Nevertheless, the terms of delivery given in Appendix 1
shall not be exceeded.
Even in the event of shortages of material, the supplier shall, by means of
suitable precautions, guarantee that delivery dates are met.
3.4 Compulsory stock

Agreement dated [FinalDate] Draft • • Peyrot & Schlegel 4/9
The supplier shall guarantee to maintain the compulsory stock listed in Appendix
1 throughout the contractual period. The supplier shall grant the buyer
the right to inspect this stock at any time.
3.5 Indemnity for late delivery and postponement of acceptance of a delivery
A. If a delivery is delayed and the delay can be attributed to the supplier, the
buyer shall be entitled to claim indemnity without proof of damage. For each
full week’s delay the said indemnity shall be 1%, however altogether not exceeding
10% of the value of that part of the delivery which due to the delay
cannot be used on time or not used in accordance with the agreement.
If the buyer can show proof of damage and the supplier cannot show that
the buyer has either shown negligence or bears liability, the buyer shall
claim additional damages.
B. Confirmed delivery dates shall be binding and the supplier shall be automatically
in default if these dates are not complied with. In the event of a
delay in delivery of more than 10 weeks, clause 7.1 of this agreement shall
apply.
C. If the buyer requests that a delivery be postponed, buyer shall be invoiced
for the cost of storing the goods concerned for each full month the
goods are stored beginning one month after the supplier has announced that
the goods are ready for delivery. Such storage charges shall not, however,
exceed 1% per month of the invoice value of the goods concerned.
D. Compliance with the delivery dates presupposes that the buyer has met
its contractual obligations.
3.6 Basis of quotation
3.6.1 Pricing
The prices / unit prices listed in Appendix 1 shall be understood as follows:
DDP Volketswil (Incoterms 2010).
3.6.2 Price validity
The prices / unit prices listed in Appendix 1 shall be fixed and remain valid
for the duration of the agreement.
However, should raw material prices for .......... change by more than +/-
..... %, the unit prices shall be readjusted with the buyer each quarter. The
new prices shall be determined at least ..... days before the beginning of the
quarter. Basis: This Skeleton Agreement shall be based on a price of SFr.
.......... per .......... .

Agreement dated [FinalDate] Draft • • Peyrot & Schlegel 5/9
3.7 Conditions of payment
The buyer shall pay the supplier’s invoices within 30 days less 2% discount
or 60 days net.
4 Packing and despatch
4.1 Packing
The products shall be properly packed in accordance with the relevant specifications.
4.2 Despatch
4.2.1 Shipping documents
Each delivery shall be accompanied by a complete set of correctly prepared
documents. Shipping documents and invoices shall bear the buyer order
numbers and descriptions.
The supplier shall bear the risk for any consequences resulting from erroneous
or incomplete documents.
4.2.2 Multiple delivery addresses
The buyer shall require separate despatch advice notes or delivery notes for
shipments to multiple delivery addresses.
4.2.3 Passage of risk
The transport of goods to their place of destination shall be at the supplier’s
risk, including the risk of accidental loss. Buyer shall only meet transport insurance
costs if they are expressly agreed upon in clause 3.6.1.
5 Certificates of quality
5.1 Where required, buyer shall request test or quality certificates for deliveries,
at the latest in the order text.
6 Guarantee
6.1 The buyer shall endeavour to check the goods delivered as soon as possible
after receipt and immediately inform the supplier of any shortages or obvious
defects. Notification of obvious defects shall, however, also be regarded
as having been made in good time even if defects only become apparent
during the processing or utilization of the delivery and the buyer gives immediate
notification of the defects.

Agreement dated [FinalDate] Draft • • Peyrot & Schlegel 6/9
The period of guarantee for latent defects shall run from the moment the
goods are first processed or utilized, at the latest 18 months after their delivery.
The period of guarantee shall be 12 months.
The period of guarantee and the time limit for notifying defects for replacement
deliveries shall start afresh.
6.2 Without prejudice to further claims, the buyer shall, in the event of defects,
reserve the right even in the case of part deliveries, either to cancel the order
in question, request a corresponding credit note or a replacement delivery
or give the supplier the opportunity to remedy the defects as quickly as
possible. In urgent cases or in the event of a late delivery, the buyer shall,
without prejudice to further claims, have the right to remedy the defects discovered
at the supplier’s expense itself, or to have this done by a third party.
These conditions shall also apply to replacement deliveries.
6.3 The buyer shall reserve the right to postpone payment of the invoiced
amount until any defects have been remedied. The payment of invoices shall
not be interpreted as an expression by the buyer of approval of a delivery.
7 Non-performance of the agreed scope of deliveries
7.1 Supplier’s responsibility
If the supplier cannot deliver the agreed quantity on the dates agreed, the
buyer shall be entitled, at the same prices:
a) To redefine the part delivery quantities and delivery dates, and/or to redefine
the obligation to take delivery and/or
b) To cancel the order concerned without any claims on the part of the supplier.
Irrespective of the above-mentioned provisions, buyer expressly reserves
the right to claim compensation from the supplier.
The buyer shall require separate despatch advice notes or delivery notes for
shipments to multiple delivery addresses.
7.2 Buyer’s responsibility
7.2.1 If, as a result of market collapse or exceptional fluctuation in demand, force
majeure, technical obsolescence etc., the buyer should not be in a position
to accept the quantities to be delivered during the agreed delivery period
plus an extension of 3 months as stipulated in Appendix 1, the buyer and the
supplier shall together initially try to redefine the obligation to take delivery.
If agreement cannot be reached, the agreement can be cancelled in accordance
with the conditions below:

Agreement dated [FinalDate] Draft • • Peyrot & Schlegel 7/9
a. The buyer shall, insofar as any compulsory stock as defined under clause
3.4 has been ordered or manufactured specifically for the buyer and which
does not figure in the supplier’s general sales range, accept delivery of such
stock.
Insofar as the products have not been manufactured specifically for the buyer,
the supplier shall undertake to sell them elsewhere.
b. The buyer shall undertake, wheresoever possible, to offset any remaining
outstanding deliveries (in terms of value) by suitable business.
8 Deliveries required in excess of order
8.1 If the buyer should, within the duration of this agreement, require quantities
in excess of those stipulated in Appendix 1, the supplier shall grant the buyer:
a) the same prices and conditions as in Appendix 1 and
b) a bonus of … % on the additional business which shall be calculated separately
upon expiry of the delivery period concerned.
9 Secrecy in respect of documents
9.1 The supplier should undertake to treat in the strictest confidence both this
agreement and any information that may come into its possession during the
performance thereof relating to the buyer, its manufacturing processes,
products and other details which are not general public knowledge.
9.2 Technical documents such as drawings, technical specifications, descriptions,
diagrams, etc. made available to the supplier, shall remain the property of
the buyer. Such documents may not, without the agreement of the buyer, be
either copied or duplicated. They may only be used for the purpose stipulated
in the order. These documents may in no form be made available to third
parties without the written permission of the buyer. The supplier shall bear
full liability for any damage resulting from non-compliance with these conditions.
Joint development may not be used for third parties without the
agreement of both contracting partners.
10 Tools
10.1 All buyer-specific tools which are the legal property of the buyer and which
are being used at the supplier’s premises shall remain the legal property of
the buyer. The buyer reserves the right to avail itself of them at any time.

Agreement dated [FinalDate] Draft • • Peyrot & Schlegel 8/9
10.2 The tools shall remain with the supplier which shall undertake to exercise the
necessary care in ensuring their proper storage and maintenance so that
they can, at any time, be used at short notice. Moreover, the supplier shall
ensure optimum safety (e.g. fire protection). Any insurance coverage relating
thereto shall likewise be the responsibility of the supplier.
11 Binding contractual documents
11.1 The following documents shall form an integral part of this basic agreement:
1. Appendix 1
2. Call / individual orders
3. Quality assurance agreement (version valid when order is called).
12 Exclusion of conditions of purchase and sale
12.1 This basic agreement excludes mutually the conditions of purchase and sale
of the two contracting parties as regards deliveries and services.
12.2 The buyer shall only recognize order acknowledgements which are sent with
its orders and which must be filled out, legally signed and returned by the
supplier. The supplier’s own order acknowledgements shall not be accepted.
13 Place of performance and jurisdiction
13.1 The place of performance and jurisdiction for deliveries, payment and all
other reciprocal obligations shall be ….
13.2 Swiss law shall apply. The standard Haager purchasing regulations as well as
the standard UN purchasing laws (CISG) shall be excluded.
14 Amendments / Supplements
Any amendments or supplements to this basic agreement, including the
binding contractual documents stipulated in clause 11 shall be set down in
writing and approved by both parties.
This agreement has been drawn up in … (duplicate or triplicate or quadruplicate)

Agreement dated [FinalDate] Draft • • Peyrot & Schlegel 9/9
Signatures
Place / Date
_______________________
Place / Date
_______________________
Buyer
Supplier
_______________________
_______________________
_______________________
_______________________