Forward Purchase Agreement for India

Forward Purchase Agreement Template for India

A Forward Purchase Agreement is a legally binding contract governed by Indian law that establishes the terms and conditions for the future purchase of specified goods or commodities. The document outlines the commitment between a buyer and seller for delivery at a future date, detailing aspects such as quantity, quality specifications, pricing mechanism, delivery terms, and risk allocation. It incorporates provisions compliant with Indian contract law, including the Indian Contract Act 1872 and Sale of Goods Act 1930, while also addressing specific requirements for forward contracts under Indian regulatory framework.

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What is a Forward Purchase Agreement?

The Forward Purchase Agreement is a crucial commercial document used when parties wish to secure future supply of goods or commodities at predetermined terms. This agreement type is particularly valuable in the Indian market where supply chain certainty and price stability are essential for business planning. It provides a comprehensive framework for managing future purchases, incorporating key elements such as delivery schedules, quality parameters, and payment terms. The document ensures compliance with Indian legislation, including the Indian Contract Act 1872, Sale of Goods Act 1930, and relevant forward contract regulations. It's commonly used in industries with long-term supply needs or where market price volatility is a concern, offering both parties certainty about their future obligations and rights.

What sections should be included in a Forward Purchase Agreement?

1. Parties: Identification and details of the seller and purchaser

2. Background: Context of the agreement and relationship between the parties

3. Definitions and Interpretation: Definitions of key terms and interpretation rules

4. Subject Matter of Purchase: Detailed description of goods/commodities to be purchased

5. Purchase Price and Payment Terms: Pricing mechanism, payment schedule, and currency

6. Delivery Terms: Timing, location, and method of delivery

7. Quality Specifications: Required quality standards and specifications of goods

8. Quantity Terms: Agreed quantities and any permitted variations

9. Title and Risk: Transfer of ownership and risk allocation

10. Representations and Warranties: Statements of fact and promises by both parties

11. Force Majeure: Provisions for unforeseen circumstances affecting performance

12. Default and Termination: Events of default and termination rights

13. Dispute Resolution: Process for resolving disputes between parties

14. Governing Law and Jurisdiction: Applicable law and courts having jurisdiction

15. General Provisions: Standard boilerplate clauses including notices, amendments, etc.

What sections are optional to include in a Forward Purchase Agreement?

1. International Shipping Terms: Required when goods are shipped internationally, including Incoterms

2. Quality Certification: When specific quality certifications or third-party testing is required

3. Storage Provisions: When temporary storage of goods is needed before final delivery

4. Insurance Requirements: Detailed insurance obligations beyond standard coverage

5. Price Adjustment Mechanism: For long-term agreements where price adjustments may be needed

6. Minimum Purchase Commitment: When buyer commits to minimum purchase quantities

7. Exclusivity Provisions: When parties agree to exclusive dealing arrangements

8. Regulatory Compliance: When specific regulatory requirements apply to the goods

9. Intellectual Property Rights: When IP rights are involved in the transaction

10. Environmental Compliance: When environmental regulations affect the transaction

What schedules should be included in a Forward Purchase Agreement?

1. Schedule 1 - Product Specifications: Detailed technical specifications of the goods

2. Schedule 2 - Pricing Schedule: Detailed pricing information and calculation methods

3. Schedule 3 - Delivery Schedule: Detailed timeline of deliveries and quantities

4. Schedule 4 - Quality Standards: Detailed quality parameters and testing methods

5. Schedule 5 - Form of Purchase Order: Template for individual purchase orders

6. Schedule 6 - Storage Requirements: Technical requirements for storage if applicable

7. Appendix A - Contact Details: Key contacts for both parties

8. Appendix B - Required Certificates: List of required certificates and compliance documents

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

India

Publisher

Genie AI

Document Type

Agreement Contract

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Manufacturing

Agriculture

Mining

Commodities Trading

Textiles

Automotive

Electronics

Chemical

Pharmaceuticals

Energy

Metal Processing

Food Processing

Construction Materials

Relevant Teams

Procurement

Legal

Finance

Operations

Supply Chain

Risk Management

Quality Assurance

Commercial

Trading

Logistics

Business Development

Relevant Roles

Procurement Manager

Supply Chain Director

Commercial Director

Contract Manager

Legal Counsel

Chief Financial Officer

Operations Manager

Trading Manager

Risk Manager

Quality Assurance Manager

Logistics Manager

Business Development Manager

Category Manager

Sourcing Specialist

Finance Director

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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