LIABILITY UNDER AGREEMENT

Querist : Anonymous (Querist) 08 December 2009 This query is : Resolved
OUR COMPANY HAD BEEN SUPPLYING GOODS TO VARIOUS CONTRACT BOTTLERS OF A LARGE MANUFACTURER. THESE BOTTLERS/ PRINCIPAL COMPANY COULD NOT MAKE PAYMENT TO US . OUR QUERY IS WHETHER THE PRINCIPAL LARGE MANUFACTURER CAN BE HOLD FULLY RESPONSIBLE FOR MAKING PAYMENTS TO US.

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Arul Kumar (Expert) 08 December 2009
If there is any direct contract between the principal company & your company, then you can make them responsible for making payments. In other word there should be contract of Agency.

Theja (Expert) 08 December 2009
If there is an effective agreement establishing the the 'Principal and Agency' relationship of the Principal Manufacturer and the Contract Bottlers, then 'yes' the Principal Manufacturer can be held liable for the default of the payment whether or not the Principal Manufacturer is an active party to the Contract.

However, if there is no such agreement then please look for the defined parties to the Contract and the 'Payment' provision to ascertian if the Principal Manufacturer is invloved in the Agreement. If the Principal Manufacturer is a party to the Contract or if the Principal Manufacturer is made liable under the Payment Provision in the vent of default by the Contract Bottlrs.

Raj Kumar Makkad (Expert) 08 December 2009
Theja and Arul have rightly opined in the matter.

joyce (Expert) 14 December 2009
Agree with Theja.

Guest (Expert) 18 December 2009
It depends upon the understanding or the agreement. In these transactions, unless you are able to show an express agreement or communication like commitment from the principal large manufacturer, you can not proceed against the large manufacturer.
Thank you.

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