Set terms for a contract to supply fuel: Fuel Supply Agreement

Fuel Supply Agreement

This FUEL SUPPLY AGREEMENT (Agreement) is entered into this by and between the , with its principle office at , , (the Supplier) and , with its principle office at , , (the Purchaser).

WITNESSETH

WHEREAS, the Supplier is a competent supplier of (herein after referred to as Fuel), owning, controlling or having the right to offer the Fuel for supply;

WHEREAS, the Purchaser is an end user of the fuel and has a larger than usual demand for individual fuel consumption;

WHEREAS, in its operation, the Purchaser requires a dependable and high quality Fuel source with the experience and capability necessary to supply Purchaser's Fuel requirements;

WHEREAS, Supplier is competent to sell Fuel sufficient to meet the requirements of the Purchaser, and desires to supply Fuel to the Purchaser;

WHEREAS, Purchaser wishes to purchase Fuel from the Supplier and the Supplier wishes to sell Fuel to the Purchaser; and

WHEREAS, the Purchaser and the Supplier shall be collectively referred to as the Parties.

NOW THEREFORE, in consideration of the mutual covenants contained herein, and such other good and valuable consideration the receipt thereof being hereby acknowledged, the Supplier agrees to supply Fuel and the Purchaser agrees to purchase Fuel on the terms and conditions set forth herein.

Purpose

By signing this Agreement, the Purchaser is placing reliance upon Supplier to furnish the needed portion of its Fuel supply at competitive prices to meet its fuel supply needs.

Term

This Agreement shall commence on , and shall continue until , unless terminated sooner in accordance with the terms of this Agreement.

Representations and Warranties of Purchaser

The Purchaser hereby represents and warrants to the Supplier, with the intention to induce the Supplier to enter into this Agreement, that on the date hereof.

The execution and delivery of this Agreement by the Purchaser has been duly authorized by all necessary action and this Agreement constitutes a legal, valid and binding obligation of Purchaser enforceable against Purchaser in accordance with its terms, subject to applicable laws.

Representations and Warranties of Supplier

The Supplier hereby represents and warrants to the Purchaser, with the intention to induce the Purchaser to enter into this Agreement, that on the date hereof:

a. The Supplier is in the business of producing Fuel and is organized as a corporation duly incorporated, validly existing and in good standing under of the laws of the and is fully qualified to do business in such other jurisdictions in which its business and activities require qualification;

b. The execution and delivery of this Agreement has been duly authorized by all necessary corporate action and this Agreement constitutes a legal, valid and binding obligation of the Supplier, enforceable against the Supplier in accordance with its terms;

c. Supplier has received the approval of any public regulatory body having jurisdiction necessary to perform its obligation under this Agreement. The execution and delivery of this Agreement and the requirements hereunder do not require the consent of any third Party nor will they result in a breach or default of any other Agreement to which Supplier is a Party or by which Supplier is bound; and

d. The Fuel to be supplied under this Agreement shall be delivered to Purchaser free and clear from any covenants, restrictions, liens or other encumbrances of any nature whatsoever upon delivery to Purchaser.

Minimum Annual Quantity

The Supplier shall offer to supply (if available) and deliver, and Purchaser shall be financially obligated to purchase a minimum of per year throughout the term of this Agreement ("Annual Minimum Quantity"):

Delivery

The Annual Quantity shall be delivered in accordance with a quarterly delivery schedule, itemized by month, supplied by the Purchaser to the Supplier. The Parties agree that the time requirements contained in the schedule are of the essence of this Agreement, and failure by Supplier to deliver in accordance with the delivery schedule shall constitute a material default of this Contract. Purchaser agrees that Force Majeure or Environmental Force Majeure shall not constitute a material default of this Contract.

Quarterly Delivery Schedule

The Purchaser shall specify by written notice to Supplier the monthly quantities to be delivered in the Contract year. Purchaser reserves the right to revise the quarterly schedule no later than the first day of the month preceding the day of the next succeeding Calendar Quarter.

Source

The Fuel sold hereunder shall be supplied from the designated source or sources which shall be referred to as the Fuel Property. Supplier may provide Fuel from other sources of a quality equal to or better than in the Quality Specifications of this Agreement, and which, in the Purchaser's sole judgment, performs adequately in Purchaser's equipment, with all freight costs and related expenses occasioned by the use of substitute Fuel to be borne by the Supplier. The effective cost to Purchaser of such substitute Fuel shall not be greater than the Delivered Price would have been had the Fuel been supplied from the Fuel Property.

Delivery

The Purchaser and the Supplier hereby select transportation as the method of consignment for all Fuel under this Agreement. Title to and risk of loss of Fuel will pass to Purchaser and Delivery of Fuel will be considered to have been made when it is unloaded at the Purchasers location

Quality and Specification

The Fuel delivered hereunder shall conform to the following specifications As Received and shall be deemed to be Conforming Fuel:

Supplier warrants that it will deliver Fuel which consistently complies with the Guaranteed Specification. Delivery of Fuel, not at the Contract Guaranteed or Contract Typical Specifications as hereinabove defined, although not rejectable, for prolonged periods of time shall constitute a material breach of this Agreement.

Acceptance or Rejection

In the event Purchaser determines the Fuel to be non-conforming, Purchaser, in its sole discretion, may:

a. Accept the Fuel whereupon Purchaser is entitled to an adjustment to the Base Price in an amount agreed upon by Parties; or

b. Reject the non-conforming Fuel whereupon Supplier shall deliver conforming Fuel within working days.

Upon rejection, the Supplier shall instruct the Purchaser to return non-conforming Fuel to the Supplier. Any costs associated with the delivery, return or diversion of the non-conforming Fuel shall be borne by the Supplier.

Right to Cover

In the event that Supplier fails to provide conforming Fuel within working days of the notice of rejection, Purchaser may, but shall not be required to purchase an equivalent amount from another supplier. Any Fuel purchased pursuant to this paragraph shall be subtracted from the Annual Quantity as may be adjusted in accordance with this Agreement.

Suspension of Performance for Non-Conforming Fuel

If the Fuel delivered hereunder averages, over a time period, the Purchaser shall have the right to suspend deliveries under this Agreement until the Supplier demonstrates to the reasonable satisfaction of the Purchaser in writing that the deviations from specifications.

In the event the Purchaser experiences equipment problems or other difficulties in Fuel, or determines through subsequent random sampling that previously accepted Fuel does not meet specifications and such non-conforming Fuel is found in significant quantities, the Purchaser shall give prompt notice of such discovery to the Supplier and shall have the right to halt consignments until the Fuel complies with the terms of this Agreement.

Weights

All costs associated with weighing the Fuel shall be borne by the Supplier. The weight of the Fuel sold and delivered hereunder shall be determined from the Suppliers scales or scales approved by the Supplier. Any scale used to measure the Fuel shall be maintained and operated in accordance with procedures acceptable to the Purchaser and shall be professionally certified at intervals of no less than six months to be in conformity with the most current, industry accepted Scale Handbook. The Supplier shall give immediate notice by telephone to the Purchaser if the Supplier's weighing become inoperative or are discovered to be inaccurate. In the absence of scale weights from the Supplier, the Supplier and the Purchaser will mutually agree upon the means of determining the weight of the Fuel sold, delivered and purchased hereunder. Such methods as may be mutually agreed upon shall not necessarily be the same as required under the tariff for payment of freight.

A net weight will be determined and reported to the Purchaser for each consignment of Fuel hereunder. The aggregate net weights determined during any payment period shall be accepted as the quantity of fuel sold and purchased during such period for which invoices are to be rendered and payment to be made.

The Purchaser shall have the right to have a representative present at any and all times to observe the determination of weights. If the Purchaser should at any time question the accuracy of the weights, the Purchaser shall so advise the Supplier and the Supplier shall permit the Purchaser's representative to test the Supplier's weighing devices or methods.

Sampling

Purchaser shall sample and analyze, or cause to be analyzed Fuel delivered hereunder in accordance with the applicable standards.

Transfer of Title

Once the supply of the Fuel is effected at the delivery point in the purchasers container by the Supplier, the property, title and risk of loss of Fuel shall stand transferred to the Purchaser. The Supplier shall in no way responsible or liable for the security or safeguard of the Fuel so transferred. The Supplier shall have no liability, including towards increased freight or transportation costs.

Price of Fuel

The price of Fuel delivered hereunder shall be the sum of Base Price, sizing charges, transportation charges up to the delivery point, rapid loading charges, statutory charges, levies and other charges as applicable. Royalties Taxes, duties, and such statutory levies payable to the Government shall be borne by the Purchaser. In all cases the entire freight charge irrespective of the mode of transportation of the Fuel supplied, shall be borne by and to the account of the Purchaser.

Payment

Payment shall be made to

In addition to any other right or remedy provided by law, if fails to pay for the Fuel when due, has the option to treat such failure to pay as a material breach of this Agreement, and may cancel this Agreement and/or seek legal remedies.

Default

The occurrence of any of the following shall constitute a material default under this Agreement:

Remedies on Default

In addition to any and all other rights available according to law, if either party defaults by failing to substantially perform any material provision, term or condition of this Agreement (including without limitation the failure to make a monetary payment when due), the other party may elect to cancel this Agreement if the default is not cured within days after providing written notice to the defaulting party. The notice shall describe with sufficient detail the nature of the default.

Indemnity

The Supplier agrees to indemnify and save harmless Purchaser, its officials, officers, directors, employees and representative from any responsibility and liability for any and all claims, demands, losses (including reasonable attorney's fees at the trial and appellate level) arising out of or resulting from any acts of commission, omission, negligence or fault of the Supplier. The Purchaser, to the extent permitted by law, agrees to indemnify and save harmless Supplier, officers, directors, and employees from any responsibility and liability for any and all claims, demands, loses (including reasonable attorney's fees at the trial at appellate level) arising out of any act of omission, commission, negligence or fault of Purchaser. In no event, however, shall either Party's obligation hereunder include indirect, incidental or consequential damages.

Governing law

This Agreement will be governed by the laws of the State of without giving effect to any conflicts of laws provisions.

Legal Construction

The paragraph headings appearing in this Agreement are for convenience only and shall not affect the meaning or interpretation of this Agreement.

Severability

In the event any one or more of the provisions contained in this Agreement shall for any reason be held invalid, illegal, or unenforceable in any respect, that invalidity, illegality, or unenforceability shall not affect any other provision. This Agreement shall be construed as if the invalid, illegal, or unenforceable provision had never been contained in it.

Waiver

The waiver by any either Party of any default by the other Party hereunder, or the failure of either Party to, at any time, insist upon strict performance with any of the terms and conditions of this Agreement, shall not be deemed a waiver by such Party of any default by the other which thereafter may occur or a waiver by such Party of its right to insist upon strict performance by the other Party thereafter.

Remedies Cumulative

Remedies provided under this Agreement shall be cumulative and in addition to other remedies provided by law.

Parties Bound

This Agreement shall be binding on and inure to the benefit of the parties to this Agreement and their respective heirs, executors, administrators, legal representatives, successors and assigns as permitted by this Agreement.

Entire Agreement

Except as otherwise provided herein, this Agreement may not be amended, supplemented or otherwise modified except by written instrument signed by the Parties hereto.

Amendments

This Agreement may be amended by the parties only by a written agreement.

Attorneys' Fees

If any action at law or in equity is brought to enforce or interpret the provisions of this Agreement, the prevailing party will be entitled to reasonable attorneys' fees in addition to any other relief to which that party may be entitled.

Notices

All notices shall be given to the parties at their respective addresses set forth above.

Signatures

This Agreement shall be signed by on behalf of and by on behalf of .