IMPORTERS CONTRACT

between

FAIR TRADEMARK CANADA (also known as TransFair Canada)
having its registered office at
323 Chapel Street, 2nd Floor Ottawa, Ontario K1N 7Z2

and

Company X (hereinafter the "Importer")

Preamble

TransFair Canada is an umbrella organization of European organizations involved in fair-trading. It is the owner of the international trademark "TRANSFAIR", which is licensed to companies who offer for sale fairly traded products. TransFair Canada also co-operates with other fair trade organizations in Europe, which also grant licenses for their respective trademarks. The Importer wants to import fairly traded coffee and sell it to the users of the TransFair Canada trade mark and of the trade marks of the other organizations. For this purpose, TransFair Canada and the Importer (hereinafter the "Parties") enter into the following agreement:

1 Contract Product

(1) The Contract Product is fairly traded coffee, i.e. coffee which has been produced, traded, processed and marketed in accordance with those criteria established by TransFair Canada.

(2) TransFair Canada may unilaterally change the criteria mentioned in paragraph (1). TransFair Canada will usually publish the change in criteria well in time. The criteria valid at the time of the ratification of this Contract are laid down in Appendix 1.

(3) If the criteria mentioned in paragraph (1) are changed, and if the Importer is unable, upon receipt of the publication, to fulfil, within the published period of notice pursuant to paragraph (2), already-existing purchase obligations which are affected by the change, the Parties shall negotiate a reasonable further deadline for the Importer to fulfil these purchase obligations.

2 Supply Sources

(1) The Importer may import the Contract Product from producers or producer associations, which are listed in the TransFair Canada Producer Register. TransFair Canada has the right unilaterally to change this Producer Register. TransFair Canada will normally issue notice of any removals of a producer or a producer association from this register well in advance. The Producer Register valid at the time of the ratification of this Contract is reproduced as Appendix 2. § 1 (3) applies analogously.

(2) The Importer may apply to have further producers or producer associations added to the Producer Register. TransFair Canada is free to decide on this application. The Importer may only import from the producers or producer associations once they have been added to the producer register.

(3) The Importer undertakes not to import the Contract Product or other coffee, for which it is claimed that its producers or producer associations receive a higher, in particular a "just" or "fair" price, from any other suppliers than those mentioned in paragraphs (1) and (2).

(4) The Importer is obliged to pay the producers or producer associations a minimum price as shown in Appendix 1 to this Contract for the Contract Product. TransFair Canada shall have the right to amend the said Appendix.

1 (3) applies analogously.

3 Buyers of the Importer

(1) Without the permission of TransFair Canada the Importer will not provide coffee to licensees of TransFair Canada and its national agencies, licensees of other fair trade organizations co.-operating with TransFair Canada or other third parties of which it is claimed that its producers or producer associations would receive a higher, in particular a "just" or "fair" price, unless he is dealing with the Contract Product. The Importer has no legal claim to such permission.

(2) TransFair Canada will give the Importer an up-to-date list of licensees of TransFair Canada, its national agencies and other fair trade organizations co-operating with TransFair Canada and will always publish changes without delay.

4 Accounting

If the Importer purchases, processes or deals in compliance with º 2.3 and º 3 of this Contract simultaneously other coffee than the Contract Product, he is obliged to show the purchase, processing and the dealing with the Contract Product separately in his books.

5 Unfair Competition

(1) The Importer undertakes when promoting or selling the Contract Product not to offend against legal regulations governing unfair competition. He has been informed about the strict demands of the legal system regarding promotional activities with an ethical component. The advantages of fair-trading for the small producers are to be depicted in a positive and truthful manner; any denunciation of rival coffee products not marketed via fair trade channels is to be avoided. In cases of doubt, the Importer should seek an agreement with TransFair Canada or the national member organization authorized by TransFair Canada or other fair trade organization co-operating with TransFair Canada.

(2) The Importer informs TransFair Canada without delay about legal proceedings undertaken by him or against him on matters of competition.

6 Rights of Control and Information

(1) The Importer will provide TransFair Canada or the national member organization authorized by TransFair Canada or other fair trade organization co-operating with TransFair Canada at the end of every month of a calendar year with copies of those purchases and sales contracted in the month of the calendar year just finished, and he will also provide copies of the delivery notes covering the Contract Product as purchased or sold by himself. These documents need to show the suppliers and buyers respectively, as well as the quantities and quality of the Contract Product. The individual deliveries need to be traceable by means of the documentation from the source of the goods to the point of transfer to the buyers of the Importer.

(2) The Importer undertakes to provide within six months of the end of every business year a written statement of the tax consultant or accountant hired by him which certifies for the completed business year the statements submitted in accordance with paragraph (1) of this article.

(3) TransFair Canada or the national member organization authorized by TransFair Canada or the other fair trade organization co-operating with TransFair Canada has at any reasonable office hour the right to have an authorized representative inspect all business documents and production processes in the business premises and offices of the Importer, as long as this is relevant to the control of the compliance with the clauses of this Contract. The Importer is required to present and make possible the copying of the relevant documents. He is furthermore required to provide the information required. If it transpires that the Importer in breach of contract, he shall bear the costs of the control measures.

(4) The Importer agrees to let TransFair Canada do a credit check through an authorized Credit Bureau.

(5) TransFair Canada undertakes to keep all business secrets of the Importer, about which it may gain knowledge, in confidence and not pass them on to third parties, and to impose the same obligation upon its employees, any national member organizations authorized by it or other fair trade organization co-operating with TransFair Canada and their employees.

7 No Right to Use the Collective Mark

The Importer is not entitled on the basis of this Contract to use the TransFair Canada mark or to levy from his contract partners license fees for the provision of the Contract Product or other services in connection with the trade of the Contract Product. The Importer may, however, be authorized by TransFair Canada to collect the license fees of TransFair Canada.

8 Duration of Contract

(1) This Contract shall enter into force on <DATE> and is concluded for an indefinite term.

(2) Either Party may terminate this Contract at any time with a period of notice of three months to the end of any month. The right to immediate termination for serious reasons remains unaffected.

(3) Serious reasons, which give TransFair Canada the right to immediate termination, are in particular

1. Violation by the Importer against § 2 (3) and (4)
2. Repeated delay of reporting duties as specified in § 6 (1) and (2)
3. Refusal to comply with the rights of control and information of TransFair Canada or its appointed agents.

9 Procedure for Liquidation of the Contract

(1) The Importer is entitled to advertise and sell the Contract Product until the termination of this Contract and no longer. This also applies in the case of immediate termination of the Contract by TransFair Canada. In the case of ordinary termination of the Contract, the Parties will negotiate a limited use-up period for the Importer for Contract Products which he had in stock at the time of notice being given of termination of the Contract or concerning which he had already entered into binding purchase obligations which were no longer unilaterally revocable. The assessment of this use-up period will take into consideration on the Importer's side his interest in the smallest possible financial loss from the liquidation of the present Contract, any joint responsibility on his part for the termination and his alternative sales opportunities, and on TransFair Canada's side the market responsibility for the Contract Product, the credibility of fair trading and the interest of all importers and licensees of TransFair Canada and of the national member organizations and of other fair trade organizations co-operating with TransFair Canada in equal treatment.

(2) Upon termination of this Contract or upon the expiry of the use-up period agreed in any individual case, the Importer has to hand over to TransFair Canada all documents which he has received from TransFair Canada (Producers Register, list of licensees, etc.). The Importer does not have the right of detention.

10 Final Clauses

(1) Changes of this contract need to be in writing. In cases where unilateral changes or adaptations of the Contract by TransFair Canada are possible, communication in writing from TransFair Canada or the authorized national member or the other fair trade organization co-operating with TransFair Canada suffices.

(2) Appendices 1 to 3 in their relevant versions are part of this Contract. The versions relevant at the time of ratification are attached.

(3). An English language version of this Contract will be drawn up. However, the German language version is the decisive one.

11 Jurisdiction and Governing Law

(1) All legal proceedings in connection with this Contract have to be dealt with in Stuttgart. TransFair Canada has the right to open a court case at the seat of the Importer, too.

(2) The laws of the Federal Republic of Germany govern this Contract and all legal proceedings arising from it.

12 Severability

In the case of any of the individual regulations of this Contract being or becoming invalid totally or partially, or in the case of gaps in this Contract, all other rules of this Contract remain valid. Instead of the invalid clause or instead of the gap such a regulation gains validity, which would have been agreed upon by the Parties, had they taken into account the invalidity or had they recognized the gap.

Appendix 1

Recommended Minimum Prices for the Purchase of Raw Coffee The prices listed in the following pages are recommended minimum prices for the purchase of raw coffee from the producer-associations. Therefore they are not binding for the licensee or the importer. The licensee or importer, however, are advised that they might violate regulations concerning unfair competition, if they describe coffee purchased at prices lower than the ones listed on the following pages as "fairly traded coffee", and/or mark it with the TransFair-label. Max Havelaar/TransFair/Fairtrade conditions for the purchase of coffee

1. In any commercial document this set of conditions will be referred to as the "Max Havelaar/TransFair/Fairtrade Conditions".
   
   
2. Only organizations of small coffee producers inscribed in the Max Havelaar/TransFair/Fairtrade Coffee Producers' Register (see Appendix 4) will be entitled to sell green or processed coffee to be marketed under one of the FairTrade labels promoted by the signatories to the Max Havelaar/ TransFair/Fairtrade Coffee Producers' Register and can claim the rights derived from that inscription.
   
   
3. Buyers and sellers will procure to establish a long term and stable relationship in which the rights and interests of both are mutually respected. No deals will be made for a period less than one crop-cycle. Any long-term agreement will be confirmed by means of the exchange of letters of intent, in which volume, quality, price-fixing procedures and shipment schedule, if applicable, are mutually confirmed. Parties will have to agree on the letter of intent before the harvest season valid for that specific origin has started.
   
   
4. Also all other customary conditions applicable to any international transaction will apply, such as the conditions of the European Contract of Coffee, latest edition (hereinafter to be referred to as ECC- conditions), unless overridden by any of the special Max Havelaar/ TransFair/Fairtrade conditions as specified herein.
   
   
5. For Arabicas, the New York "C" market shall be the basis of calculation. The price shall be established in US$-cents per pound, plus or minus the prevailing differential for the relevant quality, basis F.O.B. origin, net shipped weight.

   For Robustas, the London "LCE" market shall be the basis of calculation. The price shall be established in US-dollars per metric ton, plus or minus the prevailing differential for the relevant quality, basis F.O.B. origin, net-shipped weight.

   When by legal regulation, all coffee has to be passed through the auction, importer and exporter will agree on a reasonable margin for the exporter to cover his costs.

6. Over the prices established under 5 above, there shall be a fixed premium of 5 US$-cents per pound.

7. For certified organic or biological coffee with officially recognized certification, that will be sold as such under the mark of one of the marking organizations signatory to the agreement governing the International Fair Trade Coffee Producers' Register of which these Max Havelaar/TransFair/ Fairtrade conditions form part, an additional premium of 15 US$-cents per pound green coffee will be due, on top of the Max Havelaar/TransFair/Fairtrade price as determined under points 5 and 6.

8. To protect the producers, minimum prices have been defined which overrule the Max Havelaar/TransFair/Fairtrade prices as defined under 5 and 6 when these are lower than the relevant minimum price. The minimum prices vary according to type and origin of the coffee. The following minimum prices, including quality differentials, the fixed Max Havelaar/ TransFair/ Fairtrade premium of 5 US$-cents per pound and the organic premium of 15 US$-cents per pound, apply: (all prices in-US$- cents per pound F.O.B., port of origin)

9. Payment shall be net cash against a full set of documents on first presentation. The documents to be presented will be those stipulated in the contract and the ones customary in the coffee trade.
   
   
10. On request of the seller, the buyer shall make available up to 60% of the value of the contract, valued against the Max Havelaar/TransFair/ Fairtrade minimum price, in credit facilities in favour of the seller upon the signing of the letter of intent as described under 3, or at any date after that, according to the wishes and interests of the seller. The buyer may require the confirmation of the letter of intent by means of a regular purchase contract, prior to the release of the credit. All credit instruments, direct as well as indirect, are allowed, as long as the resources are effectively and at a reasonable cost available to the producer organization at the moment the collection of the harvest starts. The corresponding interest charges shall be covered by the seller at current commercial interest rates or better, according to the credit source. Reimbursement of the loan and interest charges shall be according to the terms and conditions mutually agreed upon in a separate loan agreement.
    
    
11. In case of dispute, parties are held to inform the involved marking organization signatory to the agreement governing the International Fair Trade Coffee Producers' Register, of which these Max Havelaar/ TransFair/Fairtrade conditions form part. If possible, mentioned marking organization will work out a settlement proposal to be presented to both parties. If this settlement proposal is not acceptable to either of the parties, the dispute will be submitted to arbitration according to the ECC conditions, latest edition.

Appendix 2- Register of Fair Trade Coffee Producers

ORG_ID	ORG_SHORT	PH_PLACE	PH_REGION		COUNTRY
0001	CORACA IRUPANA	Irupana	Sud Yungas; La Paz		Bolivia
0002	COAINE	Caranavi ; Central Nor Este	La Paz		Bolivia
0003	CENCOOP	Coroico	La Paz		Bolivia

see the remainder of this list in the previous menu

Appendix 3

Guidelines for the Importation of Coffee from Small Producers or Small Producer Associations

1. Contractual arrangements concerning the importation of coffee have to be entered into for a minimum of one crop cycle, with the stated intent on behalf of the buyer to renew the contract.
   
   
2. Contractual arrangements concerning the importation of coffee as well as any changes thereof have to be documented in writing. This written agreement has to include all major elements of the contract, in particular regarding volume, quality, price, and conditions of transportation. The buyer may only invoke clauses beneficial to him, provided they have been agreed upon in writing.
   
   
3. Payment is to be effected netto upon the first request against the submittance of the documents. The following documents have to be submitted:
   • bill
   • certificate of weight
   • bill of lading fob port of exportation
   • Certificate of Origin, Form A (G.S.P.) or EUR/1-certificate, if applicable
     
     
4. Upon the request of the seller the buyer is obliged to provide, at the date of signing of the letter of intent or later, up to 60% of the minimum of the contract-value as a credit. The interest to service the credit has to be paid for by the seller; they may not exceed the level of interest and fees common in the market. The credit contract is to be entered separately and in writing, and it has to include regulations on the mode of repayment.
   
   
5. The conditions of the European Contract of Coffee (ECC-Conditions), latest version, have to be included in all international agreements between the parties concerned.
   
   
6. Coffee purchased under TransFair-conditions has to be taken from the latest possible harvest, unless the parties do not specifically agree otherwise, and it has to comply with the following minimum standards:
   
   
   1. For Arabica varieties: European preparation, clean cup
      
      
   2. For Robusta varieties: Fair average quality, clean cup.
      
      
7. If conflicts arise, the parties shall inform TransFair. If possible, TransFair will submit a suggestion for a solution. In case the parties do not agree on this solution, the conflict has to be resolved in accordance with ECC-regulations at a court of arbitration.

Version 4.96

[Transfair Canada] [Who We Are]
[Other Fair Trademarks] [Labelling Organisations] [Fair TradeMarks Conditions]

Return to Main