Contractual construction of the marketplace

Any marketplace requires formalization of relations in the form of a contracts . First, the marketplace establishes rights and obligations with suppliers who will distribute goods / services through the marketplace. Secondly, the marketplace must settle relationships with the buyers who will be using the platform. At the same time, there are many marketplace models, so you cannot choose one universal contractual design. You can read what contract options are available for marketplaces in this article.

Contents: 

• Marketplace contracts with suppliers 
  • Agency model between marketplace and supplier
  • Reimbursable services agreement between the marketplace and the supplier 
  • Additional terms in the marketplace agreement: storage and delivery
• Marketplace contracts with buyers 

Marketplace contracts with suppliers

Agency model between marketplace and supplier

The most common way to formalize supplier relationships is through agency services. This model is enshrined in civil law. An agency agreement implies two parties:

• The principal who hires the agent;
• An agent who represents the principal for a fee.

At the same time, agency offers two models of implementation: 

• on its own behalf, but at the expense of the principal 
• on behalf of and at the expense of the principal. 

Consequently, the marketplace is the agent and the suppliers are the principals. An important question is who will have the rights and obligations under such an agreement: the marketplace agent or the supplier-principal? The answer depends on the model, namely on whose behalf the contract is concluded:

• If on behalf of the agent, then he also has rights and obligations, even if the principal is mentioned in the contract or he executes the transaction. In this model, the marketplace will be in charge;
• If on behalf of a principal, then the rights and obligations arise from at UDI fell, i.e. from a specific supplier.  

In practice, this influences the question: to whom the buyer can make claims. However, if marketplace working in the field B2C ( business - to - the consumer ), will apply the Law "On Protection of Consumers' Rights, which imperatively establishes liability aggregators , manufacturers and sellers . The model of the agency agreement does not affect these norms. You can read more about the responsibility of the aggregator in our article "How to launch a marketplace".

This model is implemented if the marketplace is involved in relationships, including settlements, but it is not a party to the contract with the end customer, the marketplace is only a representative. When choosing an agency model, it is worth remembering that this also affects taxation. When choosing this contract, the agent needs to provide reports. Frequency and timing should be stipulated by the contract.

Reimbursable services agreement between the marketplace and the supplier

If the marketplace plays a minimal role and only collects all the information, but does not participate in the transfer of funds for the product / service, then it is worth concluding an agreement for the provision of services for a fee. The essence of the relationship between the marketplace and the supplier will be different. This should be reflected in the subject of the contract: it is necessary to indicate what responsibilities the marketplace and the supplier have to each other.  

Additional terms in the marketplace agreement: storage and delivery

Marketplace models vary and parties are not limited in their choice of design, so they can reallocate responsibilities and deviate from the classic model. This will be reflected in the agreement. Firstly, the marketplace can take over the function of delivering goods, therefore, it will also be responsible for this. Secondly, the marketplace can take on the responsibility of storing goods, this requires more resources from the marketplace. However, the contract must reflect the actual relationship.  

Marketplace contracts with buyers

The relationship from the other side depends on the model with the supplier. If the marketplace has ownership of the goods being sold, then it will be the seller, and the concluded contract will be a classic purchase and sale. However, if ownership did not pass to the supplier, which is more likely, then a contract for the provision of services will be concluded with the buyer.

Thus, only the basic models of contracts were disclosed in the article. The contracts are derived from the algorithms of the marketplace itself, primarily from the calculation procedures. Choosing this or that design, it is necessary to fill it with content - specific conditions. The development of a contract is an important process as it affects the liability of the marketplace in the future and its taxation. If you have any questions or you need help with drafting a contract, please contact the lawyers of A4 Law Firm.