Volume Guarantee Agreement

“Our family planning team asked, “Can we do something about contraceptive pricing?” recalls Natalie Revelle, who leads volume assurance efforts at the Gates Foundation. Transport SRL approved the TWTA project, but added an annex that set rates for its services. A volume guarantee was linked to these tariffs, the more products were shipped, the lower the price. Transport SRL referred the TWTA to the distributor, including the schedule, as well as a communication that it had added prices and payment terms to the TWTA. Transport SRL did not, however, refer to the volume guarantee set out in the schedule. Both parties then signed the TWTA. The distributor was ordered to pay the unpaid invoices, but Transport SRL`s application for replacement damages caused by non-compliance with the volume guarantee was denied. However, the Tribunal found that this was not the case. The professional did not consider the installation as a volume guarantee and did not oblige it to do so. According to the Tribunal, it was Transport SRL that was the matter of expressly indicating the contents of the facility. Volume guarantee structures are instructive for a growing group of foundations and other effects investors eager to use private capital for large-scale changes. The agreements are particularly instructive for investors in emerging markets and marginal growth, where lower prices can be offset by high sales to a rising consumer class. What could also be of practical interest is the fact that the court did not consider THE TWTA to be an initial agreement between the parties.

This shows that the parties must bear in mind that oral agreements are as valid as written agreements. A signature is not required. Under Dutch law, an agreement is made by an offer and its acceptance. There are no formal requirements. In principle, neither offer nor acceptance should be made in a prescribed form. Oral agreements are also valid. Because of this freedom, agreements are often concluded quickly. While the less formal requirements seem to benefit the transport industry, the decision of the Utrecht District Court shows that there are pitfalls to consider. This stop is of particular importance for the transport and logistics sector, where quantity guarantees are regularly intermediate and forwarders.

The Commission therefore found that the IESE Committee had found that there had been no agreement on whether the parties had subsequently agreed on a volume guarantee. This may have happened, given that the volume guarantee was included in the TWTA facility. A Dutch dairy distributor was looking for a new business partner for transport and storage services in Italy. When identifying a new proposed partner (Transport SRL), contract negotiations took place in a short period of time. In particular, the parties discussed the expected turnover under the agreement. After reaching consensus on key aspects of their partnership, the distributor sent a draft written Temporary Storage and Transportation Contract (TWTA) to Transport SRL. In the absence of deliberate intervention, the virtuous cycle, of high volume and low prices, is often blocked by perceptions of risk. If, now, real money must be invested to meet uncertain demand in the future, most companies are hesitant. Volume guarantees eliminate the long-term financial risk of increased capacity through promising long-term sales from producers. Back from London, the Family Planning Program and the internal Related Investment (PRI) team of the Bill and Melinda Gates Foundation set out to help Melinda achieve this goal.