EU and UK Sales & Delivery Agreement
Background
A. Passport Global Inc whose registered office is at 3790 El Camino Real #854, Palo Alto, CA 94306, USA (“Passport”), carries on the business of a global shipping solutions provider and of buying and selling goods, and the Merchant (“Merchant”) carries on the business of selling goods.
B. Pursuant to changes to VAT law in the United Kingdom (“UK”) effective 11:00PM on 31 December 2020 (GMT) certain VAT obligations are now imposed on Merchants in connection with sales of goods located outside of the UK, to be delivered to consumer Customers in the UK, where the value of the consignment containing such goods is valued at £135 British Pound Sterling or less.
C. There are also changes to VAT law in the European Union (“EU”) effective 1 July 2021 (CET) governing how EU VAT may be accounted in respect of distances sales of imported goods sold to consumer Customers in the EU in consignments not exceeding €150 Euros.
D. In these markets, a tax ID, value-added tax (VAT) ID, or import number (collectively, “ID”) may be required to comply with, expedite, or complete customs clearance services and/or to comply with indirect tax regulations.
E. Where the Merchant has not provided Passport with their ID, the Merchant wishes to engage Passport to deliver goods to its Customers and, in relation to Qualifying Customer Orders, (i) to sell its goods to Passport and for Passport to sell them to Customers, and (ii) for Passport to account for any VAT that may be due on the sale of the goods to the Customers in the relevant locations. For the avoidance of doubt, any orders for Products placed by Customers which do not fall within the meaning of a Qualifying Customer Order are outside the scope of this Agreement. For example, a sale of goods which exceeds £135/€150, located in USA to be delivered in a single consignment to a customer in France is excluded.
F. NOW, THEREFORE, Passport and the Merchant enter into this Agreement on the following
Agreed Terms:
1. Commencement
1.1 The Parties hereby agree that this Agreement shall be effective from the date it is executed by the Parties. The Parties may agree to vary or add terms to this Agreement by way of a variation signed by both parties or an addendum as appropriate. This Agreement, together with the variation agreement or an addendum agreement shall constitute the complete and entire agreement between the parties regarding the Services.
2. Purchase and Supply of Products
2.1 Where a Customer makes a Qualifying Customer Order:
2.1.1 The Merchant shall provide to Passport, all documentation and make available all relevant information relating to the Products of a Qualifying Customer Order including anything that Passport reasonably requests to comply with any obligation relating to the sale and delivery (including customs clearance), and the Merchant warrants that all statements, documentation and information are, and continue to be true, correct and complete;
2.1.2 The Merchant shall cause the Customer to be aware in its terms and conditions or contract or otherwise, that the Products contained in the Qualifying Customer Order shall be sold to the Customer by Passport;
2.1.3 The Merchant shall sell Products contained in the Qualifying Customer Order to Passport at the Products Prices without VAT included, and Passport shall purchase from the Merchant, such Products contained in the Qualifying Customer Order at the prices stated therein so that Passport shall have the right to dispose of those Products as owner at the time of the sale to the Customer;
2.1.4 The Merchant shall make available the Products contained in the Qualifying Customer Order to (i) Passport, (ii) Passport’s nominated agents and contractors, or (iii) a third party authorized by Passport, to complete delivery.
2.2 Payment received by the Merchant in relation to the sale of Products the subject of a Qualifying Customer Order in Clause 2.1 is deemed to discharge all of Passport’s liability in respect of the amounts due to the Merchant for the purchase of the Products by Passport at the time such payment is first processed. For the avoidance of doubt, if the transaction for payment is cancelled, reversed, or found fraudulent, or for any other reason the Customer does not pay in full, Passport shall have no liability to the Merchant whatsoever.
2.3 After the Merchant’s notification of receipt of payment for the Products from the Customer, then either (i) Passport shall arrange for the delivery of the Products to the Customer by means of its nominated agents and contractors, pursuant to Clause 9 (Delivery) to this Agreement; or (ii) Passport authorizes Merchant to arrange for delivery of the Products in the Qualifying Customer Order to the Customer.
3. Qualifying Customer Orders
3.1 The Merchant shall assign an Order Number to each Qualifying Customer Order and shall notify those Order Numbers to Passport or its nominated agents and contractors. Each Party shall use the relevant Order Number in all subsequent correspondence relating to that Order.
3.2 If the Customer amends or cancels a Qualifying Customer Order, the Merchant shall notify Passport of such amendment or cancellation, and if due to the Customer, shall refund payment to the Customer at Passport’s direction hereby given.
3.3 The Qualifying Customer Order is subject to Schedule 1 Terms of Service to this Agreement being clearly made available to the Customer prior to it placing an Order.
3.4 In the event of any conflict or inconsistency between this Sales & Delivery Agreement and the Passport Terms & Conditions, the Terms & Conditions shall prevail.
4. Merchant’s Obligations
4.1 Passport, as seller of the Products to the Customer included in a Qualifying Customer Order, appoints the Merchant to act as its agent in connection with customer service and the Merchant retains sole responsibility for any warranty, returns, exchanges, refunds or customer service obligations with respect to the Products.
4.2 Where the Merchant agrees to a return of Products or full or partial refund of payment in respect of a Qualifying Customer Order, it is under an obligation to notify Passport within five (5) business days to enable Passport to issue a VAT credit note to the Customer and seek to obtain any refund of VAT from HM Revenue and Customs or other tax authority on its sale to the Customer. The Merchant shall only receive a refund of Passport’s fees including an amount equal to any VAT charged by Passport on the sale of the goods included as part of Passport’s fees once it has been notified in accordance with this Clause 4.2 and a VAT credit note has been issued and Passport has received a credit or repayment of the VAT from HM Revenue and Customs or other similar tax authority.
4.3 The Merchant agrees to cause the Customer to be aware that Passport is the owner, and has the right to dispose of the Products included in a Qualifying Customer Order, as the owner, at or before the point of sale to Customer. In order to fulfil this obligation, the Merchant shall: (a) incorporate a hyperlink to the Schedule 1 Terms of Service to this Agreement in the Merchant’s terms and conditions, and generally make known as appropriate Passport’s status as the seller of such Products: (i) on the Merchant’s website on its FAQ page, (ii) in the order confirmation footer; (iii) in any other relevant section of the Merchant’s website; (iv) in any other place considered appropriate on Passport’s reasonable request; and (b) promptly provide any reasonable assistance (including the provision of documents or information) in relation to any Qualifying Customer Order.
4.4 The Merchant shall not misuse or allow to be misused Passport’s ID which is provided solely for the purposes of enabling Passport to provide its services. The Merchant shall only use the Passport ID to fulfill the obligation to transport the goods which are the subject of this Agreement to the customer and undertakes that it otherwise will keep it confidential and strictly in accordance with data protection law and not disclose or misuse or allow the Passport ID to be misused by any person. If the Merchant is in breach of this clause, and misuse of Passport ID occurs for any reason, the Merchant shall indemnify Passport for any losses or expenses arising including all consequential loss.
5. Quality and Packing
5.1 The Merchant shall comply with all Applicable Laws, enactments, orders, regulations and other instruments relating to the packing, packaging, marking, labelling storage, handling, and delivery of the Products to the Customer.
6. Title and Ownership
6.1 In respect of Qualifying Customer Orders, title and ownership of the Product shall pass from the Merchant to Passport and immediately from Passport to Customer on payment in full and in cleared funds being made by Customer to the Merchant, at the direction of Passport, and having been received by the Merchant.
7. Compliance with Laws and Policies
7.1 In performing its obligations under the Agreement, the Merchant shall comply with all Applicable Laws, statutes, regulations and codes from time to time in force, including, without limitation, the U.S. Export Administration Regulations or applicable U.S. sanctions and embargoes administered by the U.S. Treasury Department, and any equivalent Applicable Laws, statutes, regulations and codes applicable to the UK and the EU wherever applicable.
7.2 Each party shall, at all times, act consistently in its dealings with any tax authority and in its financial returns and tax returns that ownership of the Products in respect of a Qualifying Customer Order is sold by the Merchant to Passport and by Passport to the Customer.
8. Insurance and Indemnity
8.1 The Merchant shall indemnify Passport against all liabilities, costs, expenses, duties, damages and losses (including any direct, indirect or consequential losses, loss of profit, loss of reputation and all interest, penalties and legal costs (calculated on a full indemnity basis) and all and other professional costs and expenses) suffered or incurred by Passport arising out of or in connection with fulfilling any of its obligations under this Agreement and claim made against Passport for actual or alleged infringement of a third party’s rights arising out of or in connection with the supply of the Products to Customers, or in any fault whatsoever in the Products, or with delivery.
9. Delivery, Returns and Customs Clearance
9.1 Passport and its nominated agents and contractors shall where appropriate and to the extent agreed, deliver any Product to the shipping address provided, and any further transportation including but not limited to returns.
9.2 Passport may refuse service, refuse to process or complete Orders, remove or edit content, or cancel such orders for any reason or for no reason, in its sole discretion.
9.3 Delays in the delivery shall not entitle the Merchant or the Customer to claim damages against Passport or its nominated agents and contractors, and Merchant shall indemnify Passport therefor.
9.4 Delivery of an Order shall be deemed to have completed when the Passport’s nominated agents and contractors place such Order at the Customer’s disposal at the shipping address.
9.5 Passport’s nominated agents and contractors have the right to open and inspect any consignment without notice for safety, security, customs, tax or other regulatory reasons.
9.6 Merchant shall authorize, and procure that the Customer authorizes Passport and its nominated agents and contractors to perform any of the following activities as agent of the Merchant or the Customer to the extent agreed by Passport: (i) to make and file customs declarations and all related actions as a direct representative, in the name of, and on behalf of, and at the risk of the Merchant or Customer which expressly includes completing any documents, amending product or Harmonized System codes, and paying any duties, taxes or penalties required under applicable laws and regulations;
(ii) to act as forwarding agent for customs import and export control purposes solely for the purpose of designating a customs broker to perform customs clearance and entry; and (iii) redirect an order to the Customer’s customs broker or other address upon request by any person whom Passport’s nominated agents and contractors believe in its reasonable opinion to be authorized.
9.7 If Passport or its nominated agents are of the reasonable opinion that Products can only be cleared through customs by the Customer, Passport will deliver the customs paperwork to the Customer, and delivery of paperwork constitutes timely delivery.
10. Fees
10.1 Fees payable by Merchant to Passport for Passport’s services under this agreement to Merchant shall include (i) a Delivery Fee, (ii) any import duties and taxes, (iii) any VAT chargeable at the rate applicable to the sale of the Products in the Qualifying Customer Order, and (iv) a sum equal to 5% of the VAT that is, or would be chargeable if the standard rate were to apply to all Products in a Qualifying Customer Order, plus VAT if applicable.
10.2 Passport shall provide the Merchant with a fortnightly statement of fees payable under this Agreement, which shall be payable on presentation.
10.3 Interest shall accrue at a rate of 5% per annum on any unpaid fees after one (1) month of the statement being issued.
11. Termination
11.1 Passport may refuse service, refuse to process or complete Qualifying Customer Orders, remove or edit content, or cancel such Orders for any reason or for no reason, in its sole discretion.
12. Governing Law and Jurisdiction
12.1 Each Party irrevocably agrees to this Agreement and any dispute or claim (including non-contractual disputes or claims) arising out of or in connection with it or its subject matter or formation shall be governed by and construed in accordance with the law of California, United States.
13. Definitions
13.1 In this Agreement, unless the context otherwise requires, the following words and expressions have the following meanings:
“Applicable Law” means the laws of California, United States, the United States Export Administration Regulations or applicable United States sanctions and embargoes administered by the United States Treasury Department and equivalent statutes, regulations and codes of England and Wales or the EU, and if there is a conflict the laws of California shall prevail.
“Delivery Fee” means the fee chargeable by Passport to the Merchant to deliver Products to Customers (as amended from time to time). “Member State”, “third country” and “third territories” have the meaning given by Article 5 of Council Directive 2006/12/EEC.
“Products” means those goods offered for sale via the Merchant’s website which are not of a class or description subject to any duty of excise whether or not those goods are in fact chargeable with that duty, and whether or not that duty has been paid on those goods, or prohibited or restricted goods were they to be imported into the UK or the EU, and which are not subject to any restrictions on export, sale, or transfer in violation of any Applicable Laws.
“Product Prices” means the prices including VAT of the Products as held out for sale to Customer by the Merchant and accordingly, by Passport to Customer; and “Product Price” means the price of an individual Product.
“Qualifying Customer Order” meets all of the following conditions:
(a) It is an order for Product or Products placed via the Merchant’s website which are to be transported from:
• a third country or territory, excluding Northern Ireland (“NI”), to an address in a Member State of the EU (e.g. USA to France);
• a third country or territory, excluding the UK, or from a Member State of the EU to an address in Great Britain (e.g. Germany to England); or
• a third country or territory, excluding NI, to an address in NI (e.g. USA to NI); and
(b) In relation to the transport of a Product or Products to an address:
• in Great Britain or NI, the total intrinsic value of the Product or Products comprising that order does not exceed £135 (one hundred and thirty five) British Pounds Sterling, or where Products comprising an order exceed that sum but are sent in separate consignments, the intrinsic value of each consignment of which the Product or Products form part does not exceed £135 (one hundred and thirty five) British Pounds Sterling; and
• in a Member State of the EU, the total intrinsic value of the Product or Products comprising that order does not exceed €150 (one hundred and fifty) Euros, or where Products comprising an order exceed that sum but are sent in separate consignments, the intrinsic value of each consignment of which the Product or Products form part does not exceed €150 (one hundred and fifty) Euros.
“VAT” means value added tax chargeable in the UK or in a member State of the EU under Council Directive 2006/12/EEC.
“VAT credit note” means a document provided by Passport to the Customer having the effect of adjusting VAT paid or payable under either UK or EU VAT law.