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The Sourcing Fee Agreement is essential for businesses operating in the Philippines that engage external parties to assist with procurement and sourcing activities. This document becomes necessary when companies seek to formalize their relationship with sourcing agents or agencies who help identify, evaluate, and secure suppliers, products, or services. The agreement, governed by Philippine law, typically includes detailed fee structures (which may include fixed fees, commission-based arrangements, or success fees), service scope definitions, performance metrics, and compliance requirements. It's particularly relevant in the context of the Philippines' growing role in global supply chains and must comply with local commercial laws, tax regulations, and industry-specific requirements. The document protects both parties by clearly defining responsibilities, payment terms, and dispute resolution procedures while ensuring alignment with Philippine legal frameworks including the Civil Code and relevant tax regulations.

1. Parties: Identifies and provides full details of the contracting parties including their legal names, addresses, and company registration numbers

2. Background: Sets out the context of the agreement, including the sourcing services required and the parties' intentions

3. Definitions: Defines key terms used throughout the agreement to ensure clarity and prevent misinterpretation

4. Scope of Services: Detailed description of the sourcing services to be provided, including specific responsibilities and deliverables

5. Fee Structure: Specifies the fees payable, calculation method, and payment terms including any success fees or commission structures

6. Payment Terms: Details the timing and method of payments, including invoicing requirements and payment currency

7. Term and Termination: Specifies the duration of the agreement and circumstances under which it can be terminated

8. Obligations of the Parties: Lists the specific duties and responsibilities of both the service provider and the client

9. Confidentiality: Provisions protecting confidential information exchanged during the sourcing process

10. Intellectual Property: Addresses ownership and usage rights of any intellectual property involved in or resulting from the services

11. Warranties and Representations: Standard warranties given by each party regarding their capacity and authority to enter into the agreement

12. Limitation of Liability: Sets out the extent and limitations of each party's liability under the agreement

13. Governing Law and Jurisdiction: Specifies Philippine law as governing law and determines jurisdiction for dispute resolution

14. General Provisions: Standard boilerplate clauses including notices, entire agreement, and severability