Greg MD Blog

Destination Contract

Destination Contract Agreement: This Destination Contract (hereinafter referred to as “Supplier”) shall be executed in Indiana on March 10th, 2025. Its duration is three years, concluding on March 10th, 2028. The contract, serving as a formal and binding agreement, is established between the Tire Manufacturer (hereafter referred to as the “Supplier”), located at 2020 Broadway Ave., Fort Wayne, Indiana, 46801, and the Car Assembly Plant (hereafter referred to as the “Buyer”), located at 4949 Main St. Louisville, Kentucky, 41005.

A Destination Contract is a specific type of agreement in which the Supplier, a Tire Manufacturer (“Seller”), 2020 Broadway Ave. FT. Wayne, Indiana 46801 delivers goods to a designated location, typically at the Car Assembly Plant (“Buyer’s”) 4949 Main St. Louisville, Kentucky 40202. Under this contract, the Supplier assumes the risk of loss or damage to the goods until they arrive at the specified destination. Furthermore, the Supplier is responsible for arranging and bearing the expenses of transporting the goods to the buyer’s location.

This contract guarantees a reliable supply of tires, effectively supporting the assembly line’s manufacturing requirements. The Tire Manufacturer is dedicated to maintaining prompt and efficient deliveries, thereby helping to uphold high production standards throughout the agreement provided to Car Assembly Plant at 4949 Main St., Louisville, Kentucky, 41005.

1. Tire Manufacturer (hereinafter referred to as “Supplier”), located at 2020 Broadway Ave. Fort. Wayne, Indiana 46801.
2. Car Assembly Plant (hereinafter referred to as “Buyer”), located at 4949 Main St. Louisville, Kentucky 40202.

Terms and Conditions:

1. Tire Supply:

1. The Supplier agrees to provide the Buyer 20,000 all-weather tires monthly for the next 3 years.
2. Each tire will have a 50,000-mile warranty.
3. The price agreed upon is $35 per tire.
4. The agreement is a Destination Contract.
5. Delivery Schedule:
6. Deliver the tires to keep a two-day supply at the Buyer’s facility.
   1. The Buyer does not have enough room to store any additional tires.

2. Tire Manufacturer (“Supplier”) will face a penalty for delivering excess tires.
3.  The specific terms of this penalty include an extra storage fee, personal expense, and moving goods to the original location, Car Assembly Plant (“Buyer”), located at 4949 Main St. Louisville, Kentucky 40202.
4. Downtime Expenses:
   • The Supplier will be responsible for any downtime expenses incurred by the Buyer due to a lack of tire supply.
   • The Buyer must pay the assembly workers if the assembly line stops because there are no tires.
5. Arbitration Clause:
6. The Uniform Arbitration Act (Indiana Code Title 34, Article 57, Chapter 2) governs arbitration in Indiana.      
7. The arbitration clause resolves all disputes from this contract in Indiana. The substantive law of Indiana will govern the arbitration process and the interpretation of the Destination Agreement. Disputes arising from this contract governed under Indiana Law adjudicate per sections 4.1 to 4.9 detail the Arbitration Clause.
   1. Scope of Arbitration: Review this Arbitration Provision carefully, as it will require theCar Assembly Plant to dispute the “A Destination Contract” to reach a settlement dispute with the Tire Manufacturer either informally or formally, with other parties (and settlement negotiations can and often do well into a lawsuit, even to the day of the trial). Either party may opt out of this Arbitration Provision by following the instructions below. There may be a lawsuit alleging class, collective, coordinated, consolidated, and/or representative claims on the Car Assembly Plan’s behalf against the Tire Manufacturer.
   1. Location of Arbitration: The arbitration shall be held at the Arbitration Building in Fort Wayne, Indiana, in Allen County. This venue ensures a practical and efficient process for all parties. This arbitration agreement will follow Indiana laws, which is where the business contract was made.

Unless explicitly stated otherwise, this Arbitration Provision shall apply to any legal disputes—regardless of whether they are past, present, or future—that arise from or are related to our relationship, including any interactions with our agents, employees, executives, officers, investors, shareholders, affiliates, successors, assigns, subsidiaries, or parent companies. Each of these entities may invoke this Arbitration Provision as third-party beneficiaries. Additionally, this provision shall remain in effect even after the termination of the relationship.

• Arbitration Rules: Arbitration constitutes a legitimate mechanism for resolving contracts classified as “A Destination Contract;” however, it attains binding effect solely in the presence of an explicit arbitration clause within the contract. This Arbitration Provision applies to all claims initiated by either the Car Assembly Plant (hereinafter referred to as “you”) or the Tire Manufacturer (hereinafter referred to as “us”). Indiana follows the rules of the American Arbitration Association (AAA) for arbitration. The AAA offers a comprehensive framework designed to facilitate the resolution of business disputes through arbitration, with a strong emphasis on efficiency, confidentiality, and cost-effectiveness. The parties involved may invoke the Commercial Arbitration Rules relevant to arbitration proceedings administered by the AAA in Indiana. Employers should consider these legally sanctioned alternatives for resolving workplace disputes outside the conventional courtroom setting.
  • Arbitrator Selection: Arbitration is where each party selects an arbitrator by choosing one or more arbitrators, and this “panel” of arbitrators then hears and decides the dispute about the business purchase agreement. Arbitration agreements are valid and enforceable in Indiana, except for specific cases. The Uniform Arbitration Act is in the Indiana Code Title 34, Article 57, Chapter 2. Civil Law and Procedure § 34-57-2-1 Sec. 1. (a) A written agreement to submit to arbitration is valid and enforceable, an existing controversy or a controversy thereafter arising is valid and enforceable, except upon such grounds as exist at law or in equity for the revocation of any contract.
  • Governing Law: Indicates the substantive law that will govern the arbitration proceedings and the interpretation of the contract. The substantive law of the State of Indiana will apply to the arbitration of the Destination Agreement and the interpretation of the contract. Contract disputes are subject to Indiana law. The award granted by the arbitrators, which is final and binding, will provide a sense of security to both parties.
  • Costs and Fees: Each party shall bear costs and expenses, including attorney fees, incurred in arbitration. The arbitrator(s) fees and arbitration administrative costs shall be equally shared unless otherwise determined in the award.
  • Confidentiality: Arbitration proceedings are typically private, which helps maintain confidentiality. A broad scope of arbitration manages all disputes confidentially, safeguarding the parties’ sensitive information.
  • Interim Measures: Allow for the possibility of interim or provisional measures by the arbitrator to protect the interests of the parties before the final award is issued.
  • Finality of arbitration: The finality of the arbitration clause in Indiana is that a written business purchase agreement to submit to arbitration is valid and enforceable, and an existing or future controversy arising under a contract is also valid and enforceable. Arbitration awards are final, binding, and enforceable by courts. 

• Liquidation Clause:
  • The final contract will include negotiated liquidation clause terms.

1. Definition of Breach: This section outlines the specific criteria that constitute a breach of the contract. Maintain a constant two-day supply of tires at the Buyer’s facility. The breach may occur in various forms, including but not limited to failure to deliver goods or services within the prescribed timeframe, failure to meet established quality standards, or any other contractual obligations explicitly stated unless prior written authorization has been obtained from an authorized agent or representative of the Car Assembly Plant. The responsibility to define and manage breaches lies with the Tire Manufacturer.
2. Liquidation Clause: This clause in a contract specifies that one party must pay the other Seven Hundred Thousand Dollars ($700,000) per month as damages if there is a breach of contract. Including this clause establishes a clear and pre-determined compensation figure, minimizing the potential for lengthy and costly legal disputes regarding the damages incurred.
3. Conditions for Payment: Specify when liquidated damages will be paid if the contract is breached within 30 days. This could include a specific time limit for payment and any required documentation or proof of the breach.
4. Exclusions and Limitations: Identify any exclusions or limitations to the liquidated damage. What is not covered is a breach by weather or accident-related issues. A breach is addressed when it falls under the liquidated damages clause controlled by the party involved. A claim cap for one hundred thousand dollars ($100,000) of damage may exist.
5. Dispute Resolution: Include a provision for resolving disputes related to the liquidation clause. The dispute could involve arbitration clause section 4, sub-section 4.1-4.9 of the Destination Contract, or other dispute resolution methods.
6. Survival Clause: The liquidation clause will remain effective for one year after the early termination of the Destination Contract, covering sales of $8,400,000. This provision ensures that the rights and obligations related to liquidated damages will persist until one year after the early termination. In the final year of the contract, if either party breaches this agreement, they will be liable to pay two million dollars ($2,000,000) as a penalty for breach of the survival clause in the Destination Contract due to early termination.
7. By adhering to these outlined conditions, both parties can ensure a fair and efficient resolution in case of contract breaches. Clearly defining these contract conditions helps ensure that both parties have a mutual understanding of their obligations and the processes that will govern potential breaches.

• Non-Disclosure Clause:
  • Both parties—Tire Manufacturer (“Supplier”) located in Fort Wayne, Indiana, and Car Assembly Plant (“Buyer”) based in Louisville, Kentucky—agree to maintain the confidentiality of this contract’s terms and not to disclose any information to third parties without prior written consent. This Destination Contract (“Contract”), established in the State of Indiana, is effective as of March 10th, 2025, and will last three years, concluding on March 10th, 2028. The parties involved are the Tire Manufacturer (“Supplier”) from Fort Wayne, Indiana, and the Car Assembly Plant (“Buyer”) from Louisville, Kentucky.
    • Confidential Information: For this Destination Contract, “Confidential Information” shall include all information or material that has or could have commercial value or other utility in the business in which the Disclosing Party is engaged. The Disclosing Party must label the materials with “Confidential” or a similar notice if Confidential Information is recorded. This Destination Contract cannot be discussed outside the negotiating agents representing each company.
    • Obligations of Receiving Party: The Receiving Party shall hold and maintain the Confidential Information in strictest confidence for the sole and exclusive benefit of the Disclosing Party. The receiving Party shall carefully restrict access to Confidential Information to employees, contractors, and third parties as reasonably required and shall require those persons to sign non-disclosure restrictions that are at least as protective as those in this Agreement. Receiving Party shall not, without prior written approval of Disclosing Party, use for Receiving Party’s benefit, publish, copy, or otherwise disclose to others, or permit the use by others for their benefit or to the detriment of Disclosing Party any Confidential Information. Receiving Party shall return to Disclosing Party all records, notes, and other written, printed, or tangible materials in its possession pertaining to Confidential Information immediately if Disclosing Party requests it in writing.
    • Time Periods: The non-disclosure provisions of this Agreement shall survive the termination of this Agreement, and the Receiving Party’s duty to hold Confidential Information in confidence shall remain in effect until the Confidential Information no longer has commercial value or utility in the business in which the Disclosing Party is engaged.

Entire Agreement: This Agreement constitutes the entire agreement between the parties concerning the subject matter hereof and supersedes all prior agreements and understandings.

Signatures IN WITNESS WHEREOF, the parties have executed this Destination Contract as of the date first written above.

SUPPLIER [Tire Manufacturer]

By: ___________________________________

Name: [Name of Authorized Signatory]

Title: [Title]

Date: _________________________________

BUYER [Car Assembly Plant]

 By: ___________________________________

Name: [Name of Authorized Signatory]

Title: [Title]

Date: ________________________________

Written by : Greg MD