VI. AGREEMENT for SALE of FOREIGN and COLONIAL Patents (in PREC. VI. course of being obtained)—Special Clause enabling Purchaser to retire from any Purchase. colonial and AN AGREEMENT made &c. BETWEEN A. B. of &c. (hereinafter called "the vendor") of the one part and C. D. of &c. (hereinafter called "the purchaser ") of the other part [recite the invention and Recitals. that provisional protection has been obtained at home, as in Agreement IV. ante (a)] AND WHEREAS the vendor has lately made or is about to Applications make application for patent or other similar privileges (hereinafter pending for called "patents") for the colonies and foreign countries mentioned foreign in the Schedule hereto in respect of the said invention: AND WHEREAS patents. the vendor has agreed with the purchaser (by separate contract as Separate to each patent (b)) to sell to him the said patents at the respective contracts to prices mentioned in the said Schedule: AND WHEREAS the purchaser sell same to has immediately before the execution hereof paid to the vendor the sum of £- (apportioned between the said patents as in deposit. the said Schedule mentioned) part of the said purchase-money the receipt whereof is hereby acknowledged. NOW IT IS HEREBY AGREED as follows: Payment of 1. The vendor shall at his own expense forthwith commence or Vendor to continue and with all due speed take and prosecute the necessary continue steps and proceedings for obtaining the said several patents. proceedings. moneys pay 2. The balance of the purchase-money for any patent shall be Balance of payable by instalments in the amounts and at the times respectively purchasein the Schedule hereto mentioned and any instalment not paid at or able in in before the time appointed for payment shall thenceforth bear stalments, as interest at the rate of per cent. per annum until actual per Schedule. payment thereof. 3. The purchaser may at any time not later than weeks Retirement before the time fixed in the Schedule for the completion of the by purchaser purchase of any patent retire therefrom by then serving the vendor chase on re (a) Except (if time admits) as to countries which are members of the International Union (ante, p. 36), a provisional, not a complete, specification should only be furnished, because publication first takes place on the acceptance of the complete specification (sect. 10 of the Act of 1883, Appendix, post, p. 310), which would be a bar in many colonies and foreign countries to the obtaining patents there. See the Articles of the International Convention, in the Appendix, post, p. 365. (b) An entire contract cannot be apportioned (see ante, p. 46). The contracts are here to be supposed to be verbal ones, as, if in writing, they should either be fully recited here or be sufficient without the necessity of this agreement. from any pur PREC. VI. linquishment of moneys paid, &c. Purchases completed at times and places as per Schedule. If vendor purchaser may claim return of moneys and interest. Or, with with a written notice for that purpose whereby also the purchaser shall offer to relinquish all claim to any moneys paid by him in respect of the said purchase and also to pay on demand any moneys then already due in the like respect and remaining unpaid. 4. The purchase of each patent shall be completed at the time and place in respect thereof mentioned in the Schedule (c). 5. If the vendor shall unreasonably make delay in or discontinue the proceedings in respect of his application for any patent and shall for more than days after he shall have been requested discontinue, in writing by the purchaser to continue the same omit so to do the purchaser may at any time thereafter before the vendor shall (if at all) continue such proceedings either retire from the purchase of that patent and shall then accordingly be entitled to a return of all moneys (if any) paid by him in respect of such purchase together with interest thereon respectively (as for money lent) at the rate of per cent. per annum from the times of payment until the repayment thereof respectively or if time will so admit may at the expense of the vendor and by means of a power of attorney or other (if any) necessary powers given by him (who shall accordingly confer the same) himself continue or cause to be continued the said application and all proceedings consequent thereon until the said patent shall be granted and vested in the purchaser and all moneys (if any) paid by the purchaser in the due and proper exercise of any such powers shall be repaid by the vendor on demand together with interest thereon respectively at the rate last aforesaid from the time of payment until the repayment thereof respectively notwithstanding that from any cause not attributable to the purchaser the patent shall not finally be obtained. necessary powers, himself continue proceedings. Expenses of purchaser repaid with interest. If any patent unobtained through defect in title, moneys re turned with out interest, &c. Service of notices. 6. If through any cause attributable to the state of the title to the invention in any country aforesaid the patent in respect thereof cannot be obtained the purchaser shall be entitled on demand to a return of all moneys paid by him for the purchase of such patent but without any interest thereon or (subject as in the last clause provided) any claim for damages or compensation on account of the failure to obtain the patent. 7. [For a clause as to service of notices, use Sp. Cl. 51, post, p. 242.7 IN WITNESS, &c. (d). THE SCHEDUle. (c) This can, of course, only be finally effected in each country itself, and according to the laws thereof. (d) As to the specific performance of agreements to sell patents, see ante, pp. 42, 43. VII. AGREEMENT for SALE of Patents to a TRUSTEE for a LIMITED PREC. VII. JOINT STOCK COMPANY (in course of formation)—Purchase money in Cash and Shares (a). patent and AN AGREEMENT made &c. BETWEEN A. B. of &c. (hereinafter called "the vendor") of the one part and C. D. of &c. as trustee for the company (hereinafter mentioned and called "the Recitals. company") now in course of formation of the other part: WHEREAS Vendor enthe vendor is entitled under an assignment dated &c. and made &c. titled by to the invention and patent in respect thereof mentioned in the assignment to patent. Schedule hereto :AND WHEREAS the vendor has agreed with the said C. D. as such trustee for the sale to the company at the price sell to com- & Agreement to 5, of £ of the said patent and all extensions thereof and the pany for exclusive benefit of all improvements in or additions to the said - - the invention or any new discovery relating to the manufacture of an equal innow (if at all) in the knowledge and possession of or which terest in any hereafter may be made by him (6) ÅND WHEREAS the company is improveabout to be formed under the Companies Acts 1862 to 1886 with the name of The Company to Company Limited having the object be formed to (amongst others) of acquiring the said patent: AND WHEREAS the purchase memorandum and articles of association of the company have with patent. the privity of the vendor been already prepared: AND WHEREAS and articles the nominal capital of the company is provided to be £divided into 15,000 shares of £- each (c). NOW IT IS pared. HEREBY AGREED as follows: ments. Memorandum already pre Capital and 1. The vendor shall sell and the company shall purchase at the shares. (a) This precedent is intended to answer the double purpose of an ordinary agreement for sale to an individual of a patent already obtained, and of dealing with the case of an inchoate company as the purchaser. For more elaborate or other forms of purchases by companies, see Mr. F. B. Palmer's work on Company Precedents (3rd ed.), 1884. (b) As to improvements, &c., see ante, pp. 33, 34. (c) See Palmer's Company Precedents (pp. 1-6) as to the three different kinds of contracts for the purchase of property by a company formed for the purpose. The above agreement is according to the first plan, and involves the adoption of it by the company when formed. This will be done by an agreement between the vendor, the trustee, and the company (see Forms 12 and 13 in Palmer, pp. 30, 31), which is intended for indorsement on the original contract, with or without modifications thereof. The two other kinds of contracts are expressed to be made with the company itself, and not a trustee. The memorandum usually states it to be one of the objects of the company to acquire the property in question, and the articles generally contain a clause empowering the directors to put the seal of the company to the contract as Sale for £ PREC. VII. price of £- -the invention and patent mentioned in the Schedule hereto and the sole and exclusive benefit of the said patent and all extensions thereof (d) and the like benefit of all improvements additions or new discoveries aforesaid. Purchasemoney in cash and shares. Day fixed for completion and interest payable if purchase not then completed. Improve ments, &c. to be assigned, instruction given, &c. 2. The said purchase-money of £———————— shall be satisfied by the payment of £ in cash and the allotment to the vendor or his nominees of shares in the company numbered both inclusive which shall be deemed for all purposes to be fully paid up (e). next at No. to the said patent shall be completed on the &c. the offices of Messieurs E. F. & Co. the solicitors of the vendor or if from any cause the same shall not be then completed the company shall interest on the said sum of £ at the rate of cent. per annum from that day until the completion thereof. pay per 4. The vendor shall from time to time after making any improvement in or addition to the said invention &c. [Form 16, ante, p. 52 (f).] 5. The adoption of this agreement by the company shall operate When agree to discharge the said C. D. from all liability in respect thereof (g). ment adopted by company, C. D. to be discharged from liability. drawn, with or without modifications. Such a clause does not, however, bind the directors, or release them from the obligation of ensuring that the contract is for the company's benefit (Palmer, p. 2). A company cannot ratify a contract made on its behalf as above, although by acting on it it might become bound on equitable principles (Empress Engineering Co., L. R. 16 Ch. D. 125; and Pritchard's Case, In re Tavarone Mining Co., L. R. 8 Ch. 960). (d) See sect. 25 of the new act, and p. 19, ante, as to extensions. An assign can petition, as the term "patentee" means "the person for the time being entitled to the benefit of a patent" (sect. 46). (e) By sect. 25 of the Companies Act, 1867 (30 & 31 Vict. c. 131), every share in any company shall be deemed to have been issued, and to be held, subject to the payment of the whole amount thereof in cash, unless the same shall have been otherwise determined by a contract duly made in writing, and filed with the registrar of joint stock companies, at or before the issue of such shares. A special short agreement, so far as relates to the issue of shares as fully paid up, is sometimes filed for this purpose, instead of the contract. Such a proceeding avoids the disclosure to the public of all the transactions mentioned in the contract. See introductory notes to Palmer's Company Precedents. As to the object and effect of the section, see notes thereto in Buckley on Companies, p. 492 (4th ed.), 1883. (f) See pp. 33, 34, ante, as to improvements, &c. A clause might follow the above one as to the vendor not engaging in the manufacture or sale of similar articles. See Form 17, ante, p. 53. (g) The liability of C. D. so far, until the company adopts the agreements, is to pay for the patents himself at the total fixed price in cash. See Kelner v. Baxter (L. R. 2 C. P. 174), which was a case of an open contract by persons on behalf of an unformed company to buy goods for cash. The company was formed, and the goods handed over and consumed in its business, but they were not paid for. The company collapsed without making the payment, and it was held that no ratification by the company could relieve the persons from liability without the assent of the vendors. See, also, Scott v. Lord Ebury (L. R. 2 C. P. 255), where, in the case of an advance being made to promoters of a company to be repaid out of the calls on shares, it was held that on the collapse of the company without payment, and notwithstanding its adoption of the contract, the promoters were personally liable. Clause 5, above, is therefore essential to the discharge of C. D. Further, the next two next shares at 6. Either party hereto may in writing rescind this agreement PREC. VII. unless before the day of Rescission by least of the company shall have been duly subscribed for and either party per share at least paid by the subscribers thereon. £ the if minimum shares not 7. If this agreement shall not be adopted by the company before number of next (h) either party may by writing re- subscribed day of scind the same. within certain time. also, if agree 8. This or some other agreement binding the company to allot the said shares to the vendor shall before the allotment thereof be Rescission filed by the company with the Registrar of Joint Stock panies (i). IN WITNESS, &c. (j). THE SCHEDule. Com- ment not clauses provide for rescission by either party. It seems impossible, however, to contend that C. D. would be liable at all under the above form of agreement as it stands, except in the case of his refusal to assent to the assignment to the company. This exception will apparently prevent the above agreement from being treated as a contract in which one of the parties shall not be personally liable. Such a stipulation, if expressed at least in the contract, would be void, as being repugnant to the nature of a contract. See Palmer (Introductory Notes) on the subject generally, and the cases of Furnivall v. Coombes (5 Manning & Gr. 736), and Williams v. Hathaway (L. R. 6 Ch. D. 544), therein cited as to such a stipulation being void. (h) Some day prior to the day of completion fixed by Clause 3. (i) See note (e), ante. (j) For a clause as to service of notices, see Clause 19 of Licence X., post, p. 282, and Sp. Cl. 51, post, p. 242. adopted by company by certain date. Agreement to be filed before issue of shares. G M. |