What is a back to back contract ? What does back to back contract mean

Back-to-back refers to a buyout contract.

As an intermediary, you don't want your buyer and seller to know each other, so you make a purchase contract and a sales contract, and you find someone to be responsible for the transportation.

"Back-to-back contract" refers to the intermediary relationship, where the intermediary and the principal and the third party each sign a contract, but the third party and the principal cannot meet, and the intermediary is bound by these two contracts, which is the so-called back-to-back contract.

Back-to-back contracts are a contract between A and B, and a contract between B and C, but the subject matter of the contract is the same item. A and C don't meet each other, it's back to back. For example, chartering a boat.

B is a charterer relative to the shipowner C; And in contrast to the real charterer, A, they are the owners of the ship. I am both a shipowner and a charterer. But in reality, they claim to be charter brokers.

This back-to-back contract does not appear to be risk-free on the surface: except for the freight, the terms are the same, and if a dispute arises and a claim arises, he can receive compensation from the other party. But in reality, they are much more risky than the average charter broker. ：

Now, they are not real brokers anymore.

Traditionally, a back-to-back contract means that A signs a contract with B, B then transfers the contract content of A to C, and B and C generally sign a back-to-back contract.

Literally, it is A who does not meet with C, or who does not know that C is executing the contract on behalf of B. But that's not just the meaning anymore.

It means that the responsibilities and obligations to be performed by B to A are transferred to C, and at least the terms of the contract in terms of technical requirements, delivery methods, payment methods, punishment methods, etc., are borne by C on an equal footing. It's a back-to-back contract between B and C for A and B contracts. B generally only closes the difference in the middle, and the risks and obligations are transferred to C.

Legal analysis: Back-to-back contract refers to the intermediary relationship, the intermediary and the principal and the third party each sign a contract, but the third party and the client cannot meet, and the intermediary is bound by these two contracts.

Legal basis: Article 961 of the Civil Code An intermediary contract is a contract in which the intermediary reports to the client the opportunity to conclude a contract or provides intermediary services for the conclusion of a contract, and the client pays remuneration.

Article 962 of the Civil Code: An intermediary shall truthfully report to the client on matters related to the conclusion of a contract.

Where an intermediary deliberately conceals important facts related to the conclusion of a contract or provides false information, harming the interests of the client, it must not request payment of remuneration and shall bear the liability for compensation.

Article 963 of the Civil Code: Where an intermediary facilitates the conclusion of a contract, the client shall pay remuneration in accordance with the agreement. Where there is no agreement on the remuneration of the intermediary or the agreement is not clear, and it cannot be determined in accordance with the provisions of Article 510 of this Law, it shall be reasonably determined on the basis of the intermediary's labor services. Where the conclusion of a contract is facilitated by the intermediary providing intermediary services for the conclusion of the contract, the parties to the contract shall bear the intermediary's remuneration equally.

If the intermediary facilitates the conclusion of the contract, the intermediary shall bear the costs of the intermediary activities.

Legal analysis: In the intermediary relationship, the intermediary and the client and the third party are each signed a contract, but the third party and the client cannot meet, and the intermediary is bound by these two contracts.

Legal basis: Civil Code of the People's Republic of China

Article 465:Contracts established in accordance with law are protected by law. A contract established in accordance with law shall only be legally binding on the parties, unless otherwise provided by law.

Article 469:The parties may conclude a contract in written, oral or other forms. The written form is a form in which the contents of the contract, letter, telegram, telex, fax, etc. can be tangibly expressed. Data messages that can be tangibly represented in electronic data interchange, e-mail, etc., and that can be accessed at any time shall be deemed to be in writing.

Legal analysis: Back-to-back agreement refers to the occurrence of an intermediary relationship, in which the intermediary and the principal and the third party each sign a contract, simply put, the principal and the third party cannot meet, and the intermediary is bound by both contracts.

Legal basis: "The Civil Code of the People's Republic of China".

Article 961: An intermediary contract is a contract in which the intermediary reports to the client that the chain of opportunity to conclude the contract is slipping or provides the medium to conclude the contract, and the client pays remuneration.

Legal analysis: back-to-back convergence means that the real parties to the contract cannot meet, and the contract is signed between the intermediary seller and the principal and the third party in pairs to maintain the real contract, and the intermediary is bound by the two contracts signed between the principal and the third party. Back-to-back contracts usually occur in an intermediary relationship, where the intermediary and the principal and the third party each sign a contract, and the principal and the third person cannot meet each other.

Legal basis: Article 558 of the Civil Code of the People's Republic of China After the termination of creditor's rights and debts, the parties shall follow the principles of good faith and perform obligations such as notification, assistance, confidentiality, and old goods in accordance with transaction customs.

Summary. In practice, the intermediary signs a procurement contract with the actual user and the actual businessman respectively.

In practice, the intermediary signs a procurement contract with the actual user and the actual merchant, and when the actual user issues a non-transferable L/C to the intermediary, the intermediary cannot directly transfer the L/C, but can require the bank with which it has dealings to take the L/C as a guarantee and issue a L/C with the actual merchant as the beneficiary.

The opening of a back-to-back letter of credit is not the intention of the original letter of credit applicant and the issuing bank. Back-to-back letters of credit and original letters of credit are two independent letters of credit that coexist at the same time. The secondary beneficiary of a back-to-back letter of credit cannot obtain a payment guarantee from the original issuing bank, but can only obtain a payment guarantee from the back-to-back issuing bank.

What is called back-to-back contracts.

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Back-to-back contracts usually appear in an intermediary relationship, where the intermediary and the client and the third brother group each sign a contract, and the client and the third party cannot meet each other, and the intermediary is bound by these two contracts at the same time, which is a back-to-back contract.

In practice, the intermediary signs a procurement contract with the actual user and the actual businessman respectively. In practice, the intermediary signs a procurement contract with the actual user and the actual businessman, and when the actual user issues a non-transferable letter of credit to the middleman, the middleman cannot directly transfer the letter of credit, but can require the bank with which it has dealings to take the letter of credit as a guarantee, and issue a letter of credit with the actual merchant as the beneficiary. Back-to-back letters of credit refer to the fact that the opening of a letter of credit is not the intention of the original letter of credit applicant and the issuing bank.

Back-to-back letters of credit and original letters of credit are two independent letters of credit that coexist at the same time. The secondary beneficiary of a back-to-back letter of credit cannot obtain a payment guarantee from the original issuing bank, but can only obtain a payment guarantee from the back-to-back issuing bank.