Create Inter-Company Contracts

Inter-company contracts are a pair of contracts (one sales contract and one purchase contact) that have a contract link between their contract products. The contract link is in the sales contract (which is also known as the 'source' contract).

The two contracts in MineMarket are two views of a single contractual agreement, but each has a different district for accounting purposes. For example, selecting Seller A, Seller District A, Buyer B and Buyer District B creates a sales contract where journals are created for Seller District A and a purchase contract with journals for Buyer District B.

Simple scenario

For example, this activity can be used to create the following pair of inter-company contracts:

Sales Contract 1 with Company A selling to Company B. (MineMarket also creates the Purchase Contract 2 of Company B buying from Company A. The sales contract has a contract link to Purchase Contract 2.)

Assuming the contract link configuration has Create Linked DO As Child (which is the default and recommended configuration), this means that the despatch orders should be created in the sales contract of the pair of inter-company contracts.

Advanced scenarios

This activity can also be used to create a purchase contract with an external organisation. This purchase contract is a single contract and includes a contract link to the sales contract of the pair of inter-company contracts. The buyer of the purchase contract is the seller of the pair of inter-company contracts. The despatch orders are created in the external purchase contract, and MineMarket creates linked despatch orders in each of the linked contracts.

This activity can also be used to create multiple pairs of inter-company contracts. The buyer of the first pair is the seller of the next pair. The purchase contract of the first pair includes a contract link to the sales contract of the next pair.

For example, this activity can be used to create the following contracts at the same time:

Purchase Contract 1 with Organisation A selling to Company B. This contract has a contract link to Sales Contract 2.
Sales Contract 2 with Company B selling to Company C. (MineMarket also creates the Purchase Contract 3 of Company C buying from Company B. The sales contract has a contract link to Purchase Contract 3. The purchase contract has a contract link to Sales Contract 4.)
Sales Contract 4 with Company C selling to Company D. (MineMarket also creates the Purchase Contract 5 of Company D buying from Company C. The sales contract has a contract link to Purchase Contract 5.)

Editing of contracts after creation

The contracts can be created using a contract template, which enables contract terms to be pre-configured. The contracts can be edited after the contracts have been created. See Sales and Purchase Contracts for more information about editing contracts.

The contract links are created with default options, except for being able to select the Apply Contract Term Override setting. This configuration of the contract link can be edited after the contracts have been created. See how to set up a contract link for information about contract link configuration.

Security Note: You need the Allow contract maintenance security right in the Contracts domain security rights group for this activity.

Activity Steps

Open the Contract Explorer.
Note: Inter-company contracts can also be created via the Contracts tab of the Organisation, Company or District, or via the Organisations panel of the Solution Explorer.
Right-click in the Contracts table and select New » Inter-Company Contracts from the menu.
The Inter-Company Contract Creation screen displays.
If the inter-company contracts are created from the Organisation, Company or District, applicable fields are preselected and read-only.
Complete the following fields as required.
- Contract Category—Select from the Contract Category list items defined in the List Editor. The Contract Category text list items can be used to limit access to contracts through domain security. See Domains.
- Start Date—The start and end dates are only an indication of when the specified rules of the contracts apply. There is no validation on the date period. Default: The first day of the current month.
- End Date
- Contract Template—Contract template from which to create the sales and purchase contracts. Select from the contract templates defined on the Organisations panel of the Solution Explorer.
- Product—Product or brand for which to create a contract product for the sales and purchase contracts. Select from the products and brands defined on the Material panel of the Solution Explorer. If a contract template is selected, only products applicable to the contract template display.
To select a set of mark-to-market terms:
1. Click the ellipsis (...) next to Mark To Market.
  The Mark To Market Search displays.
2. Enter the following search criteria as required.
  - Delivery Terms—Select from the delivery terms defined in the Delivery Term Editor.
  - Locations—Select from the despatch locations defined on the Supply Chain panel of the Solution Explorer. Despatch locations are rail sidings, truck despatch locations, barge terminals and port locations.
  - Material Type—Select from the material types defined on the Material panel of the Solution Explorer.
  - Products—Select from the products and brands defined on the Material panel of the Solution Explorer. If a material type is selected, only products and brands with that material type display.
3. To include a text string in the search criteria, enter the Search Text. Search By is Mark To Market. Text searches are case-sensitive with SQL databases with a case-sensitive collation and with all Oracle databases.
4. Click Search or press F3.
  Only sets of mark-to-market terms that match the search criteria and the contract pricing basis, and that are applicable to the default contractual source and destination locations, display in the Mark To Market table. The contract pricing basis and default contractual source and destination locations can be specified in the contract template.
5. Check Selected for the required set of mark-to-market terms.
6. Click OK.
To create an external purchase contract that will link to a pair of inter-company contracts:
1. Select an organisation as the Seller of the purchase contract. Select from the organisations defined on the Organisations panel of the Solution Explorer.
2. Select the Buyer from the companies defined on the Organisations panel of the Solution Explorer.
3. Select the Buyer District. Select from the districts defined on the Organisations panel of the Solution Explorer. Only districts of the selected buyer display.
4. Select whether to Apply Contract Term Override. Whether to override the contract terms of the linked contract. If checked, no set of contract terms is created in the linked contract. The despatch order snapshot and the invoice line items for the linked despatch order (LDO) are calculated using the same contract terms as the source despatch order. The contract link configuration has the Invoice Types preselected that match the contractual invoice types of the selected contract template. If no contract template is selected, Invoice Types is Provisional and Final. If unchecked, both contracts have a set of contract terms. The despatch order snapshot and the invoice line items for the LDO are calculated using the contract terms of the linked contract. No invoice types are preselected in the contract link configuration.
Create a pair of inter-company contracts:
1. Right-click in the table and select New from the menu.
2. If there is no prior contract:
  1. Select a company as the Seller.
  2. Select the Seller District applicable to the sales contract. Only districts of the selected seller display.
3. Select the Buyer and Buyer District.
4. Select whether to Apply Contract Term Override.
Create additional linked pairs of inter-company contracts as required.
Click OK.
The Sales Contract and Purchase Contract display.
Click Save.
Note: If the Sales Contract status definition exists, the sales contract is assigned the initial status. If the Purchase Contract status definition exists, the purchase contract is assigned the initial status. These status definitions control whether the contracts are editable and selectable. See Status Definitions.