Supply agreement template

This a supply agreement template sample that you can use free of charge. You can copy and paste it into Microsoft Word or Google Docs and edit as you like.

Supply Agreement

This Supply Agreement (the "Contract") is entered into on _________________________ [Date] by and between:

Supplier: _________________________ [Supplier or Company Name] located at _________________________ [Supplier Address] (the "Supplier").
Purchaser: _________________________ [Purchaser or Company Name] located at _________________________ [Purchaser Address] (the "Purchaser").

1. Scope of Supply

The Supplier agrees to supply goods and materials to the Purchaser as outlined below:

1. Product Description

The Supplier shall provide the following goods/products to the Purchaser:

_________________________ [Product Name and Description]
_________________________ [Product Specifications]
_________________________ [Quantity or Volume]
_________________________ [Packaging and Labeling Requirements]

2. Delivery Terms

The goods shall be delivered to _________________________ [Delivery Address] according to the following schedule: _________________________ [Delivery Dates or Frequency].
The Supplier shall ensure that the goods are properly packaged and comply with all applicable safety and quality standards.
Risk of loss and title shall pass to the Purchaser upon _________________________ [Delivery or Acceptance].

3. Product Standards

The Supplier warrants that all products supplied under this Contract shall meet the following standards:

_________________________ [Quality or Safety Standards]
_________________________ [Compliance with local or international regulations]
_________________________ [Shelf Life, Storage, or Expiry Requirements]

2. Terms of Contract

This Contract shall commence on _________________________ [Start Date] and shall remain in effect for an initial term of _________________________ [Number] months/years unless terminated earlier in accordance with this Contract.
Upon expiration, the Contract may automatically renew for successive terms of _________________________ [Number] months/years, unless either party gives written notice of non-renewal at least _________________________ [Number] days before the end of the current term.

3. Pricing and Payment Terms

The Purchaser agrees to pay the Supplier a total sum of $_________________________ [Amount] per _________________________ [Unit/Order/Month] for the goods supplied.
Payment shall be made via _________________________ [Payment Method] within _________________________ [Number] days of receipt of invoice.
Late payments shall incur a penalty of _________________________ [Late Fee or Interest Rate] per _________________________ [Week/Month].
All prices are exclusive of applicable taxes, duties, or shipping fees unless otherwise stated.

4. Inspection and Acceptance

The Purchaser shall inspect all goods upon delivery and notify the Supplier of any defects, shortages, or nonconformities within _________________________ [Number] days.
If goods are found defective or noncompliant, the Supplier shall, at its expense, replace or repair the goods within a reasonable period.

5. Termination

Either party may terminate this Contract by providing _________________________ [Number] days’ written notice to the other party.
The Purchaser may terminate the Contract immediately if the Supplier fails to deliver goods that meet the agreed specifications or delivery schedule.
Upon termination, all outstanding payments for goods delivered prior to termination shall become immediately due.

6. Force Majeure

Neither party shall be liable for any delay or failure to perform their obligations under this Contract due to causes beyond their reasonable control, including but not limited to acts of God, war, government regulations, strikes, natural disasters, or transportation disruptions.

7. Confidentiality

Both parties agree to keep confidential all business, technical, and financial information obtained during the term of this Contract and not disclose it to any third party without prior written consent.

8. Governing Law and Jurisdiction

This Contract shall be governed by and construed in accordance with the laws of _________________________ [Your State or Country]. Any disputes arising out of or relating to this Contract shall be resolved exclusively in the courts of _________________________ [Your State or County].

9. Entire Agreement

This Contract constitutes the entire agreement between the Supplier and the Purchaser and supersedes all prior understandings, negotiations, and agreements, whether oral or written.

IN WITNESS WHEREOF, the parties have executed this Supply Agreement as of the date first written above.

Supplier
Signature: _________________________ [Signature]
Name and Title: _________________________ [Name and Title]
Date: _________________________ [Date]

Purchaser
Signature: _________________________ [Signature]
Name and Title: _________________________ [Name and Title]
Date: _________________________ [Date]

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What's a Supply Agreement?

A supply agreement is a legally binding contract between a supplier and a buyer that outlines the terms and conditions under which goods or materials will be provided. This agreement is crucial for ensuring a consistent supply of products, establishing clear expectations, and protecting both parties from misunderstandings or disputes. In this article, we'll explore the essential elements of a supply agreement, its importance, and best practices for drafting one.

1. Definition and Scope

A supply agreement defines the nature and scope of the goods or materials being supplied. It specifies product descriptions, quantities, quality standards, packaging requirements, and delivery schedules. The scope ensures both parties understand what is being supplied and under what conditions.

2. Parties Involved

The contract clearly identifies the two main parties — the supplier (the entity providing the goods) and the buyer (the entity purchasing them). It includes the legal names, contact details, and addresses of both parties, as well as any relevant business registration or tax identification numbers.

3. Terms and Conditions

The terms and conditions section establishes the commercial and legal framework of the relationship. It includes pricing, payment terms, delivery methods, lead times, and penalties for delays or non-performance. Additionally, it may address minimum order requirements, currency of payment, and conditions for price adjustments.

4. Duration and Renewal

A supply agreement specifies the duration of the contract — whether it’s a one-time purchase, a fixed-term agreement, or an ongoing supply relationship. It often includes renewal clauses, notice periods for termination, and procedures for contract amendments or renegotiations.

5. Quality Control and Inspection

To ensure product consistency, the agreement should include provisions for quality control and inspection. This may cover testing procedures, product certifications, inspection rights, and remedies if goods fail to meet agreed-upon standards.

6. Risk, Liability, and Warranties

Supply agreements clarify when the risk of loss or damage transfers from supplier to buyer — typically upon delivery or acceptance. It also details each party’s liability in case of defective goods, delays, or non-compliance. Warranties regarding product quality, conformity, and fitness for purpose are often included to protect the buyer.

7. Legal Compliance

Both parties must comply with relevant laws and regulations, such as import/export laws, environmental standards, safety regulations, and ethical sourcing requirements. The agreement may also require the supplier to maintain certain certifications or comply with specific industry standards.

8. Confidentiality and Intellectual Property

If the supply involves proprietary products, designs, or trade secrets, confidentiality and intellectual property clauses protect sensitive information. These provisions ensure that neither party discloses or misuses confidential data obtained during the business relationship.

9. Dispute Resolution

The contract should outline procedures for resolving disputes, including preferred methods such as mediation, arbitration, or litigation. It may also specify governing law and jurisdiction to avoid ambiguity in case of legal conflict.

Conclusion

A supply agreement forms the foundation of a stable and transparent business relationship between suppliers and buyers. By clearly defining the scope of supply, pricing, responsibilities, and legal protections, it minimizes risk and ensures smooth operations. Whether you’re a manufacturer, distributor, or retailer, understanding the key components of a supply agreement is essential to maintaining consistency, trust, and profitability in your supply chain.