A supplier agreement is a legal company contract with your suppliers, defining the terms of the relationship including the rights and obligations of all parties.
A supplier agreement governs the procurement of materials, products or services by your company from a third party for a pre-negotiated price and to be supplied in a certain timeframe.
The following points should be included in a supplier agreement:
In addition, there are the following types of supplier agreement:
This is a standard agreement used for procuring goods or services from a supplier. It typically includes terms related to pricing, quantity, delivery schedules, quality standards, payment terms, and dispute resolution.
Master Supply Agreement (MSA)
An MSA establishes the overall terms and conditions that will govern future transactions between the parties. It covers aspects such as pricing, order placement, product specifications, warranties, intellectual property rights, confidentiality, termination, and other important provisions.
Service Level Agreement (SLA)
SLAs are commonly used when engaging suppliers for services rather than physical goods. They outline the specific services to be provided, performance metrics, response times, availability, penalties for non-compliance, and other key performance indicators.
A distribution agreement is used when a supplier grants another company the right to distribute its products in a particular region or market. It defines the roles and responsibilities of both parties, exclusivity or non-exclusivity of distribution rights, sales targets, marketing support, termination clauses, and more.
In cases where a company outsources its manufacturing to a supplier, a manufacturing agreement is employed. It covers details such as product specifications, production processes, quality control, pricing, delivery schedules, intellectual property rights, and confidentiality.
When a company outsources a specific business function or process to a supplier, an outsourcing agreement is used. It outlines the scope of work, performance expectations, pricing, service levels, confidentiality, liability, transition planning, and termination clauses.
Non-Disclosure Agreement (NDA)
An NDA is a confidentiality agreement used to protect sensitive information that may be shared between the parties during the course of their business relationship. It ensures that the supplier keeps confidential information confidential and refrains from disclosing it to unauthorized parties.
A framework agreement provides a general framework for future agreements between the parties. It establishes the terms and conditions that will govern subsequent specific agreements, such as pricing, terms of delivery, quality standards, and dispute resolution mechanisms.
Having an up-to-date and comprehensive collection of all supplier agreements enables your company to:
Keep track of the performance of your suppliers against their obligations/li>