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Product Supply Agreement

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1. Definitions

1.1 As used in the Agreement, the following words have the following meanings when written with a capital first letter:

“Agreement” means this Product Supply Agreement, including Appendix A, as may be amended from time to time in accordance with Clause 13.1 hereof.

“Party” or “Parties” means the Seller or the Buyer, individually, or the Seller and the Buyer, collectively.

“Product” means [product] to be sold by the Seller and purchased by the Buyer hereunder, as specified in Appendix A hereto.

2. Scope of agreement

2.1 The Seller hereby agrees to sell and deliver, and the Buyer hereby agrees to purchase and take delivery of, the Product, on and subject to the terms and conditions hereof.

2.2 No terms and conditions in a Party’s documents which are in addition to or conflict with the Agreement shall be binding, unless agreed to in writing by the Parties.

2.3 The Buyer shall not be obliged to purchase any minimum quantity of the Product from the Seller or to purchase any or all of its requirements for the Product from the Seller.

3. Product changes

3.1 The Seller shall notify the Buyer of any decision to change or discontinue the manufacture of the Product in writing no later than [number] days before implementation. Following such notification, the Buyer shall have, as its sole and exclusive remedies, the right to: (i) Cancel any undelivered purchase orders for the Product without liability to the Seller, or (ii) Submit purchase orders for a last buy quantity of the Product.

4. Purchase orders and forecasts

4.1 All purchases of the Product shall be made by written purchase orders submitted by the Buyer to the Seller. A purchase order shall be binding on the Seller only upon the Seller’s submission of a written confirmation of the purchase order to the Buyer. The Seller shall confirm or reject a purchase order within [number] days of receipt, failing which the purchase order shall be deemed to have been confirmed by the Seller.

4.2 All purchase orders for the Product shall contain the following minimum information: (i) A reference to the Agreement, (ii) date of purchase order, (iii) purchase order number, (iv) item number, (v) quantity, (vi) price, (vii) delivery address, and (viii) delivery date.

4.3 By the [number] day of each month, the Buyer shall submit to the Seller a written forecast of the Buyer’s anticipated requirements for the Product for the following [number]-month period. The forecast shall not be binding on the Parties and shall be used for planning purposes only.

5. Delivery

5.1 The Seller shall deliver the Product to the Buyer within a lead time of [number] days from receipt of the Buyer’s purchase order.

5.2 The Product shall be delivered [delivery term] in accordance with Incoterms as published by the International Chamber of Commerce from time to time. Risk of loss of or damage to the Products shall pass to the Buyer upon delivery in accordance with the agreed delivery term.

5.3 The Product shall be packed in a manner which is in line with the packing requirements set out in Appendix A hereto and which is adequate to minimize damage during transport.

6. Price and payment

6.1 The price of the Product shall be [amount and currency] per unit exclusive of value added or similar taxes.

6.2 The Seller shall submit invoices for the Product to the Buyer upon shipment. All correctly rendered invoices shall be paid by the Buyer within [number] days of receipt of invoice.

6.3 If the Buyer fails to pay a correctly rendered invoice by the due date for payment, the Seller may charge interest on the amount outstanding from the due date until payment is made at the rate of [number] % per annum.

7. Product warranty

7.1 The Seller warrants that for a period of [number] months from the date of delivery (“Warranty Period”) the Product will be free from material defects in design, materials and workmanship and will substantially conform to the specifications set out in Appendix A hereto.

7.2 The Seller shall, at its option and expense, repair or replace any defective Product or part(s) within a reasonable time, provided always that the Buyer notifies the Seller of such warranty claim in writing without undue delay and within the Warranty Period.

7.3 Upon the Seller’s request, the Buyer shall, at its risk and expense, return any defective Product or part(s) to the Seller in accordance with the Seller’s return instructions. Upon completion of repairs or replacements, any returned defective Product or part(s) shall become the property of the Seller.

7.4 All repairs and replacements made under the warranty of this Clause 7 are warranted for [number]

days from the date of repair or replacement or for the remainder of the Warranty Period of the original Product, whichever is longer.

7.5 The warranty of this Clause 7 excludes defects resulting from: (i) normal wear, tear or deterioration, (ii) accident, corrosion or other external cause, (iii) improper storage, installation, service, maintenance or use, and (iv) repairs or modifications not authorised by the Seller.

7.6 The warranty of this Clause 7 excludes all other warranties, whether express, implied, statutory or otherwise. The Buyer’s sole and exclusive remedies for defects in the Product shall be as set out in this Clause 7.

8. Product liability

8.1 The Seller shall be liable for any death, personal injury and damage to property caused by the Product in accordance with applicable law.

8.2 For the term of the Agreement and for [number] years thereafter, the Seller shall maintain adequate product liability insurance with a minimum cover of [amount and currency] per incident.

9. Patent infringement

9.1 If the Buyer receives a claim or otherwise becomes aware that the Product or any part thereof infringes a third-party patent or other proprietary right, the Buyer shall notify the Seller immediately in writing.

9.2 The Seller shall, at its expense, be entitled to participate in the defence of any claim against the Buyer that the Product or any part thereof infringes a third-party patent or other proprietary right (“Claim”).

9.3 The Seller shall indemnify the Buyer against any and all expenses and damages resulting from any Claim if a final judgment is rendered against the Buyer. The Seller shall pay the cost of any settlement only, if a Claim is settled with the consent of the Seller.

9.4 If the Buyer’s or the Buyer’s customers’ use of the Product is enjoined, the Seller shall, at its option and expense: (i) replace the infringing Product or part(s) with a suitable substitute free of any infringement, (ii) modify the infringing Product or part(s) so that it or they will be free of any infringement, (iii) procure for the Buyer and its customers a right to use the infringing Product, or (iv) recall the infringing Product and refund to the Buyer any amounts paid to the Seller in respect thereof less a reasonable deduction for any actual period of use.

9.5 The Seller’s liability with respect to any Claim shall be limited to the specific undertakings in this Clause 9. The Buyer’s sole and exclusive remedies with respect to any Claim shall be as set out in this Clause 9.

10. Confidentiality

10.1 A Party shall keep all information obtained from the other Party in connection with the performance of the Agreement strictly confidential and shall not disclose such information to any third party or use it for any purpose other than the performance of the Agreement without the other Party’s prior written consent.

10.2 The restrictions in Clause 10.1 hereof shall not apply to any information generally available to the public, obtained by a Party in good faith from a third party, independently developed by a Party without use of the other Party’s information or required to be disclosed by law.

11. Limitation of liability

11.1 A Party shall not be responsible for any failure to fulfil any term or condition of the Agreement due to an event outside its reasonable control (force majeure). If such event continues for [number] days or more, the non-affected Party may terminate the Agreement by written notice and without liability to the affected Party.

11.2 Notwithstanding any stipulations to the contrary herein, the Seller’s aggregate liability to the Buyer hereunder shall not exceed [amount and currency]. In no event shall the Seller be liable for any consequential, incidental, special, punitive or exemplary loss, including, but not limited to, loss of profit, loss of revenue, loss of business, loss of goodwill, loss of anticipated savings or cost of procuring substitute goods or services.

12. Term

12.1 The Agreement shall commence when signed by both Parties and shall continue until terminated under Clause 12.2 or 12.3 hereof.

12.2 Either Party may terminate the Agreement at any time for any reason subject to [number] days’ written notice to the other Party.

12.3 Either Party may terminate the Agreement by written notice to the other Party, effective immediately, if the other Party fails to remedy any material breach of the Agreement within [number] days of receiving written notice of such breach.

13. Miscellaneous

13.1 The Agreement contains the entire understanding of the Parties with respect to the subject matter hereof. The Agreement may not be amended except by written agreement signed by both Parties.

13.2 Any disputes arising out of or in connection with the Agreement which cannot be settled amicably by the Parties shall be resolved by a court of competent jurisdiction in accordance with the laws of [country] excluding conflict of law principles.

13.3 The provisions of Clauses 7, 8, 9, 10, 11.2, 13.2 and 13.3 hereof shall survive termination of the Agreement for any reason.

Disclaimer:
Template does not constitute any form of legal advice, and the User is at all times encouraged to request external specific legal advice in respect of the execution of legal documents.
Product Supply Agreement

A product supply agreement sets the terms and conditions for the supplier to deliver the goods or services. Use our free template to create the contract, use it, and store it here on Contractbook.

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What is a product supply agreement?

Globalization's profound influence on trade and business has ushered in an era of diverse products saturating the market. In this new normal, products navigate the hands of international manufacturers, distributors, retailers, and buyers before ever reaching your doorstep.

That’s why it’s paramount to establish clear rights and responsibilities at the onset of a business relationship — the product supply agreement. This contract ensures a seamless journey for the items in transit, fostering efficiency throughout the intricate global trade landscape.

Enough talk. What is a product supply agreement? It’s the foundational document dictating the terms under which a supplier provides products to a buyer. 

In this exchange, the supplier, whether an individual or business, offers goods or services to another business — the buyer or purchaser. Often categorized as 'buy-side' and 'supply-side' contracts, these agreements articulate the framework for the exchange.

How does a product supply agreement work?

A product supply agreement becomes effective when both the supplier and the buyer sign the contract, showing their agreement to the terms. This agreement outlines the rules for the relationship between the two parties, specifying their rights, duties, and responsibilities.

Typically, the agreement includes a detailed scope of work, specifying the goods or services the supplier will provide and setting key performance indicators or service levels. The buyer must pay the agreed-upon sum for the supplier to fulfill their obligations.

In essence, the supplier agreement acts as a roadmap for the business relationship, providing a clear framework for interaction. 

If either party fails to meet their commitments, the agreement offers remedies such as termination or legal action.

How do you create a product supply agreement?

A supplier agreement outlines the terms and conditions governing the delivery of goods or services. Key components include specifics about the product or service, pricing, delivery plans, quality standards, payment, and what happens during a contractual breach.

  • Define goals: Both parties should clearly outline the agreement's goals before signing. Suppliers must assess realistic product supply capabilities, while buyers must determine their product needs for the specified duration. 
  • Term of agreement: Supply agreements have specific time frames or can be indefinite. Early termination in a fixed-term agreement typically requires a valid reason unless stated otherwise. Indefinite contracts can be terminated by either party with or without cause unless specified otherwise.
  • Price and payment terms: Short-term agreements may benefit from a set price, while long-term contracts might consider flexible pricing structures, such as discounts from list prices or reference published commodity prices.
  • Exclusive dealing: Before committing to an exclusive deal, thoroughly understand the supplier's business. Exclusive agreements may be challenged if they restrict competition, especially if the supplier provides a unique product or service crucial for the buyer's competitors.
  • Review period: Allow sufficient time for both parties to review the agreement thoroughly. This reduces the likelihood of claims regarding misunderstandings or the need for more awareness about terms and obligations.
  • Notarization: Consider having the agreement notarized for an extra layer of validity, minimizing potential challenges to the agreement's legitimacy.

Automate your product supply agreement with Contractbook 

Today, you start on a journey of simplicity and efficiency with Contractbook. Think of us as your tour guide through the maze of product supply contracts. And do you know who isn't invited on the adventure? PDFs. Say goodbye to the mundane task of copying/pasting and stagnant PDFs. You’re going to create product supplier agreements effortlessly with dynamic templates. Commercial teams transform into contract conjurers, crafting magical, lovable documents in just a few clicks.

No more writing unique contracts for every supplier. With Contracgtbook, you incorporate conditions based on data. Your contracts, your rules — all in one centralized location

Suppliers can now sign agreements on the go. Read, receive, sign — all from the comfort of wherever they are. And the content repository is your fortress of security. Safely store and manage supplier agreements — easily searchable, queryable, and scalable. No more contract hide-and-seek; everything's in its place.

Tired of reinventing the wheel? Our free product supplier agreement template is a good start, but why stop there? With Contractbook, import all your existing contract data, automate agreements, and liberate yourself from paperwork nightmare. Ready to join the revolution? Click here to start putting the love back in contracts. 

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