The terms and conditions under which one business will produce and deliver products to another are set out in a supply agreement. Like any other agreement, a supply agreement can be exclusive or non-exclusive. It should include all the details of the product or service to be supplied. Supply agreement templates are used in the making of such agreements.
The first stage of preparing an agreement form for supplies is to define the sides or parties involved in the contract. One party is supposed to provide or produce the supplies required while the other is supposed to receive it. This should also include if the agreement is exclusive or non-exclusive.
The product or service to be supplied should be mentioned clearly in the agreement. Every detail about the product should be defined and explained. If there are any specifications regarding the product such as federal laws and regulations, policy for rejection of the product by the receiver, etc., they need to be determined.
In the next section of the agreement, it should be mentioned how the client is to place the purchase order for supplies and if he or she will get separate invoices for the orders. You also need to explain in this section if the orders are going to be supplied on a monthly, daily, weekly or yearly basis. The pricing strategy of the product should determine how much each order will cost. If any policy is there for late payments, it needs to be specified.
This is a very significant consideration because often harm to the item is not subject to an infringement of the agreement by either side, so it requires to be discussed at the beginning which party will bear the costs of affected products so there is no conflict. You should also mention in this section about the freight and shipping costs.
How long will your agreement last? This defines the term of the agreement which should be provided clearly in the agreement. It is essential to specify when the agreement will be terminated and the policy to be followed at the end of the arrangement.
If both sides are satisfied with the draft, it can be printed out as the final agreement. At the end of the agreement, provide spaces for putting the signature and date of both parties. Without it, there is no way to prove that both parties acknowledge and comply with the agreement.
