What is Supplier Agreement Drafting?
A supplier agreement is a legal document between a business and a supplier. It specifies how goods or services can be purchased and sold. It has to provide clear terms, such as regarding deliverables, delivery, and risks, to prevent ambiguity and disputes.
Read the rest of this article for key terms to include in a supplier agreement, how to draft it, and when to consult a qualified lawyer for assistance with the drafting process.
What are Key Terms for a Supplier Agreement?
A supplier agreement usually contains essential information, such as the following:
- Work scope. Outline all products or services that will be provided under the agreement.
- Payment terms. Specify all amounts and unit costs. You should include clarity about how late or missed payments will be handled.
- Delivery. State the delivery schedules and shipping responsibilities.
- Quality standards. Include quality standards to meet and testing criteria, as well as inspection processes.
- Liability and risk. Mention limits on liability and indemnification. Clarify which party will handle operational and transit risks.
- Force majeure. Explain how things that could go wrong that aren’t in the parties’ control, such as hazardous weather or supply chain disruptions, can impact parties’ obligations.
- Termination. Specify what conditions will trigger contract termination and what notice periods are required by parties before ending the agreement.
What are Tips for Drafting a Supplier Agreement?
Once you’ve included key terms, your supplier agreement should mention additional information to strengthen supplier relationships. Here are some important drafting tips to consider.
Establish Expectation Clarity
Your agreement needs to define exactly what is going to be delivered, how, and when. This keeps both parties on the same page from the start of the agreement.
Protect Confidential Information
Since various confidential information and intellectual property (IP) will be accessed and shared during the agreement, such as custom designs or sensitive data, you want to include a clause to protect it. Clearly define who owns all data and IP to reduce your dispute risk.
Provide Specifications
Define the quantity and quality standards of all goods or services covered by the document. Here, you should specify inspection and acceptance procedures for clarity between parties.
Outline Delivery Processes
You want to provide clear timelines for deliveries and shipments. Provide reasonable and fair remedies if these schedules aren’t met to protect the parties’ interests.
Specify Payments
Your agreement must be comprehensive about all pricing and payment terms, such as unit prices, bulk purchase prices, and payment deadlines. If there are pricing adjustments, their processes must be included for transparency.
Should You Hire a Lawyer for Supplier Agreement Drafting?
Although you might not always need to hire a lawyer for supplier agreement drafting, it’s a smart decision. A lawyer is experienced in drafting these contracts so that they are legally sound, clear on parties’ obligations, and they can minimize your risk of financial or legal disputes.
Here are some common ways in which a lawyer can help you draft a supplier agreement:
- Defining the supply scope. A lawyer will describe all services and products included in the agreement, their specifications, and deliverables.
- Establishing payment terms. They’ll clarify prices and additional payment terms, such as invoicing processes and payment deadlines.
- Setting delivery requirements. They’ll outline delivery and shipping responsibilities and schedules. This includes navigating delays that arise.
- Allocating liability and risks. They’ll include provisions in the agreement to protect both parties against losses.
- Ensuring legal compliance. A lawyer will use their experience and knowledge to review all relevant laws and industry requirements and align the agreement with them to prevent non-compliance.
- Protecting confidential information. They’ll include clauses to protect sensitive data and intellectual property to prevent ownership and violation disputes.
- Reviewing your agreement. If you’ve already drafted a supplier agreement, you can hire a qualified lawyer to review it for you. This will give you peace of mind about all its terms.
Where to Find a Lawyer for Supplier Agreement Drafting
A supplier agreement can be tricky to navigate, which is why you should hire a lawyer to draft it for you. Instead of searching for lawyers by calling traditional law firms in your area, you should use an online legal platform that makes it convenient to get in touch with reputable, reliable lawyers.
ContractsCounsel is one of the largest online legal marketplaces that connects you to a curated network of lawyers who have been vetted on the platform.
To ask a lawyer on the platform to draft your supplier agreement, here are the easy steps to follow:
- Go to the ContractsCounsel marketplace.
- Select ‘One-time project’ and ‘Create or update contract.’ Or, if you’d prefer to hire a lawyer to review your agreement, choose ‘Review contract.’
- Post your project or request for free. Try to include some information about what you need or the type of supplier agreement so you can hire a lawyer who meets your requirements.
- Wait for bids. You’ll receive bids from lawyers on the platform who are ready to assist you, instead of having to search for a lawyer to hire.
- Review the platform’s lawyer data. This includes their location, years of experience, field of expertise, credentials, and client ratings for previous projects completed on the platform. This information will help you to select a lawyer who has experience with drafting your specific contract.
- Select a lawyer who meets your requirements and hire them to draft or review your agreement for a flat fee.