What is Supply Agreement Review?
A supply agreement is a legal contract in which a seller provides specific goods or services to a buyer within a certain period of time. All terms of the parties’ working relationship must be clear to prevent ambiguity that can result in supply challenges.
Once you’ve drafted a supply agreement, you should read through it carefully to review all its terms.
Read the rest of this article to explore the key terms in a supply agreement, general tips for reviewing the contract, and how a qualified lawyer can assist you with the review process so you don’t put yourself at financial or legal risk.
What Key Terms Should You Review in a Supply Agreement?
There are some common terms you’ll find in a supply agreement, which you should closely review for accuracy.
- Scope. Check what goods or services will be provided so that parties don’t experience confusion. The more details, the better.
- Pricing and payments. Ensure that the agreement specifies all terms to prevent disputes and delays, such as payment schedules.
- Delivery. The delivery process must be specific, such as by outlining shipping details.
- Quality control. To maintain quality standards, you should check that the agreement specifies quality measures and how to navigate situations such as returns.
- Confidentiality. Since private information will be shared, verify that the agreement contains measures for protecting it and intellectual property (IP).
- Liability and indemnity. To protect your interests, check that the agreement clarifies which party is responsible for damages or losses.
How Do You Review a Supply Agreement?
A supply agreement should specify important aspects of the working arrangement so that both parties are aware of their obligations and rights. Once you’ve reviewed the agreement’s key terms, here are some things to consider during the review process.
Verify Goods
If your agreement includes physical goods, make sure that there’s clarity about their descriptions. Include product dimensions and specifications to prevent confusion over what’s being provided. You should also establish packaging and labeling rules.
Consider Payments
Since payment terms can be detailed, you need to check that the agreement states unit prices, how payments are made, and when they can be expected.
Include Approval Criteria
Parties will want to maintain quality standards, which is why your supply agreement should explain how inspections and acceptance or rejection processes will be handled. This provides transparency, such as if the buyer has to return damaged goods.
Check Delivery and Shipping Information
To properly complete orders, the supply agreement should stipulate how deliveries and shipping should be handled. This will allow goods to reach the buyer in a timely way, which helps to enhance working relationships and business operations.
Confirm Confidentiality and Non-Disclosure Provisions
Ensure that the agreement contains clear, detailed non-disclosure provisions to protect parties’ confidential information. This fosters trust between parties and prevents legal disputes.
Should You Hire a Lawyer for Supply Agreement Review?
It’s worth hiring a lawyer to review a supply agreement for you. A lawyer is experienced and skilled in reviewing this contract so that it’s worded correctly. During a review, a lawyer will:
- Identify any potential legal or financial risks. They’ll spot clauses that could expose you to surprise risks and include protective provisions. For example, if the agreement states that the supplier isn’t liable for consequential losses arising from the supply, a lawyer will revise this to ensure supplier responsibilities that are more balanced.
- Review commercial terms. These include payment and pricing terms to prevent disputes over late payments.
- Evaluate liability and indemnity. A lawyer will examine which party is liable for products that are delayed or damaged.
- Negotiate terms with the other party. A lawyer will negotiate any unfavorable terms with the other party, if required.
- Protect you against supply challenges. A lawyer will assess all provisions to help you avoid shortages and delays.
- Check your IP rights. They’ll ensure IP ownership is clearly stated and IP can be used in permitted ways.
- Align the contract with all laws. They’ll confirm that the supply agreement addresses all applicable laws and regulations to ensure compliance.
- Flag contract terms. They’ll check for any one-sided or vague clauses and rewrite them so that the agreement is balanced and easy for both parties to understand.
- Consider your business goals. They’ll ensure all legal terms in your agreement are aligned with your commercial needs. This provides you with a customized contract.
- Provide a clear exit plan. You might want to terminate the agreement earlier than expected. A lawyer will help you by setting a clear exit strategy for you that protects your interests.
Where to Find a Lawyer for Supply Agreement Review
If you need to hire a lawyer to help you review a supply agreement, you don’t have to find the process time-consuming or stressful. By using an online legal platform, you can access a network of qualified lawyers who are experienced to help you.
ContractsCounsel is one of the largest online legal marketplaces that connects you to a network of vetted lawyers.
By providing you with a range of lawyers who are skilled and experienced in contract drafting and review, ContractsCounsel makes the process of finding a suitable lawyer to review your supply agreement easy.
Here is how the process works:
- Start by going to the ContractsCounsel marketplace.
- Post your project for free. Include a few details to help you find the most suitable lawyer, such as why you need a contract review.
- Wait for bids. Receive multiple bids from lawyers directly on the platform who are ready to assist you.
- Review the lawyers’ information. The platform provides lawyer data, such as their location, client ratings for previous projects, expertise, and credentials. This ensures you match with the right lawyer.
- Connect with a lawyer you think is best suited to your requirements and hire them to review your supply agreement for a flat fee.
