A supply agreement is a formal document created by a company and a vendor where the terms and conditions are laid down regarding the supply of goods, components or equipment. By having the agreement, the buyer and the vendor need not discuss arrangements regularly and can follow the terms every time for a fixed period. Financial compensation is also mentioned along with mode and date of payment. The supply agreement helps the vendor know what are his rights and responsibilities and helps to avoid conflicts in the future.
Since an agreement is valid for a considerable period of time, the vendor has a steady business of supplying goods and can make good sales. It is beneficial for the buyer too, as he does not have to look for a new vendor every time and can be ensured the right kind of product regularly. The agreement should clearly mention the number of goods to be sold and at what price.
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Sample Supply Agreement
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