The supply agreement is usually entered into between the customer and the supplier company for obtaining products and services as specified in the supply order from time to time according to the terms and conditions set out in the supply agreement. The supply agreements shall allow the customer to procure products and/or services from the supplier and shall become effective from the date of execution by both parties. The supplier and customer agree to be legally bound and agree to define the terms and conditions which may include acceptance tests, confidentiality of information, delivery, implementation site, price, products, project manager, services, supply order, software, sub-contractor and, variation order.
The supply agreement shall be effective until all purchases have been paid in full and may continue thenceforth unless terminated by either party subject to adequate notice of termination. In addition, the service agreement may be terminated by either party subject to presentation of a petition, or if a liquidator, receiver, administrative receiver or an administrator has been appointed for the whole or part of its assets or business or on passing an order or resolution to dissolve or liquidate, not being an instance of solvent amalgamation or reconstruction.
In case a party is in breach of any terms of the supply agreement a notice in writing to the other party is necessary and the party shall also co-operate with the other party to allow a reasonable time to correct the breach and upon expiration of such time, a further grace period may be provided to the party to rectify the breach and if, even after this time, the breach has not been corrected, then the supply agreement may be terminated.
The supplier must agree to supply to the customer products and services as set out in the supply order which have been expressly accepted by the supplier from
time to time and such products and services should be delivered to the implementation site in accordance with approved programs. Both parties should agree that all products and services to be supplied by the supplier are limited to those specified in the supply order.
The customer shall bear all costs and expenses for preparing the implementation site in accordance with the suppliers' wishes and the supplier shall be given access to the site by the customer. As far as possible the supplier will endeavor to the best of his abilities to deliver the products and services in good time and reasonable time delays may not be treated as breach of contract. The supplier shall invoice the customer for the price of products and services provided to the customer. This may be followed by an acceptance on the part of the customer to signify that the products and services purchased are compliant with the acceptance criteria.
The supply agreement is a detailed agreement that should contain the general information about the customer, including name, address, identification, contact information and name and title of authorized persons. In addition, the billing information should also specify the billing address, name of controller or account manager, contact address of the customer as well as name and title of addressee.
There are many useful supply agreement formats available on the market and buying one will save time, money and effort and for the low cost that it entails, one would be well advised to use this option, instead of going through the entire process from scratch and trying to formulate one on one's own. All the necessary research and leg work has already been done and these forms are ready to use off the shelf and can also be tailored to meet individual requirements, without much additional effort or money being spent.
Author Resource:-
Wade Anderson is a CPA and operates DigitalWorkTools.com
Click to view a Supply Agreement
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