A Supply of Goods Agreement is a legal contract between a supplier and a buyer that outlines the terms and conditions under which goods will be supplied. This agreement typically covers aspects such as the quality and quantity of goods, delivery schedules, pricing, and payment terms, ensuring clarity and mutual understanding between the parties. It serves to protect the interests of both the supplier and the buyer, establishing a framework for a reliable and efficient business relationship and ensuring a consistent supply of products as per agreed standards and timelines.
SUPPLY OF GOODS AGREEMENT
THIS AGREEMENT is made on [Date]
- [Supplier Name], [a sole trader/a partnership/a company incorporated and registered in [COUNTRY NAME] with company number [Company Number] whose registered office is at [Supplier Address]] (“Supplier”);
- [Customer Name], [a sole trader/a partnership/a company incorporated] and registered in [COUNTRY NAME] with company number [Company Number] whose registered office is at [Customer Address]] (“Customer”).
(A) The Supplier is in the business of manufacturing and supplying [description of goods].
(B) The Customer wishes to purchase such goods from the Supplier and may wish to place recurring orders for the goods.
NOW, THEREFORE, the parties agree as follows:
SUPPLY OF GOODS AND ORDER PROCEDURE
1- The Supplier shall manufacture and supply the Goods to the Customer in accordance with the terms of this Agreement and orders submitted by the Customer in the form agreed upon.
SPECIFICATIONS AND COMPLIANCE
2- The Goods to be supplied shall conform to the specifications outlined in Schedule 1 and shall comply with all applicable [COUNTRY] standards and regulations. The Supplier shall provide the necessary documentation and certifications to demonstrate such compliance, mitigating the risk of non-conformity for the Customer.
PRICE, PAYMENT, AND REVIEW
3- The price for the Goods shall be as set out in Schedule 2. Prices are subject to an annual review and any changes will be mutually agreed upon in writing. This mechanism provides a balance against market fluctuations or cost increases, offering predictability for both parties regarding pricing.
DELIVERY, RISK, AND TITLE
4- Delivery terms shall be in accordance with [Incoterms 2020 rule], and the risk and title shall pass to the Customer upon delivery at the specified location. This clarifies the allocation of risks during delivery and ensures the transfer of ownership to the Customer upon receipt of the Goods.
5- The Supplier shall maintain at its own expense commercial general liability insurance, including product liability, in an amount not less than [Amount] per occurrence and [Amount] in the aggregate. Proof of such insurance, with the Customer listed as an additional insured, shall be provided to the Customer upon request. The Supplier is responsible for ensuring that the goods are adequately insured until the transfer of risk as per the agreed Incoterms rule.
PAYMENT DELAYS AND INTEREST
6- In the event of late payment by the Customer, interest shall accrue on the overdue amount at an annual rate equal to [X]% above the base lending rate of [Bank Name], commencing on the due date and continuing until fully paid, whether before or after judgment. The interest rate should be reasonable and in compliance with the laws governing the agreement to ensure enforceability.
ORDER CANCELLATION AND AMENDMENTS
7- The Customer may cancel or amend any order without incurring any charge provided that the Supplier receives written notice of such cancellation or amendment not less than [X] days before the scheduled delivery date. Cancellations or amendments made after this period may incur a cancellation/amendment fee of [Y]% of the order value to compensate the Supplier for any costs incurred up to the date of cancellation or amendment.
QUALITY ASSURANCE AND PRODUCT WARRANTY
8- The Supplier guarantees the quality of the Goods, providing a warranty valid for [warranty period] from the date of delivery. Any Goods found to be defective within this period shall be replaced or repaired at the Supplier’s expense. This warranty offers assurance to the Customer on the Goods’ performance and imposes an obligation on the Supplier to maintain quality standards.
INTELLECTUAL PROPERTY RIGHTS
9- The Supplier is the sole owner or lawful licensee of all intellectual property rights in and to the Products, including but not limited to trademarks, trade names, patents, design rights, and any and all other intellectual property rights which are used or which relate to the Products.
10- The Supplier hereby grants the Customer a non-exclusive, non-transferable, revocable license to use, display, and promote the Supplier’s trademarks and trade names solely in connection with the marketing, sale, and distribution of the Products within the Territory and in accordance with the terms and conditions of this Agreement. The Customer agrees not to use the Supplier’s intellectual property for any purpose other than as expressly permitted by this Agreement and shall not modify, alter, or deface any of the Supplier’s trademarks or trade names without the Supplier’s prior written consent.
11- The Customer acknowledges that all goodwill associated with the use of the Supplier’s trademarks and trade names will inure to the benefit of the Supplier. Upon termination of this Agreement, the Customer shall immediately cease all use of the Supplier’s intellectual property.
12- The Customer shall promptly notify the Supplier of any infringement, misappropriation, or unauthorized use of the Supplier’s intellectual property rights that comes to the Customer’s attention. The Supplier shall have the sole right and discretion to take legal action to defend or enforce its intellectual property rights, and the Customer agrees to cooperate fully with the Supplier in any such action.
13- The obligations under this section shall survive the termination or expiration of this Agreement for a period of [number] years, reflecting the enduring nature of intellectual property rights.
14- The Customer agrees that it will not register, or attempt to register, any trademarks or trade names that are the same as, or confusingly similar to, the Supplier’s trademarks and trade names. Any such registrations by the Customer shall be immediately transferred to the Supplier upon the Supplier’s request, at no cost to the Supplier.
COMPETITION AND MARKET RESTRICTIONS
15- The Customer agrees to refrain from any activities that restrict competition and to comply with all applicable local competition laws. The Customer shall avoid any pricing or marketing strategies that would constitute unfair competition during the marketing and sale of the Supplier’s Products.
16- Both parties acknowledge that during the course of this Agreement, each may come into possession of confidential and proprietary information belonging to the other party (“Confidential Information”). Each party agrees to maintain the confidentiality of such information and to use it only for the purposes necessary to fulfill their obligations under this Agreement.
17- Within [number] days of the Effective Date of this Agreement, the parties shall execute a separate Non-Disclosure Agreement (NDA) to ensure the protection of Confidential Information. The terms of the NDA will further define the confidentiality obligations and will form an integral part of the protection of each party’s proprietary information.
18- The obligation of confidentiality shall survive the termination or expiration of this Agreement for a period of [number] years.
19- Neither party may assign or transfer any of its rights or obligations under this Agreement, whether by operation of law or otherwise, without the prior written consent of the other party, which consent shall not be unreasonably withheld or delayed. Notwithstanding the foregoing, either party may assign this Agreement in whole or in part to an affiliate or in connection with a merger, acquisition, corporate reorganization, or sale of all or substantially all of its assets without the other party’s consent, provided that the assignee agrees in writing to be bound by the terms of this Agreement.
LIABILITIES AND INDEMNITIES
20- Each party shall indemnify the other against any claims arising from the breach of this Agreement or the negligence or willful misconduct of the indemnifying party.
21- The parties acknowledge that a breach of certain obligations under this Agreement may cause irreparable harm and significant injury to the non-breaching party, which may be quantitatively difficult to ascertain. Accordingly, the parties agree that, in the event of any breach or threatened breach of the following sections: [specific sections or obligations], the breaching party shall pay to the non-breaching party an agreed-upon amount as liquidated damages, and not as a penalty.
22- The parties agree that the sum of $[amount] is a reasonable estimate of the non-breaching party’s damages and shall be paid within [number] days of a written demand from the non-breaching party.
23- The payment of liquidated damages is intended not as a penalty, but as full compensation for the non-breaching party’s loss. This sum shall be in addition to, and not in lieu of, any rights to equitable relief to which the non-breaching party may be entitled under this Agreement or in law, and any actual damages, loss, or injury sustained by the non-breaching party.
24- The liquidated damages are separate and apart from any other remedies or damages available to the non-breaching party under this Agreement or under applicable law. The breaching party’s liability for liquidated damages shall not limit the non-breaching party’s right to any other remedies, including actual damages, and shall not be construed to limit the non-breaching party’s right to demand specific performance or injunctive relief.
TERM AND TERMINATION
25- This Agreement shall commence on the Effective Date and continue for a period of [number] years unless earlier terminated in accordance with the provisions of this section.
26- Either party may terminate this Agreement for cause if the other party materially breaches any of its terms and fails to cure such breach within [number] days after receiving written notice of such breach.
27- In addition to the above, either party may terminate this Agreement without cause upon [number] days written notice to the other party.
28- Upon termination or expiration of this Agreement, the Customer shall immediately cease use of the Supplier’s trademarks, cease representing itself as a Customer of the Supplier, and return all confidential information within [number] days of termination.
29- “Force Majeure Event” refers to any event or circumstance that prevents a party from performing its obligations under this Agreement, which is beyond the reasonable control of the affected party, including but not limited to acts of God, war, terrorism, riots, embargoes, acts of civil or military authorities, fire, floods, accidents, strikes, or shortages of transportation facilities, fuel, energy, labor or materials.
30- If either party is prevented from performing any of its obligations under this Agreement due to a Force Majeure Event, the affected party shall promptly notify the other party in writing, providing details of the Force Majeure Event and any anticipated delay in performance.
31- The affected party’s performance under this Agreement shall be suspended for the duration of the delay caused by the Force Majeure Event and will require no penalty or liability for such delay. The affected party shall use reasonable efforts to mitigate the effects of the Force Majeure Event and to resume performance of its obligations as soon as reasonably possible.
32- If the Force Majeure Event continues for a period exceeding [number] days, either party may terminate this Agreement without penalty upon written notice to the other party. Upon such termination, the parties shall be relieved of their obligations under this Agreement, except for those obligations that by their nature are intended to survive termination.
33- The parties shall meet to discuss good faith solutions if the Force Majeure Event significantly affects the commercial basis of this Agreement.
34- In the event that a Force Majeure Event significantly affects the financial capabilities of the affected party, the parties may negotiate in good faith to defer or adjust the payment obligations until the Force Majeure Event ceases to prevent performance.
PRODUCT RECALL PROCEDURE
35- In the event of a product recall, the Customer shall cooperate with the Supplier to execute the recall process as detailed in Annex Product Recall Procedure.
GOVERNING LAW AND DISPUTE RESOLUTION
36- This Agreement shall be governed by and construed in accordance with the laws of [Governing Law Country], and any disputes shall be resolved through arbitration in accordance with ANNEX – Arbitration Rules.
37- This Agreement constitutes the entire agreement between the parties and supersedes all prior agreements and understandings, both written and oral, relating to its subject matter.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.
- Specifications (Include detailed description and any plans or drawings.)
- Price and Payment Terms (Details of the price, payment schedule, and method of payment.)
- Delivery Terms (Specify delivery terms, including timing and location.)
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.
[SIGNATURE OF SUPPLIER]
[SIGNATURE OF CUSTOMER]
ANNEX – PRODUCT RECALL PROCEDURE
In the event of a Product recall, the following procedure shall be implemented:
1. Notification: The Supplier will notify the Customer immediately upon the decision to recall any Product, providing details of the affected batch(es) and the reason for the recall.
2. Stop Sale: The Customer will immediately cease the sale and distribution of the affected Product(s) and notify all customers who have purchased the affected Product(s).
3. Return of Products: The Customer will organize for the return of the affected Product(s) to the Supplier or to a location designated by the Supplier.
4. Product User Refunds or Replacements: The Customer will work with the Supplier to determine whether product users will receive refunds or replacements.
5. Reporting: The Customer will provide the Supplier with a report detailing the recall process and the current status of the affected Product(s).
The Customer agrees to comply with all local regulations regarding Product recalls and to cooperate fully with the Supplier in any recall action.
ANNEX – ARBITRATION RULES
In the event of any dispute arising out of or in connection with this Agreement, the parties agree to the following arbitration process:
1. Notice of Arbitration: A party wishing to initiate arbitration must provide written notice to the other party, outlining the details of the dispute.
2. Appointment of Arbitrator: The parties will agree to appoint a single arbitrator. If the parties cannot agree on an arbitrator within [time period], an arbitrator will be appointed by [nominating body].
3. Arbitration Proceedings: The arbitration will be conducted in [City, Country] and will be governed by the [specified arbitration rules], as amended from time to time.
4. Decision: The decision of the arbitrator will be final and binding on both parties.
5. Costs: Each party will bear its own costs in the arbitration, and the costs of the arbitrator will be shared equally between the parties, unless the arbitrator decides otherwise.