A supply chain agreement template helps create a professional format which you can use with peace of mind. It is a contract between a supplier and a buyer where the supplier in which the supplier agrees to manufacture and supply their products to the buyer to further sell them for a limited time period. This agreement basically grants the flow of the supplier’s products to the buyer and then to a third party. This way, the business of a supplier grows because his/her products are being widely sold to many clients. Whereas, the buyer gets monetary benefits just by selling those products to a number of customers. It is basically like a chain of products starting With the manufacturer, with the buyer and finally, with the third party.
Importance of Supply Chain Agreement
A supply chain agreement is carried out so that the buyer can make a legal document and write down all the specifications about the trade. The supplier has to agree to all of them and the trade can commence between the parties. The point is to ensure that both parties have legal proof of the other party agreeing to all the terms. This is crucial in order to avoid future litigation problems. It also helps both parties understand their respective responsibilities and duties regarding the agreement.
Elements of a Supply Chain Agreement
A supply chain agreement template is documented which is prepared to make clear all the aspects to the reader one by one. It uses uncomplicated lingo and is straight forward to keep any sort of confusions to a minimum. However, it should be descriptive in terms of the rights and duties of both parties. A general insight into what a supply chain agreement should look like is given below:
DATE: The date on which the agreement will be made effective.
INTRODUCTION: The introduction to both parties. Who is the supplier and the buyer? Their names, company name, contact information and respective address.
REASON OF THE AGREEMENT: The reason why the agreement is being bought into use should be stated. For example, this agreement is being made effective to grant the supplier the right to supply their products to the buyer for a limited time period.
PRODUCT SPECIFICATION: The products that the buyer wants to buy from the supplier, its quantity, and price.
SUPPLY DETAILS: The duties of the supplier must be made clear. These include how the product will be supplied to the buyer. The supplier has to agree to take it upon themselves to ensure the supply of the product without any limitation once the contract has been signed.
PAYMENT: The payment expected from the buyer for the products according to the quantity of the product must be clearly discussed. Issues like discounts and offers should also be mentioned in the agreement. Transaction details of the money should also be specified and the date on which the buyer will pay the money.
CONFIDENTIALITY RIGHTS: It is necessary to make sure that both parties are aware that the details of the agreement must not be disclosed to any third party without the consent of both parties. In case of violation of this term, the suspected party will be subjected to charges made by the law.
Templates for Supply Chain Agreement
Source: contracts.justia.com
Source: www.wordstemplates.org