Supply Agreement Template

This supply agreement template is designed for use where goods are sold on a recurring or one-off basis from a supplier to a buyer. It focuses on the supply aspect of their relationship.

• Covers exclusive and non-exclusive supplies (check a box to indicate if you want to tie the buyer to just buying from you, or if you want to allow them to source from other suppliers too)
• Allows you to describe the actual goods being supplied and includes sections on delivery and installment schedules
• Covers the transfer of ownership and risk when goods are delivered, so there’s no question as to who takes the loss if goods are damaged during shipment.
• Creates warranty obligations and allows you to set the timeframe and process for fixing defects, including replacement periods and refunds
• Clarifies pricing lock-in periods and invoice terms so both parties are clear on what is owed and when payment is due

Download this customizable supply agreement sample for free as a Word document or PDF.

Who It's For

A supply agreement applies when two parties set terms to regularly purchase and deliver goods or services These can be:

• Businesses and distributors that are supplying products to retail businesses or distributors on an ongoing basis. You want a contract in place that outlines your pricing, volumes, and delivery requirements.
• SMBs and startups that want to purchase products from a vendor. You don’t want to write your own agreement from scratch; you just need a simple template you can use.
• Buying managers at larger organizations that are looking for a template to use when creating standardized contracts with multiple suppliers.
• Third-party suppliers that are looking to secure their payment terms and set expectations around product quality before shipping.

What's Included in the Supply Agreement Template

• Scope: States what this agreement is for and that this agreement supersedes each party's standard terms and conditions.
• Products: Describes the specifics of what is being supplied, including which products are being supplied, how much of those products is being supplied, and any delivery schedule associated with the agreement.
• Supply of products: Details whether the agreement is exclusive or non-exclusive. This clause also allows the buyer to inspect the products upon delivery before accepting the products.
• Orders: Clarifies that all orders between the supplier and buyer must be placed with a written purchase order and confirmed with an invoice.
• Pricing and payment terms: Establishes the price that was agreed upon between the parties, any taxes that will be charged, how long after receiving the invoice the payment is due, and any other payment terms agreed upon by the parties.
• Ownership and risk: Addresses when title passes to the buyer and transfers risk during transit from the supplier until the products are delivered.
• Warranty: Addresses remedies if the products are delivered defective. How long the supplier has to provide replacement products or make repairs, and when a refund can be issued.
• Term and termination: Clarifies the length of time the agreement is in effect and how either party can terminate the agreement before the end date.
• Governing law and assignment: Addresses which state whose laws will be used to interpret this agreement, and prohibits either party from assigning the agreement to another party without the other's consent.

How to Write This Supply Agreement

After you download and open the template in Word or PDF form, here’s where your choices come into play.

1. Choose exclusive or not exclusive first 

In the Supply of Products clause, there’s a blank to fill in stating “exclusively or non-exclusively.” Don’t ignore this line. If you’re the supplier, being exclusive restricts who you can sell to. If you’re the buyer, exclusivity prevents your supplier from selling the same goods to your competitor. If it should be exclusive both ways, make sure that’s clear in this clause.

2. Define your products specifically 

Ambiguous product descriptions lead to arguments. Don’t put “computer chips.” Put the model numbers, specifications, allowed tolerances, and whether substitution is allowed if the specific model is unavailable. If you’ll deliver in increments, define the delivery schedule here. Don’t do that in a follow-up email. 

3. Agree on how long the price is locked

In the template, you can specify the period during which the price you’ve both agreed to is locked in as the sales price. Will that be 30 days? 90? 365 days? This is tremendously important if you’re dealing with volatile markets. Consider adding a clause that says you both can renegotiate if market prices change drastically, but until then, specify how long that price is locked in.

4. Agree on when payment is due based on how you actually operate

In the invoices clause, you specify how many days after receipt of the invoice that payment is due. Suppliers typically want 15-30 days. Buyers usually ask for 45-60. Whatever your final agreement is, define when that clock starts. It’s typically upon receipt of the invoice, not upon shipment.

5. Limit the remedy for warranties to what you actually desire

There are three remedies for defective merchandise listed in the warranty section: replace, repair, or refund. You can leave them all checked, letting the supplier decide. Or you can limit it. If you require replacement within X number of days, say that.