(Goods)
This Supply Agreement (the "Agreement") is entered into as of the date last signed below (the "Effective Date") between:
Supplier: _____________________________________________ (the "Supplier"), a company incorporated under the laws of _____________ with registered number _____________, whose registered address is _____________________________________________.
Buyer: _____________________________________________ (the "Buyer"), a company incorporated under the laws of _____________ with registered number _____________, whose registered address is _____________________________________________.
The Supplier and the Buyer are referred to individually as a "Party" and collectively as the "Parties."
1. Definitions
In this Agreement:
"Contract Price" means the price for the Goods as set out in Schedule A, subject to adjustment in accordance with clause 5.
"Delivery Date" means the date(s) for delivery of the Goods as specified in each Purchase Order.
"Goods" means the goods described in Schedule A, including any goods supplied in substitution or replacement thereof as agreed by the Parties.
"Incoterms" means the International Commercial Terms published by the International Chamber of Commerce (ICC), 2020 edition, as specified in Schedule A.
"Purchase Order" means a written order issued by the Buyer to the Supplier specifying the quantity, specification, price, and required delivery date for a specific consignment of Goods.
"Specification" means the technical and quality specification of the Goods set out in Schedule B.
2. Supply Obligation
The Supplier agrees to supply the Goods to the Buyer in the quantities and at the times specified in Purchase Orders issued by the Buyer from time to time, subject to the terms and conditions of this Agreement.
This Agreement is a framework agreement governing all purchases of the Goods by the Buyer from the Supplier during its term. Individual consignments shall be ordered by way of Purchase Order. No Purchase Order constitutes a binding obligation on the Supplier until it has been acknowledged in writing by the Supplier within _____ business days of receipt.
The Supplier shall not substitute or modify the Goods without the prior written consent of the Buyer. Any modification that affects the Specification, safety, regulatory compliance, or performance of the Goods shall be subject to the Buyer's written approval before implementation.
The Supplier shall at all times maintain sufficient production capacity and raw material inventory to fulfil its obligations under this Agreement, and shall notify the Buyer immediately if it anticipates any difficulty in meeting a confirmed delivery schedule.
3. Forecasts and Minimum Volumes
The Buyer shall provide the Supplier with a rolling _____ -month non-binding forecast of anticipated purchase volumes, updated monthly, to assist the Supplier in production planning.
The Buyer commits to purchasing a minimum quantity of _____________ per _____________ during the term of this Agreement (the "Minimum Volume Commitment"), subject to the Goods meeting the Specification and delivery obligations being fulfilled by the Supplier.
Where the Buyer fails to meet the Minimum Volume Commitment in any given period without cause attributable to the Supplier, the Parties shall negotiate in good faith regarding any commercial adjustment.
4. Purchase Orders
The Buyer shall submit Purchase Orders to the Supplier in writing, specifying: (a) the quantity of Goods required; (b) the required Delivery Date; (c) the delivery address; (d) the applicable Purchase Order number for invoicing reference; and (e) any special requirements agreed between the Parties.
The Supplier shall acknowledge receipt of each Purchase Order within _____ business days. Failure to acknowledge within this period shall not constitute acceptance.
Purchase Orders may not be cancelled or modified by the Buyer without the Supplier's written consent, except as permitted by applicable law. Cancellation charges may apply as set out in Schedule A.
5. Price and Price Review
The Contract Price for the Goods is set out in Schedule A. All prices are exclusive of any applicable taxes, duties, and levies, which shall be the responsibility of the Buyer unless otherwise specified.
The Contract Price shall be fixed for the first _____ months of the Agreement. Thereafter, the Supplier may request a price review by giving not less than _____ days' written notice. Any price adjustment shall be agreed in writing and shall not exceed _____ per cent per annum, unless driven by a material change in raw material costs evidenced by documentary proof.
Currency: All amounts shall be invoiced and paid in _____________ unless otherwise agreed in writing.
6. Payment
Payment terms: _____________________________________________ (e.g. 30 days net from date of invoice / Letter of Credit at sight / _____________).
The Supplier shall issue invoices upon or after shipment of the Goods, accompanied by copies of the required shipping documents. Each invoice shall reference the applicable Purchase Order number.
If any invoice is disputed, the Buyer shall notify the Supplier in writing within _____ business days of receipt, specifying the grounds for the dispute. The undisputed portion shall be paid by the due date. The Parties shall resolve the disputed portion in good faith within _____ business days.
Interest shall accrue on overdue amounts at _____ per cent per annum above the _____________ base rate from the due date until the date of actual payment.
7. Delivery
The Supplier shall deliver the Goods in accordance with the Incoterms specified in Schedule A. Risk of loss or damage to the Goods shall pass as specified by the applicable Incoterms.
Time for delivery is of the essence. If the Supplier anticipates any delay, it shall notify the Buyer in writing as soon as practicable, stating the reason for the delay and the revised expected delivery date.
If the Supplier fails to deliver on the agreed Delivery Date, the Buyer shall be entitled to claim liquidated damages at the rate of _____ per cent of the value of the delayed consignment per week of delay, up to a maximum of _____ per cent of such value, without prejudice to any other rights or remedies available to the Buyer.
Delivery shall be accompanied by the following documents: commercial invoice; packing list; bill of lading or airway bill; certificate of origin; certificate of conformity or test report; and any other documents specified in Schedule A or in the applicable Purchase Order.
8. Inspection and Acceptance
The Buyer shall have the right to inspect the Goods within _____ business days of delivery (the "Inspection Period"). The Buyer may reject Goods that do not conform to the Specification, are damaged, or are incorrectly labelled.
The Buyer shall give written notice of rejection to the Supplier within the Inspection Period, specifying the grounds for rejection. Failure to give notice within the Inspection Period shall constitute acceptance of the Goods.
Where Goods are rejected, the Supplier shall, at the Buyer's election: (a) replace the rejected Goods within _____ days at the Supplier's cost; (b) repair the rejected Goods to meet the Specification; or (c) issue a full credit note for the rejected Goods and arrange for their return or disposal at the Supplier's cost.
The Buyer shall have the right to conduct pre-shipment inspections at the Supplier's premises or at an agreed third-party inspection agency, at the Buyer's cost unless the inspection reveals a non-conformity, in which case costs shall be borne by the Supplier.
9. Warranties
The Supplier warrants that the Goods: (a) will conform to the Specification at the time of delivery; (b) will be of satisfactory quality and fit for the purposes for which goods of that type are commonly used; (c) will be free from defects in materials and workmanship for a period of _____ months from delivery (the "Warranty Period"); (d) will comply with all applicable laws and regulations in the country of manufacture and, to the extent known to the Supplier, in the country of destination; and (e) will not infringe any third-party intellectual property rights.
If a warranty claim arises during the Warranty Period, the Buyer shall notify the Supplier in writing. The Supplier shall, at its option and cost, repair or replace the defective Goods or issue a credit note for the invoiced price.
10. Intellectual Property
All intellectual property rights in the Specification and any designs, drawings, or materials provided by the Buyer to the Supplier remain the property of the Buyer. The Supplier is granted a non-exclusive licence to use such materials solely for the purpose of manufacturing and supplying the Goods.
The Supplier shall not use the Buyer's trade marks, trade names, or brand identifiers in any marketing or promotional material without the Buyer's prior written consent.
11. Compliance and Ethical Sourcing
The Supplier shall comply with all applicable laws and regulations relating to: export controls; health and safety; labour standards; environmental regulations; and anti-bribery and anti-corruption legislation.
The Supplier shall not use forced, child, or trafficked labour in any part of its supply chain in connection with the Goods. The Buyer reserves the right to conduct ethical sourcing audits at the Supplier's premises on reasonable notice.
The Supplier shall provide the Buyer with all documentation required for the Buyer to demonstrate compliance with applicable import regulations, including country of origin documentation, phytosanitary or health certificates, and regulatory test reports.
12. Confidentiality
Each Party shall keep confidential all non-public information received from the other Party in connection with this Agreement, and shall not disclose such information to any third party without prior written consent. This obligation shall survive termination of this Agreement for three (3) years.
13. Limitation of Liability
Neither Party shall be liable for indirect, consequential, special, or punitive loss or damage arising under or in connection with this Agreement.
The Supplier's total aggregate liability under this Agreement shall not exceed the total Contract Price paid by the Buyer in the twelve (12) months immediately preceding the event giving rise to the claim.
Nothing in this clause shall limit liability for: death or personal injury caused by negligence; fraud or fraudulent misrepresentation; or any other liability that cannot be excluded by applicable law.
14. Force Majeure
Neither Party shall be in breach of this Agreement or liable for any delay or failure to perform its obligations to the extent that such delay or failure is caused by circumstances beyond its reasonable control, including acts of God, war, civil unrest, fire, flood, epidemic, government action, or disruption to transport networks ("Force Majeure Event"). The affected Party shall notify the other promptly and shall use reasonable endeavours to mitigate the impact. If a Force Majeure Event continues for more than _____ days, either Party may terminate the affected Purchase Order(s) without liability.
15. Term and Termination
This Agreement shall commence on the Effective Date and continue for a period of _____ years, unless earlier terminated, and shall automatically renew for successive _____ -year periods unless either Party gives _____ days' written notice of non-renewal.
Either Party may terminate this Agreement immediately on written notice if the other Party: commits a material breach not remedied within _____ days of written notice; becomes insolvent; or ceases to carry on business.
On termination, all outstanding Purchase Orders that have been acknowledged by the Supplier shall be fulfilled unless both Parties agree otherwise in writing.
16. Governing Law and Dispute Resolution
This Agreement shall be governed by the laws of _____________________________________________.
Any dispute shall be resolved by arbitration under the rules of _____________________________________________, seated in _____________________________________________, with English as the language of proceedings.
17. General
This Agreement, together with its Schedules, constitutes the entire agreement between the Parties regarding the supply of the Goods and supersedes all prior agreements.
Amendments must be in writing and signed by both Parties.
Neither Party may assign this Agreement without the prior written consent of the other.
This Agreement may be executed in counterparts. Electronic signatures are valid.
EXECUTION
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date last signed below.
For and on behalf of the Supplier:
Authorised Signatory: _____________________________________________
Full Name: _____________________________________________
Title: _____________________________________________
Date: _____________________________________________
For and on behalf of the Buyer:
Authorised Signatory: _____________________________________________
Full Name: _____________________________________________
Title: _____________________________________________
Date: _____________________________________________
Schedule A — Goods Description, Contract Price, Incoterms, Minimum Volumes, and Cancellation Charges
Schedule B — Technical and Quality Specification
Schedule C — Required Shipping and Compliance Documents
Doc 15 — Supply Agreement (Goods) — Neutral Template