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Supply Contract for Reliable Materials

August 12 2010

The purpose of a supply contract is so a formal document can be written out and agreed to by a company and their third party vender that is legally binding. This type of documents defines the working relationship between the two parties for a specified time.

While there are many different types’ of formats a supply contract can take, most have the same fundamental items that should be present. Each of the items should be addressed in plain language so there is no ambiguity on what has been decided upon.

All of the contents of this contract should have already been discussed in detail before the contract itself is drawn up. This way no changes should have to be made and the responsible party’s only requirement is to sign the document to make it legally binding.

As part of a supply contract the deliverable that is to be supplied from the third party vendor should be described in detail. This should include the required specifications the deliverable has to meet for it to be acceptable by the receiving company

If necessary there should also be all the required documentation that is needed by the company from the third party supplier listed in the supply contract along with any training and support of the deliverable, if it is necessary.

Before the signing procedure can take place the supply contract should undergo a performance criteria check and an in-depth review process to make sure all of the necessary information is included in the document by both involved companies.

While the deliverable is the reason for the supply contract, the pricing of it along with any scheduled payment and the invoicing procedure must be clearly stated. This way there is not misunderstandings on the financial end of the contract.

The supply contract is the legal formal document that binds both parties to a financial agreement in which there will be an exchange of merchandise or service for a financial reward. All the necessary details of this contract must be understood and clearly stated in writings so all parties are fully aware of every detail.