Wednesday, March 28, 2018

16-Supplier Contract

What is a Supplier Contract? : A Supplier Contract or "Supply Contract" is an agreement between a business and an external supplier for the delivery of a defined set of products and services. A Supplier Contract is a legal agreement and is used as the basis upon which to measure the supplier’s performance. In addition to listing the items to be supplied, the Supply Contract states the timeframes, responsibilities, pricing and payment clauses needed to administer the relationship. By putting a Supply Contract in place, it helps you to get the most out of the supplier relationship.

When do I use a Supplier Contract? : A Supplier Contract should be used whenever you need to purchase products or services from an external supplier. By documenting a supply contract, your external suppliers will treat the relationship more seriously. The Supply Contract defines the delivery milestones and therefore the criteria for making payments. So by using a Supply Contract, it will make it easier to manage your suppliers today.

A supply contract should specify :
  • Deliverables to be provided by the supplier
  • Training, documentation and support to be provided
  • Responsibilities of both parties
  • Performance criteria and review process
  • Pricing schedule and invoicing process
  • Contractual terms and conditions