Vendor Agreement

A Vendor Agreement regulates purchase orders, delivery requirements, prices, and warranties between a business client and a vendor supplier.

Common Clauses

• Goods description, volume parameters, and quality metrics
• Delivery schedule, shipping terms, and risk allocation
• Price warranties, payment windows, and early payment discounts
• Returns policy for defective goods
• Liability caps and intellectual property infringement warranties

Common Red Flags

• Broad right-to-audit clauses with excessive vendor disruptions
• Automatic renewal terms that lock in vendor pricing without review
• Vague delivery delay penalties that allow client order cancelation without cause
• Lack of clear criteria for rejected goods returns

Questions To Ask Before Signing

• What are the parameters for order reject rates?
• How are shipping delays caused by force majeure handled?
• Are prices fixed, or can they be adjusted for material cost inflation?
• What notice is required to change product specifications?