Negotiating supplier contracts

Once you have decided to do business with a supplier, it is a good idea to document the terms of trade in a written contract. Written agreements with suppliers minimise disagreements about each party's rights and responsibilities.

Remember that if you want to continue doing business with the supplier in the future, you should aim to negotiate outcomes that you're both happy with.

Supplier agreements

Suppliers often have their own written agreements but, if they don't, you should establish them yourself. Written agreements document all the specific details, such as what you want, what you'll get, how much you'll pay and when.

Supplier agreements cover such issues as:

  • supply conditions, including volume, price, discounts, ordering periods, take or pay and delivery times
  • payment terms
  • specifications of goods or services supplied (scope of goods)
  • warranty periods for defective goods or services
  • limited liability (risk of loss or damage)
  • intellectual property
  • confidentiality
  • insurance
  • dispute resolution
  • termination and exclusion clauses.

Make sure a lawyer experienced in supply agreements and terms of trade reviews any documents before you sign and begin any transactions.

Disputes with suppliers

Deal with the dispute promptly. If communication with the supplier has failed, address your concerns with their head office or seek advice from your solicitor or business adviser.

Learn more about the issues involved in resolving disputes and where to lodge complaints.

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