Nearly every business at some point or another must rely on an outside vendor for certain products or services, whether it is simple office supplies, or a product that is integral to providing your own product or service.
Particularly when you are dependent on a vendor for something that is vital to your operation, it is essential that you have rock-solid vendor agreements in place to ensure that your company’s interests are protected and that you always have recourse should the vendor not live up to your expectations.
Without strong vendor agreements, you could find yourself stuck with poor quality goods or materials, or even slapped with a lawsuit yourself just for protecting your business interests from a bad vendor.
Below we’ve detailed four essential components to any vendor agreement. Please keep in mind that this blog does not constitute legal advice for your specific situation, and that the contents of any contract will vary based on your circumstances and the needs and goals of all parties involved.
1) Who?
Your vendor agreement should specify the “who” of your relationship with the vendor. Who exactly is buying the goods or services, and who exactly is supplying them? As with nearly all aspects of a contract, be very specific and clear about who is party to your vendor agreement.
2) What?
What exactly is the vendor expected to supply? You can dictate exactly what you are entitled to receive from your relationship with the vendor, and you can also set standards and expectations for things like quality. Detailing the product that the vendor is to supply will give you recourse should the vendor fail to provide you with what you need or should the vendor fail to fulfill expectations about the product that were detailed in the agreement.
3) When?
When will the product or service be provided? This aspect of a vendor agreement should detail when exactly you will receive the product, set schedules for recurring delivery of the product, if any, set standards for timeliness of the delivery, and detail how long the agreement will be in effect.
4) How?
Your vendor agreement should explain exactly how you are to receive the product? Will the vendor be delivering it directly to you, or will you have to go and get it yourself? If the vendor is providing a service, how exactly will they do that? There are numerous details that need to be explained in the “how” of your vendor agreement, and rarely are any details too small to exclude.
Vendor agreements provide an important layer of protection for any company that relies on a vendor for some sort of product or service. Before entering into any agreement with a vendor, please contact Integrated General Counsel and let us ensure that your business interests are protected.
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