Effective vendor and supplier agreements provide predictability, allocate risk, and preserve cash flow by clarifying payment terms and delivery obligations. They also create mechanisms for quality control, limit liability through indemnities and limitation clauses, and establish remedies that reduce costly disputes and interruptions to operations when suppliers underperform or fail to deliver.
Clear performance metrics, defined remedies, and dispute resolution procedures reduce the likelihood and cost of disagreements. Well-drafted contracts encourage early resolution through structured notice and cure periods, which helps avoid protracted litigation and business disruption.
Our firm brings transactional and litigation perspectives to contracting, drafting agreements that are commercially viable and defensible in disputes. We prioritize clarity, enforceability, and alignment with corporate policies to support smooth operations and risk management.
When circumstances change, we negotiate amendments and manage dispute resolution procedures, including mediation or litigation strategies if necessary, with a focus on economical solutions that preserve business continuity and value.
Every vendor agreement should include a precise description of goods or services, clear delivery and acceptance criteria, payment terms, warranties, indemnities, limitation of liability, confidentiality, and dispute resolution procedures. Together these clauses define expectations and create enforceable remedies that protect both parties. Including termination rights, cure periods, and insurance requirements further protects operations by enabling corrective actions or orderly exits. Tailoring these clauses to the industry and procurement model ensures practical enforceability and alignment with regulatory obligations.
Liability can be limited through carefully drafted limitation of liability clauses that cap damages and exclude certain categories of consequential losses. These provisions should be balanced to maintain commercial fairness while preventing exposure that could threaten your company’s finances. Combining liability caps with appropriate indemnities, insurance requirements, and warranty limits creates layered protection. Ensure caps are reasonable relative to contract value and that carve-outs exist for intentional wrongdoing or gross negligence where necessary under applicable law.
Address repeated missed deliveries by enforcing contractual remedies such as late delivery damages, performance bonds, or step-in rights for critical supplies. Notice and cure provisions give the supplier an opportunity to remedy issues while documenting breaches that may justify termination. If problems persist, consider renegotiating terms, pursuing substitute sourcing, or invoking termination for cause with transition assistance. Documenting performance issues and following contract dispute resolution clauses preserves your position for possible remedies or litigation.
Yes, supplier agreements can and should address ownership and licensing of intellectual property developed during performance. Clauses should specify whether IP is assigned to the buyer, licensed for specific uses, or retained by the supplier, with clear definitions and scope limitations. Addressing IP also includes confidentiality obligations, restrictions on use, and warranties of non-infringement. For work-for-hire arrangements, express assignment language avoids later disputes over ownership and supports commercialization and protection of proprietary assets.
Requiring insurance is appropriate when supplier activities expose your business to third-party claims, property damage, or professional liabilities. Typical requirements include commercial general liability, product liability, and cyber liability as applicable, with specified policy limits and endorsements. Insurance provides financial backstop for losses and supports claims handling. Ensure certificates of insurance, additional insured endorsements, and notice provisions are included to verify coverage and maintain rights to defend or be indemnified under relevant policies.
Force majeure clauses excuse performance when unforeseen events outside a party’s control prevent contractual obligations. Well-drafted clauses identify covered events, require timely notice and mitigation, and specify consequences such as suspension of obligations or termination after prolonged disruption. These clauses should be tailored to your business risks and can include pandemic, supply chain failure, labor strikes, or governmental actions. Clear notice and mitigation duties help preserve the party’s rights and limit opportunistic claims during widespread disruptions.
Small businesses benefit from standardized templates for routine transactions to save time and ensure consistency, but should use custom agreements for higher-value or complex deals that carry greater risk. Templates should be reviewed periodically to confirm they reflect current law and business practices. A hybrid approach works well: standardized core terms with modular clauses that can be customized for specific procurements. Legal review of templates ensures they protect business interests while remaining practical for procurement workflows.
Supplier agreements should be reviewed when major changes occur such as pricing shifts, regulatory changes, supplier performance issues, or business expansions. Regular reviews every one to two years help ensure terms remain current with operational and legal developments. Periodic review also provides an opportunity to consolidate contracts, update insurance and compliance requirements, and implement lessons learned from disputes or supply chain challenges to strengthen future performance.
Common remedies for defective goods include repair, replacement, price reduction, or refund, often governed by specified warranty procedures and timeframes. Contracts should define acceptance testing and rejection procedures to streamline dispute resolution. For breaches of warranty, contractual limitations on remedies and damage caps may apply. Including clear timelines for notice, inspection, and cure helps preserve rights and expedites resolution through contractual processes or negotiated settlements.
Transitioning to a new supplier requires coordinated termination and onboarding provisions to ensure continuity. Include supplier cooperation clauses, knowledge transfer obligations, and phased transition plans to minimize operational disruption and protect inventory and customer commitments. Document inventory reconciliation, data transfers, and outstanding warranty or indemnity responsibilities. Close oversight during the transition and clear contractual obligations help avoid service interruptions and limit the risk of disputes with the outgoing supplier.
