What is a Vendor Contract?
A vendor contract can be defined as,
“A legally binding piece of document that lists all the details and terms & conditions that two parties agree upon mutually where one party is buying or demands a product or service from the other.”
Format and Components of a Basic Vendor Contract
It is the latter – the provider – who is referred to as the ‘Vendor’ in such scenarios. The terms & conditions include the nature of work to be performed, the commending date & time of the project, the conclusion time & date, the site where the service or product is to be delivered, details of cost & service charges, and (in most cases) a contingency plan for times when things don’t go according to plan or schedule.
In case you are wondering how to write vendor contracts, read on to ensure that you become familiar with all the important elements you need to mention in the agreement to secure yourself.
Also, knowing how to write supplier contracts has pretty much the same guidelines of a vendor contract template. So, let’s get started on the proper technique of drafting a vendor contract.
Guide Tips for Writing Vendor Contracts
- First and foremost, you need to clarify the two parties involved in the contract. You, yourself, will be referred to as the “buyer” or “purchaser” in most cases. The vendor will be referred to as the “supplier” or “provider” in most cases.
- Next step is to clearly indicate the product or service in picture. Be very vivid about the quality, quantity, dimensions, body specifics and other specifications that you want your product or service to have.
- Following this, both the project starting and finishing date need to be clearly mentioned. In case the product or service is to be delivered at frequent intervals, mention the duration of each interval and the delivery date for the same.
- Subsequently, the pricing and payment mode need to be mentioned on this supplier contract. The payment modes can vary from cash, cheque on delivery, or bill to company etc. The pricing must be mutually agreed upon.
- You also want to ensure your confidentiality. For this, both parties need to be very clear on who can be trusted with the details of the contract and who is not to be included (ever).
- Disagreements also need to be elaborated upon in the contract if they arise. In case of disagreement, the contract should specify the nature of legal action that can be initiated by both parties and the circumstances under which such a step can be taken. Furthermore, if a third party is designated as a mediator, mention all the specifics of this third party i.e. name, address etc
- Be sure to mention contingencies in case the product or service cannot be delivered according to the agreed upon time frame or if damages are incurred by any of the parties involved in the contract.
- Towards the end of the contract, mention the circumstances or process through which the contract shall be terminated. Here you would want to mention the rights of each party, and the scenarios that will nullify the contract e.g. disclosure of confidential information.
With the above mentioned guidelines in mind, you should now know the basics of how to write vendor contracts. The quality of your contracts will improve with time and experience; the more you learn the better you become. Once you are smooth with vendor contracts, you can move on to other pieces of legal binding documentation such as how to write catering contracts.