Without vendors, your business would not have products to sell or supplies to manufacture goods. You need reliable resources and dependable pricing for your company to manage daily operations and minimize the expenses it incurs.
When you choose a vendor and negotiate terms with them, you will typically commit those new terms to writing so that both of you have protection if there’s a dispute in the future. What do most people include in their vendor contracts?
Whether you intend to just make a single, one-time purchase from the vendor or arrange for routine deliveries multiple times a month, it’s important to include the details regarding how frequently the vendor should provide supplies, the amount they should provide each time and the price that you agreed to pay. That way, if there’s ever a disruption or disagreement about what terms you set in the future, everything will be right there in writing for you to reference.
Agreement alteration and termination details
If you want to increase the number of deliveries you receive or the vendor wants to increase the price per unit that they charge, you need an agreement about how to address those changes. If you don’t include these terms in the contract, your vendor might make a delivery and expect you to pay a higher price without telling you ahead of time about the increase.
It’s also important to have rules about the termination of the contract. You might want to include a penalty if your vendor suddenly fails to deliver and leaves you without the materials you need to conduct business. The vendor may also want compensation if you cancel your end of the agreement without due notice because they may have invested in supplies specifically to provide for your company.
Conflict resolution terms
Would you prefer to go to mediation if you and your vendor have a falling out, or do you want to have a sit-down negotiation in the event that there’s a disagreement? Your company and the vendor can agree to a specific process for resolving disagreements that will make it easier for you to preserve your working relationship even after an issue arises.
Being proactive with what you include in your business contract and drafting detailed documents can help you protect your business from the failures of other people and companies.