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INTERNATIONAL SUPPLY AGreeMent

1. Denition 2. Parties to the Agreement 3. Main clauses and sample 3.1 Quantities and ordering procedures 3.2 Deliveries risk and ownership 3.3 Prices 3.4 Payment terms 3.5 Claims 4. Applicable Law 5. Model Agreement
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1. DEFINITION This agreement is used for establishing long-term agreements (i.e. one year or more) between a manufacturer (referred to here as the Supplier) and its client (the Buyer) for the supply of products at predetermined prices. Transactions are carried out through regular orders (every month, or every three months, etc.). In the agreement, the minimum and maximum amounts to be supplied are established, as well as a number of alternatives for the adjustment of the price at the end of each year within the term of the agreement.
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2. PARTIES TO THE AGreeMent

Usually both the Supplier and the Purchaser are companies. For each party, the following has to be included: Name of company, full address and nationality. Company type: public limited company, limited liability company, etc. Name and position of company representative who signs the agreement. Tax ID number of both parties.

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3. MAIN CLAUSES AND SAMPLE Some of the most important clauses in the International Supply Agreement are as follows: Quantities and ordering procedures Deliveries risk and ownership Prices Payment terms Claims See sample of International Supply Agreement
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3.1 QUANTITIES AND ORDERING PROCEDURES


The minimum and maximum quantities of Products which the Purchaser will order in each Agreement Year are set out in Annex of this Agreement for the 12 month period commencing on .............. [insert date] and on each anniversary of that date. Products will only be supplied under this Agreement against orders placed by the Purchaser. Each order must be in writing specifying the number and type of Products required and the proposed delivery date(s). Every order must be placed at least ....... [30, 60, 90] days before the delivery date. The Purchaser may vary an order in writing at any time up to ........ [10, 20, 30, 60] calendar days before the rst delivery date specied in the order.
See sample of International Supply Agreement

3.2 DELIVERIES RISK AND OWNERSHIP


The Products will be delivered by the Supplier to the Purchaser at the delivery points specied in the Annex of this Agreement. This may be changed by agreement. When the delivery point is at the premises of the Supplier, the Purchaser will be responsible for collection and loading of Products and will from that point be responsible for insurance of the Products. Where the delivery point is at the premises of the Purchaser or some other location which requires the Supplier to arrange transportation of the Products, the Supplier will be responsible for insurance of Products in transit and responsible for unloading Products from the delivery vehicle at the delivery point.
See sample of International Supply Agreement

3.3 PRICES
Prices of Products at the date of this Agreement are shown in the Annex of the present Agreement. These prices include transportation to the delivery point. Prices will be subject to adjustment at the commencement of each new Agreement Year. Alternative A. A formula to determine new prices is shown in the Annex of the present Agreement. Alternative B. New prices will be adjusted through negotiation and agreement during ....... [1, 2, 3] months before the commencement of the new Agreement Year. In xing any new prices, the Supplier will provide the Purchaser with details of cost increases and other relevant data. Both Parties will act in good faith in these negotiations.
See sample of International Supply Agreement

3.4 PAYMENTS TERMS


Alternative A. The Supplier will invoice the Purchaser at the end of each calendar month for the quantity of Products supplied during the month. Each invoice will show the description, quantity and date of delivery of all Products supplied. Payment will be due ....... [30, 60, 90] calendar days from the invoice date. Alternative B. The Purchaser will establish a revolving letter of credit in favor of the Supplier prior to the rst delivery date for Products under this Agreement. The letter of credit will be on terms acceptable to the Purchaser and will be conrmed by a bank in the Suppliers territory. The letter of credit will be maintained at a value agreed between the Parties as being sufficient to meet the estimated cost of Products due for delivery in each month.
See sample of International Supply Agreement

3.5 CLAIMS
If the Purchaser becomes aware of any claim or potential claim in respect of defective product liability arising from a delivery of any Products it shall immediately inform the Supplier in writing providing all necessary information and documentation to enable the Supplier to take any appropriate action. The Supplier may require the Purchaser to give all reasonable assistance, at the Suppliers cost, to enable the Supplier to defend its reputation. The Purchaser shall not, without the prior written authorization of the Supplier settle any such claim.

See sample of International Supply Agreement

4. ApplicaBle Law

International Law standards are not applied to this type of Agreement. The parties are free to submit any conicts regarding the agreement to International Arbitration or to the Laws of the country of one of the parties. They will normally be subject to the Laws of the Suppliers country.

See sample of International Supply Agreement

5. MODEL AGreeMent

In order to obtain the model agreement in Word format and the user guide, click on: International Supply Agreement

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