A product supply agreement is a legally binding document that outlines the terms and conditions for the sale and purchase of goods between a manufacturer and a buyer. In India, such agreements are essential for companies that operate in the manufacturing and distribution sector.
A product supply agreement can help a manufacturer secure a stable customer base while ensuring that the buyer receives a consistent supply of products. The agreement typically includes details such as quality standards, delivery schedules, pricing, payment terms, dispute resolution mechanisms, etc.
Key provisions of a product supply agreement:
1. Quantity and quality of products to be supplied: The agreement should outline the specific products to be supplied, quantity, and quality standards. The supplier should ensure that the products meet the quality standards agreed upon.
2. Delivery schedule and terms: The agreement should specify the delivery schedule and terms for the products to be supplied. The supplier should ensure that the products are delivered on time and in accordance with the agreed-upon schedule.
3. Pricing and payment terms: The agreement should include the pricing for the products to be supplied and the payment terms. The seller should ensure that the prices are fair and reasonable and that payment is made on time.
4. Intellectual property rights: The agreement should clarify ownership of any intellectual property related to the products to be supplied, such as trademarks, copyrights, and patents.
5. Confidentiality and non-disclosure: The agreement should include provisions for maintaining the confidentiality of any proprietary information shared by either party.
6. Termination and breach: The agreement should specify the conditions under which either party can terminate the agreement and the remedies available in the event of a breach of contract.
In India, product supply agreements are governed by the Indian Contract Act, 1872. It is always advisable to seek legal advice before entering into such agreements to ensure compliance with local laws and regulations.
In conclusion, a product supply agreement is a crucial document for any manufacturer and buyer in India. It not only provides a roadmap for a smooth supply chain but also safeguards the interests of both parties involved.