What is Vendor Agreement?

Introduction

Vendor Agreement is a legal document which stipulates the provisions regarding the work performed by the vendor. It is a contract which specifies the conditions regarding the performance of certain work. Vendor Agreement can be made for many purposes like office supplies, consultant, technology, services. While negotiating a clear vendor agreement one clearly puts the goals, strategies for cost minimization risk factor.

Meaning

A Vendor Agreement is an Agreement which is made by a business owner who hires a person who will provide specific service or goods as per the requirement. There are various types in vendors agreement as per the requirement. The key points to cover in a Vendors Agreement are date, time & location of service. A Vendor Agreement should get along with the Statement of Work (SoW). A vendor agreement should not comes into operation without Statement of Work (SoW). It becomes enforceable after signing of both the parties.

Points to Remember while Makimg Vendor Agreement

While making a Vendors Agreement both parties should keep following things in mind:

Registration or Notarization

As such Vendors Agreement need not ask for registration or any notarization of any amount on the Stamp Paper.

Requirement of Vendor Agreement

Procedure to make A Vendors Agreement

To make a Vendors Agreement, you just need to follow the two-step procedure:

1. To make a Vendors Agreement both parties should draft the agreement & put all the required clauses.

2. Once the Draft is ready just check the same & finalize & put the signature of both the parties

Important Clauses/Common Facotrs in Vendors Agreement

1) A Clear picture:

There should be proper description is given regarding the product or service which one is required & how much it is required.

2) Payment terms:

There should be proper costing regarding payment how much payment is due, mode of payment, late payment, terms of payment, penalties for late payment

3) Period of functionality:

There should be mention term of operation let us say for how much period the agreement is binding on parties. The period should be fixed at the beginning of time until the completion of the service.

4) Representations & Warranties:

Representations &warranties are important which should be stated in the Agreement.As the vendors should be comfortable with warranties & representations before entering into a contract.

To make a Vendors Agreement both parties should draft the agreement & put all the required clauses.

5) Confidentiality:

If you are providing confidential information to the vendor then clause of confidentiality plays a very pivotal role. As it protects the data from leakage.

6) Exclusivity:

All the vendors should have an exclusive relationship with the business owner as the product is unique & important to the business.

7) Intellectual Property:

When vendors are providing service or product to owners. While dealing in the business it should be only provided to owners. There should not be any other owner to avoid the risk one should get the grant of Intellectual property license.

8) Limited Liability:

In case of vendors, the liability is limited to the cost of services as this is not so good provision in case of agreement. From the perspective of business, if something goes wrong then one should ask for the damages more than the cost of services.

9) Indemnity:

Indemnification means when one party show the interest to bear the losses of other parties under ambiguous circumstances.

10) Insurance:

It is a very common practice in India to get a insurance as to ensure the safety.

11) Relation with parties:

An Agreement should clearly specify the relationship between parties. The vendor should be treated as an independent contractor. No other person can act on his behalf other than himself.

Key clauses to Include in a Vendors Agreement:

Advantages of Vendors Agreement

1. With the help of Vendors Agreement, it specifies the limitation of the vendor.

2. By writing down the business requirements it minimizes the risk for future

3. It states the procedure which the vendor should follow while working

4. It helps to gear up the work

Agreement for E-commerce Industry

Current Account Opening

A current account is a type of deposit account that helps the professionals and businessmen to run their business. Businessmen can avail various benefits by Online Current Account such as:

• Unlimited transactions
• Customized features
• Online banking services

Online current account reduces the hassle and provides the benefit to complete the banking process anytime and anywhere.

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