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Supply Agreement
I need a supply agreement for a Swiss-based company to procure raw materials from a European supplier, with terms including a fixed price for the first year, delivery schedules aligned with our production timelines, and a clause for quality assurance inspections prior to shipment.
What is a Supply Agreement?
A Supply Agreement sets the rules and conditions for delivering goods or materials between a supplier and buyer. Under Swiss contract law, it spells out key details like product specifications, pricing, delivery schedules, and quality standards that both parties must follow.
Good supply agreements protect both sides by clearly stating their rights and obligations. They typically include payment terms, liability limits, and ways to handle delivery problems or quality issues. Swiss companies often add specific clauses about force majeure and compliance with local safety and environmental regulations to ensure smooth, legally sound business operations.
When should you use a Supply Agreement?
Use a Supply Agreement when your business needs a steady, reliable flow of materials or products from suppliers. This is especially important for Swiss manufacturing companies, retailers, or any business that depends on regular deliveries to maintain operations and meet customer demands.
The agreement becomes essential when dealing with high-value goods, critical components, or regulated materials. Swiss law strongly favors detailed written contracts, making Supply Agreements particularly valuable for managing long-term supplier relationships, setting clear quality standards, and protecting both parties if delivery or payment issues arise.
What are the different types of Supply Agreement?
- Framework Supply Agreement: Sets broader terms for multiple future transactions, ideal for ongoing business relationships
- Purchase And Supply Agreement: Combines buying and selling terms in one document, common in Swiss manufacturing
- Supply Contract Agreement: Detailed version for single-supplier arrangements with specific performance metrics
- Supply Of Services Agreement: Specialized for service delivery rather than physical goods
- Material Supply Agreement: Focused on raw materials with quality specifications and testing requirements
Who should typically use a Supply Agreement?
- Manufacturers and Suppliers: Companies providing raw materials, components, or finished products under Supply Agreements, from small Swiss SMEs to large industrial firms
- Purchasing Managers: Corporate buyers who negotiate terms, monitor deliveries, and ensure compliance with supply chain requirements
- Legal Counsel: In-house or external lawyers who draft and review agreements to ensure Swiss legal compliance
- Quality Control Teams: Staff responsible for verifying that supplied materials meet specified standards
- Finance Departments: Teams managing payment terms, invoicing, and financial compliance aspects of supply relationships
How do you write a Supply Agreement?
- Party Details: Gather complete legal names, addresses, and registration numbers of all involved companies
- Product Specifications: Document exact descriptions, quantities, quality standards, and technical requirements
- Delivery Terms: Define timing, locations, packaging requirements, and Incoterms for Swiss shipments
- Payment Structure: Outline prices, payment schedules, currencies, and any volume-based discounts
- Quality Control: Specify inspection procedures, acceptance criteria, and rejection processes
- Risk Management: Consider liability limits, insurance requirements, and warranty terms under Swiss law
What should be included in a Supply Agreement?
- Party Identification: Full legal names, addresses, and registration details of supplier and buyer
- Contract Object: Clear description of goods, quantities, and specifications under Swiss OR Art. 184
- Price Terms: Fixed pricing or calculation methods, currency, and payment schedules
- Delivery Details: Timing, location, transfer of risk, and applicable Incoterms
- Quality Standards: Product specifications, inspection rights, and warranty provisions
- Liability Clauses: Risk allocation, limitation of liability, and force majeure conditions
- Dispute Resolution: Choice of Swiss law, jurisdiction, and arbitration options
What's the difference between a Supply Agreement and a Contract Manufacturing Agreement?
A Supply Agreement differs significantly from a Contract Manufacturing Agreement in several key aspects under Swiss law. While both deal with business production relationships, their scope and obligations vary considerably.
- Primary Focus: Supply Agreements mainly cover the delivery of existing products or materials, while Contract Manufacturing Agreements involve custom production to specific requirements
- Quality Control: Supply Agreements typically have simpler quality standards for standardized goods, whereas Contract Manufacturing Agreements include detailed manufacturing processes and specifications
- Intellectual Property: Contract Manufacturing Agreements usually contain extensive IP protection clauses, while Supply Agreements rarely need complex IP provisions
- Duration and Flexibility: Supply Agreements often allow more flexible ordering and delivery terms, while Contract Manufacturing Agreements typically require longer-term commitments due to setup costs and specialized production
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