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Supply Agreement
I need a supply agreement for a recurring monthly delivery of raw materials, with a fixed price for the first year and an option to renegotiate annually. The agreement should include terms for quality assurance, delivery timelines, and penalties for late or incomplete deliveries.
What is a Supply Agreement?
A Supply Agreement sets out the terms for selling and buying goods or materials between businesses in the Netherlands. It covers essential details like product specifications, delivery schedules, pricing, and payment terms - creating a clear framework for ongoing business relationships.
Under Dutch contract law, these agreements protect both suppliers and buyers by spelling out quality standards, handling defects, and setting liability limits. They're particularly important in sectors like manufacturing, retail, and food distribution, where consistent supply chains are crucial. Most Dutch companies make these agreements legally binding by including termination clauses and dispute resolution methods that align with local commercial practices.
When should you use a Supply Agreement?
Use a Supply Agreement when your business needs regular deliveries of materials, products, or components from another company. This is especially vital for Dutch manufacturers, retailers, and distributors who rely on consistent supply chains to keep their operations running smoothly.
The agreement becomes essential when dealing with high-value goods, custom-made products, or time-sensitive deliveries. Dutch law strongly favors written contracts for business relationships, particularly when supply disruptions could impact your operations or customer commitments. Having clear terms also helps navigate complex situations like price fluctuations, quality issues, or delivery delays.
What are the different types of Supply Agreement?
- Manufacturing And Supply Agreement: Specialized for custom-made products with detailed manufacturing specifications and quality controls
- Supply Contract Agreement: Basic framework for straightforward product supply relationships
- Labour Supply Agreement: Focuses on temporary workforce provision, including Dutch labor law compliance
- Master Supplier Agreement: Umbrella agreement for multiple supply arrangements with one supplier
- Supply And Installation Agreement: Combines product delivery with installation services and warranties
Who should typically use a Supply Agreement?
- Suppliers/Manufacturers: Companies providing goods or materials, responsible for meeting quality standards and delivery commitments under Dutch commercial law
- Purchasing Companies: Businesses buying products or materials, often through their procurement departments
- Legal Counsel: In-house or external lawyers who draft and review Supply Agreements to ensure Dutch law compliance
- Supply Chain Managers: Oversee implementation and monitor performance against agreement terms
- Quality Control Teams: Verify products meet specifications outlined in the agreement
- Finance Departments: Handle payments, pricing adjustments, and financial compliance aspects
How do you write a Supply Agreement?
- Basic Details: Gather full legal names, addresses, and registration numbers of all parties involved
- Product Specifications: Document exact descriptions, quantities, quality standards, and technical requirements
- Delivery Terms: Define delivery schedules, locations, and Incoterms under Dutch shipping regulations
- Pricing Structure: Outline costs, payment terms, currency, and any price adjustment mechanisms
- Performance Metrics: Set clear quality standards, acceptance criteria, and delivery timelines
- Risk Management: Determine liability limits, insurance requirements, and warranty terms
- Template Selection: Use our platform's Dutch-compliant Supply Agreement template to ensure all legal requirements are met
What should be included in a Supply Agreement?
- Party Details: Full legal names, addresses, and Chamber of Commerce numbers of supplier and buyer
- Product Description: Detailed specifications, quantities, and quality standards under Dutch commercial law
- Delivery Terms: Clear timelines, locations, and responsibility for transport costs
- Payment Provisions: Pricing, payment schedules, and invoicing requirements in compliance with EU regulations
- Quality Controls: Inspection rights, acceptance criteria, and rejection procedures
- Liability Clauses: Risk allocation, warranty terms, and damage limitations
- Termination Rights: Conditions for ending the agreement and notice periods
- Dispute Resolution: Dutch court jurisdiction and applicable law provisions
What's the difference between a Supply Agreement and a Supply Chain Agreement?
While similar in name, a Supply Agreement differs significantly from a Supply Chain Agreement. Let's explore their key differences under Dutch law:
- Scope and Purpose: Supply Agreements focus on direct relationships between a supplier and buyer for specific goods, while Supply Chain Agreements govern broader networks of multiple parties involved in production, storage, and distribution
- Contractual Relationships: Supply Agreements typically involve two parties in a straightforward buyer-seller arrangement, whereas Supply Chain Agreements coordinate multiple stakeholders, including manufacturers, distributors, and logistics providers
- Duration and Flexibility: Supply Agreements often have fixed terms and specific delivery schedules, while Supply Chain Agreements tend to be more flexible frameworks that accommodate changing market conditions
- Risk Management: Supply Agreements focus on product quality and delivery terms, while Supply Chain Agreements address broader operational risks across the entire distribution network
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