Sole Supply Agreement Template for Philippines

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Key Requirements PROMPT example:

Sole Supply Agreement

"I need a Sole Supply Agreement for my tech manufacturing company based in Manila to be the exclusive supplier of electronic components to a major automotive parts distributor in the Philippines, with the agreement starting March 2025 and including strict quality control measures and quarterly minimum purchase commitments."

Document background
The Sole Supply Agreement is a critical commercial contract used when businesses in the Philippines seek to establish exclusive supply arrangements, ensuring a reliable and controlled supply chain. This document is particularly relevant in the Philippine market where businesses often need to secure consistent supply sources while complying with local competition laws and commercial regulations. The agreement typically includes detailed provisions on exclusivity rights, minimum purchase commitments, quality standards, pricing mechanisms, and compliance with Philippine regulations. It's commonly used in various industries from manufacturing to retail, and can be adapted to both domestic and international trade relationships, provided they operate within Philippine jurisdiction. The document becomes especially important when businesses need to establish long-term, exclusive supply relationships while ensuring compliance with the Philippine Competition Act and other relevant local legislation.
Suggested Sections

1. Parties: Identification of the supplier and buyer, including full legal names, registration details, and addresses

2. Background: Context of the agreement, relationship between parties, and purpose of entering into the sole supply arrangement

3. Definitions: Detailed definitions of key terms used throughout the agreement

4. Appointment and Exclusivity: Terms of exclusive appointment, territorial scope, and any exceptions to exclusivity

5. Supply Obligations: Supplier's obligations regarding product supply, minimum quantities, and delivery terms

6. Purchase Obligations: Buyer's obligations including minimum purchase commitments and forecasting requirements

7. Product Specifications: Requirements for product quality, compliance with standards, and any certification requirements

8. Pricing and Payment: Price determination, payment terms, invoicing, and any price adjustment mechanisms

9. Ordering and Delivery: Process for placing orders, lead times, delivery terms, and acceptance procedures

10. Quality Control: Quality assurance processes, testing procedures, and handling of non-conforming products

11. Term and Termination: Duration of agreement, renewal terms, and grounds for termination

12. Intellectual Property: Rights and restrictions regarding use of trademarks, patents, and other IP

13. Confidentiality: Protection of confidential information and trade secrets

14. Force Majeure: Provisions for handling events beyond parties' reasonable control

15. Governing Law and Dispute Resolution: Choice of Philippine law and dispute resolution mechanisms

16. General Provisions: Standard boilerplate clauses including notices, amendments, and assignment

Optional Sections

1. Marketing and Promotion: Include when the agreement requires specific marketing commitments or brand promotion activities

2. Storage and Warehousing: Add when specific storage requirements or warehousing obligations need to be detailed

3. Insurance Requirements: Include when specific insurance coverage needs to be maintained by either party

4. Environmental Compliance: Add for products requiring specific environmental handling or compliance

5. Training and Support: Include when supplier must provide training or technical support

6. Product Development: Add when parties will collaborate on product development or customization

7. Import/Export Compliance: Include for international supply arrangements requiring customs compliance

8. Recall Procedures: Add for products that may require recall procedures

9. Data Protection: Include when personal data processing is involved in the supply arrangement

Suggested Schedules

1. Schedule 1 - Product Specifications: Detailed technical specifications of products covered by the agreement

2. Schedule 2 - Pricing Schedule: Detailed pricing structure, including any volume discounts or pricing mechanisms

3. Schedule 3 - Minimum Purchase Quantities: Specific quantities the buyer commits to purchase over defined periods

4. Schedule 4 - Quality Standards: Detailed quality requirements and testing procedures

5. Schedule 5 - Territory Definition: Detailed description of geographical territory covered by exclusivity

6. Schedule 6 - Service Level Agreement: Specific performance metrics and service levels to be maintained

7. Schedule 7 - Approved Sub-contractors: List of approved sub-contractors or manufacturers if applicable

8. Appendix A - Order Form Template: Standard form for placing orders under the agreement

9. Appendix B - Delivery Protocol: Detailed procedures for delivery and acceptance of products

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions
Clauses
Relevant Industries

Manufacturing

Retail

Food and Beverage

Electronics

Automotive

Pharmaceuticals

Consumer Goods

Industrial Equipment

Technology

Agriculture

Chemicals

Textiles

Construction Materials

Relevant Teams

Legal

Procurement

Supply Chain

Operations

Commercial

Compliance

Quality Assurance

Business Development

Finance

Risk Management

Relevant Roles

Procurement Manager

Supply Chain Director

Legal Counsel

Commercial Director

Operations Manager

Contract Manager

Business Development Manager

Purchasing Officer

Vendor Relations Manager

Chief Operating Officer

Sourcing Manager

Quality Assurance Manager

Compliance Officer

General Manager

Chief Legal Officer

Industries
Philippine Civil Code (Republic Act No. 386): Fundamental law governing contracts, obligations, and commercial relationships in the Philippines. Particularly relevant are Book IV on Obligations and Contracts, and Book V on Commercial Transactions.
Philippine Competition Act (Republic Act No. 10667): Regulates anti-competitive agreements and practices. Critical for sole supply agreements to ensure they don't constitute prohibited vertical restraints or abuse of dominant market position.
Consumer Act of the Philippines (Republic Act No. 7394): Protects consumer interests and establishes standards for business practices, particularly relevant if the supply chain ultimately affects consumer goods.
Price Act (Republic Act No. 7581): Regulates pricing practices and prohibits illegal price manipulation, which could be relevant in exclusive supply arrangements.
Electronic Commerce Act (Republic Act No. 8792): Relevant if the agreement involves electronic transactions or digital documentation in the supply chain.
Code of Commerce of the Philippines: Contains provisions governing commercial transactions and merchant relationships, particularly relevant for business-to-business arrangements.
Intellectual Property Code (Republic Act No. 8293): Important if the supply agreement involves licensed products, trademarks, or other intellectual property rights.
Corporate Code of the Philippines (Batas Pambansa Bilang 68): Relevant for understanding the legal capacity of corporate entities to enter into sole supply arrangements.
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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