Vendor Agreement Template for Pakistan

A Vendor Agreement spells out the terms between a business and its suppliers in Pakistan, covering everything from delivery schedules to payment terms. It protects both parties by clearly stating what each side must do, including quality standards, pricing, and confidentiality requirements under local commercial laws.

Pakistani businesses use these agreements to manage their supply chains effectively while following regulations like the Contract Act of 1872. The document becomes especially important when dealing with international vendors, as it helps navigate import duties, customs requirements, and ensures compliance with the State Bank of Pakistan's foreign exchange rules.

Use a Vendor Agreement when starting any significant supplier relationship in Pakistan, especially for regular purchases of goods or services worth over PKR 500,000. This document becomes essential before sending advance payments, sharing confidential information, or beginning long-term supply arrangements.

The agreement proves particularly valuable when sourcing critical materials, dealing with international suppliers, or establishing exclusive distribution rights. Pakistani businesses need it to protect against supply chain disruptions, ensure compliance with local procurement laws, and create clear dispute resolution mechanisms—especially important given the time-consuming nature of commercial litigation in Pakistani courts.

• Vendor Service Agreement: Focuses on ongoing services like maintenance or consulting, with detailed SLAs and performance metrics
• Retail Vendor Agreement: Tailored for store suppliers, covering merchandising, returns, and shelf-space requirements
• Third Party Vendor Contract: Used when vendors work with end customers directly, including liability provisions and brand guidelines
• Vendor Managed Inventory Agreement: For suppliers who maintain stock levels at client locations
• Vendor Commission Agreement: Structures performance-based compensation for sales agents or distributors

• Procurement Managers: Lead the drafting process and negotiate terms with suppliers, ensuring alignment with company purchasing policies
• Legal Counsel: Review and refine Vendor Agreements to protect company interests and ensure compliance with Pakistani contract laws
• Suppliers/Vendors: Provide goods or services under the agreement's terms, including quality standards and delivery timelines
• Finance Teams: Handle payment schedules, verify invoices, and ensure compliance with tax regulations
• Operations Managers: Oversee day-to-day implementation and monitor vendor performance against agreed metrics
• Company Directors: Sign off on major agreements and bear ultimate responsibility under Pakistani corporate law

• Vendor Details: Gather complete business registration, NTN number, and contact information of authorized representatives
• Scope Definition: Outline specific products/services, quantities, quality standards, and delivery schedules
• Payment Terms: Document pricing, payment methods, and schedules that comply with State Bank regulations
• Performance Metrics: Set clear KPIs, quality benchmarks, and reporting requirements
• Compliance Check: Verify vendor's licenses, permits, and tax documentation
• Risk Assessment: Consider confidentiality needs, liability limits, and dispute resolution preferences
• Document Generation: Use our platform to create a legally-sound agreement that includes all essential elements

• Party Information: Complete legal names, addresses, and registration numbers of both vendor and purchaser
• Contract Scope: Detailed description of goods/services, specifications, and delivery terms
• Payment Terms: Price, payment schedule, and currency as per State Bank guidelines
• Duration & Termination: Contract period, renewal options, and exit conditions
• Confidentiality: Protection of trade secrets and business information
• Dispute Resolution: Choice of Pakistani courts and applicable local laws
• Force Majeure: Events excusing performance under Pakistani contract law
• Signatures: Authorized signatories with company stamps as required by local practice

A Vendor Agreement differs significantly from an Agency Agreement in several key aspects, though both deal with business relationships. While a Vendor Agreement focuses on the direct supply of goods or services, an Agency Agreement establishes a relationship where one party represents another in business dealings.

• Legal Authority: Agency Agreements grant the agent power to act on behalf of the principal, while Vendor Agreements simply establish a buyer-seller relationship
• Scope of Responsibility: Vendors deliver specific products or services, whereas agents negotiate deals and manage relationships with third parties
• Compensation Structure: Vendor Agreements typically specify fixed prices for goods/services, while Agency Agreements often include commission-based payments
• Fiduciary Duties: Agents owe strict fiduciary duties under Pakistani law, but vendors only need to meet contractual obligations
• Liability Framework: Agents can legally bind their principals, while vendors cannot commit their buyers to third-party obligations