Basic Supply Agreement for the United States

Basic Supply Agreement Template for United States

A Basic Supply Agreement is a legally binding contract governed by U.S. commercial law, primarily the Uniform Commercial Code (UCC), that establishes the terms and conditions for the regular supply of goods or materials between two parties. It outlines essential elements including pricing, delivery terms, quality standards, and payment conditions, while ensuring compliance with federal and state regulations. This agreement serves as the foundation for ongoing business relationships in supply chain operations.

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What is a Basic Supply Agreement?

The Basic Supply Agreement is a fundamental commercial contract used to establish and govern ongoing supply relationships between businesses. This document is particularly relevant in the United States, where it must comply with the UCC and various state and federal regulations. It's typically employed when companies need to formalize regular supply arrangements, setting out clear terms for pricing, delivery, quality standards, and risk allocation. The agreement provides essential protection for both suppliers and buyers while maintaining flexibility for long-term business relationships.

What sections should be included in a Basic Supply Agreement?

1. Parties: Identification and details of contracting parties

2. Background: Context and purpose of the agreement

3. Definitions: Key terms used throughout the agreement

4. Supply Obligations: Core obligations regarding product supply, including quantity, specifications, and quality standards

5. Pricing and Payment Terms: Price structure, payment terms, invoicing procedures, and any price adjustment mechanisms

6. Delivery Terms: Delivery schedules, logistics, transfer of risk, and shipping arrangements

7. Warranties and Representations: Product warranties, quality guarantees, and representations by both parties

8. Term and Termination: Duration of agreement, renewal terms, and termination rights

9. Liability and Indemnification: Allocation of risks, limitation of liability, and indemnification obligations

10. Governing Law: Applicable law, jurisdiction, and dispute resolution procedures

What sections are optional to include in a Basic Supply Agreement?

1. Minimum Purchase Requirements: Specific volume commitments and consequences of failure to meet these requirements

2. Exclusivity Provisions: Terms regarding exclusive supply relationships and territorial restrictions

3. Quality Control Procedures: Detailed quality assurance processes, testing requirements, and acceptance criteria

4. Force Majeure: Provisions for handling unforeseen circumstances and their impact on obligations

5. Intellectual Property Rights: Protection and use of intellectual property in the supply relationship

6. Confidentiality: Protection of confidential information exchanged during the supply relationship

What schedules should be included in a Basic Supply Agreement?

1. Schedule A - Product Specifications: Detailed technical specifications and requirements for the products

2. Schedule B - Pricing Schedule: Detailed pricing structure, volume discounts, and price adjustment mechanisms

3. Schedule C - Service Levels: Performance metrics, delivery requirements, and quality standards

4. Schedule D - Quality Control Procedures: Specific quality control processes, testing methods, and acceptance criteria

5. Schedule E - Delivery Locations: List of approved delivery locations and specific delivery requirements

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

Jurisdiction

United States

Publisher

Genie AI

Document Type

Supply Agreement

Cost

Free to use
Clauses
Industries

Uniform Commercial Code (UCC): Primary governing framework for commercial transactions in the US, particularly Article 2 (Sale of Goods) and Article 9 (Secured Transactions). Critical for terms of sale, delivery, warranties, and remedies.

Sherman Antitrust Act and Clayton Act: Federal antitrust laws governing competition and pricing issues in supply agreements to prevent monopolistic practices and unfair competition.

Federal Trade Commission Act: Federal law prohibiting unfair or deceptive trade practices, affecting terms and representations in supply agreements.

Magnuson-Moss Warranty Act: Federal law governing warranties on consumer products, specifying requirements for warranty terms and disclosures.

Robinson-Patman Act: Federal law prohibiting price discrimination between different purchasers of comparable goods.

State-Specific Contract Laws: Various state-level contract laws including state UCC variations, contract formation rules, and warranty laws that may affect the agreement.

CISG: United Nations Convention on Contracts for the International Sale of Goods, applicable to international supply agreements unless explicitly excluded.

Industry-Specific Regulations: Sector-specific regulations such as FDA rules, CPSC regulations, and EPA requirements that may apply depending on the goods being supplied.

Force Majeure Provisions: Legal provisions addressing unforeseeable circumstances preventing contract fulfillment, particularly important post-COVID.

Data Protection Laws: Privacy and data protection regulations that may affect information sharing and confidentiality provisions in the agreement.

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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