Business contracts and agreements

Jurga78

Hi
our business manufactures and sells a product, I wonder if another business wants a long term supply (not for reselling) do we have to have a written agreement of any kind? Or just opening an account for them is enough?

jimmii

Would depend on the scale and if you are willing to offer them a better price if they sign a contract for x years promising orders of y per month etc.

Jurga78

great, thank's jimmii, is it possible to get an example or a template anywhere?

jimmii

No idea i'm sure there is something out there somewhere that will pop up in google!

antoinolachtnai

You have two threads in your question, a commercial and legal one.

The answer to the commercial issue is that you need a firm contract in place if you are going to make your business to any degree dependent on this customer. For example, if you are going to buy extra stock or take on extra staff in order to cater for their needs. Also, if you are giving them a discount on the basis that they will commit to do a certain volume of business with you, or if you are going to commit a long-term price, you need to be sure they actually give you the business and cash that they promised.

The above is the reason why you need a contract that is more sophisticated than just your regular terms and conditions and account-opening.

If you decide you need to do this, then it is really time to talk to a solicitor. This is going to cost some money, but the reality is that it costs money to be in business. You do need to be careful to keep the legal costs in proportion with the actual value of the business.

Downloading a contract from the Internet and getting your customer to sign it is not really enough if you need to be able to bind the customer.

a.

Voltex

Are you looking for purchase commitments OP?
LTA's are a minefield..Id seek advice from a solicitor on this.

Jurga78

Thank's a mill for your time, will get to solicitor , have more than one question anyway.
Have a nice long weekend