The International Supply Contract (www.globalnegotiator.com) is used for establishing long-term agreements between a manufacturer (referred to here as the Supplier) and its client (the Buyer) for the supply of products at predetermined prices.

1. INTERNATIONAL SUPPLY CONTRACT
1. Definition
2. Parties to the Contract
3. Main clauses and sample
3.1 Quantities and ordering procedures
3.2 Deliveries risk and ownership
3.3 Prices
3.4 Payment terms
3.5 Claims
4. Law applicable
5. Model Contract
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2. This contract is used for establishing long-term agreements (i.e.
one year or more) between a manufacturer (referred to here as
the Supplier) and its client (the Buyer) for the supply of products
at predetermined prices.
Transactions are carried out through regular orders (every
month, or every three months, etc.). In the contract, the
minimum and maximum amounts to be supplied are established,
as well as a number of alternatives for the adjustment of the
price at the end of each year within the term of the contract.
1. DEFINITION
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3. Usually both the Supplier and the Purchaser are
companies. For each party, the following has to be
included:
• Name of company, full address and nationality.
• Company type: public limited company, limited liability
company, etc.
• Name and position of company representative who signs
the agreement.
• Tax ID number of both parties.
2. PARTIES TO THE CONTRACT
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4. Some of the most important clauses in the International
Supply Contract are as follows:
• Quantities and ordering procedures
• Deliveries risk and ownership
• Prices
• Payment terms
• Claims
3. MAIN CLAUSES AND SAMPLE
See sample of International Supply Contract
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5. “The minimum and maximum quantities of Products which the
Purchaser will order in each Contract Year are set out in Annex of this
Contract for the 12 month period commencing on .............. [insert date]
and on each anniversary of that date.”
“Products will only be supplied under this Contract against orders
placed by the Purchaser. Each order must be in writing specifying the
number and type of Products required and the proposed delivery date(s).
Every order must be placed at least ....... [30, 60, 90] days before the
delivery date. The Purchaser may vary an order in writing at any time
up to ........ [10, 20, 30, 60] calendar days before the first delivery date
specified in the order.”
3.1 QUANTITIES AND ORDERING PROCEDURES
See sample of International Supply Contract

6. 3.2 DELIVERIES RISK AND OWNERSHIP
“The Products will be delivered by the Supplier to the Purchaser at the delivery
points specified in the Annex of this Contract. This may be changed by agreement.”
“When the delivery point is at the premises of the Supplier, the Purchaser will
be responsible for collection and loading of Products and will from that point be
responsible for insurance of the Products.”
“Where the delivery point is at the premises of the Purchaser or some other
location which requires the Supplier to arrange transportation of the Products, the
Supplier will be responsible for insurance of Products in transit and responsible for
unloading Products from the delivery vehicle at the delivery point.”
See sample of International Supply Contract

7. “Prices of Products at the date of this Contract are shown in the Annex of the present
Contract. These prices include transportation to the delivery point.”
“Prices will be subject to adjustment at the commencement of each new Contract Year.
Alternative A. “A formula to determine new prices is shown in the Annex of the present
Contract.”
Alternative B. “New prices will be adjusted through negotiation and agreement during
....... [1, 2, 3] months before the commencement of the new Contract Year. In fixing
any new prices, the Supplier will provide the Purchaser with details of cost increases
and other relevant data. Both Parties will act in good faith in these negotiations.”
3.3 PRICES
See sample of International Supply Contract

8. Alternative A. “The Supplier will invoice the Purchaser at the end of each calendar
month for the quantity of Products supplied during the month. Each invoice will
show the description, quantity and date of delivery of all Products supplied.
Payment will be due ....... [30, 60, 90] calendar days from the invoice date.”
Alternative B. “The Purchaser will establish a revolving letter of credit in favor of
the Supplier prior to the first delivery date for Products under this Contract. The
letter of credit will be on terms acceptable to the Purchaser and will be confirmed
by a bank in the Supplier’s territory. The letter of credit will be maintained at a
value agreed between the Parties as being sufficient to meet the estimated cost of
Products due for delivery in each month.”
3.4 PAYMENTS TERMS
See sample of International Supply Contract

9. “If the Purchaser becomes aware of any claim or potential claim in respect
of defective product liability arising from a delivery of any Products it shall
immediately inform the Supplier in writing providing all necessary information
and documentation to enable the Supplier to take any appropriate action.”
“The Supplier may require the Purchaser to give all reasonable assistance, at
the Supplier’s cost, to enable the Supplier to defend its reputation.
“The Purchaser shall not, without the prior written authorization of the
Supplier settle any such claim.”
3.5 CLAIMS
See sample of International Supply Contract

10. International Law standards are not applied to this type
of Contract.
The parties are free to submit any conflicts regarding the
agreement to International Arbitration or to the Laws of
the country of one of the parties. They will normally be
subject to the Laws of the Supplier´s country.
4. LAW APPLICABLE
See sample of International Supply Contract

11. In order to obtain the model contract in Word format and
the user guide, click on:
International Supply Contract
5. MODEL CONTRACT
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