How You Should Be Using Vendor Agreement Forms

Note: Want to skip the guide and go straight to the free templates? No problem - scroll to the bottom.
Also note: This is not legal advice.

Introduction

Vendor agreements are a vital part of any business relationship, but many business owners and entrepreneurs often neglect to properly address them. Without a well-crafted written agreement between a business and its vendor, there is an increased risk of the vendor taking advantage of the company, potentially leading to legal issues down the line.

The Genie AI team strongly believes that such agreements are essential for protecting both the interests of the business and its vendors. Not only do they shield businesses from potential problems that might arise from vendors not delivering services or goods as stipulated in their contracts, but also outline clearly the rights and responsibilities of each party involved.

When composing a vendor agreement form, it’s important to include certain key elements. This includes a comprehensive description outlining what services or goods will be provided, when payment should be made by, delivery timelines and other pertinent details. Furthermore, provisions for dispute resolution - such as mediation or arbitration - should be included where applicable and there should always be a clear clause outlining when either party can terminate the arrangement as well as any associated penalties that may occur thereafter due to this action being taken.

In terms of indemnification - which protects businesses from claims or liabilities resulting from their vendors’ actions - this is particularly crucial if services are being supplied by said vendor; in this instance ensuring companies aren’t held accountable for mistakes made by third parties connected with them through contractual obligations. Also necessary is ensuring that any alterations to agreements should always remain documented in writing with signatures from both parties before they become legally binding.

Vendor agreements are irreplaceable components of enterprise relationships; they protect all those involved so must not be overlooked lightly! To ensure protection on all parts concerned these documents require precision when drafting up so it’s why The Genie AI Team vitally suggest using our free community template library which assists you in forming high quality legal documents without having to hire an expensive lawyer! With millions datapoints teaching our AI what constitutes market-standard forms you can now generate accurate documents swiftly at your convenience – so read on below for more step-by-step tips on how you can access them today!

Definitions (feel free to skip)

Scope of Agreement: The range and limits of what is covered by the agreement.
Responsibilities: Tasks or duties that the vendor is expected to complete.
Payment: The exchanging of money for services or goods.
Duration: The period of time that the agreement is in effect.
Dispute Resolution: A process used to settle disagreements between two or more parties.
Arbitration: A process in which an impartial third party decides how to resolve a dispute.
Confidentiality Clause: A clause that requires parties to keep certain information private.
Intellectual Property: Creative works or ideas that are legally protected by copyright, patent, or trademark laws.
Force Majeure Clause: A clause that outlines how certain unexpected events (such as natural disasters) will be handled.
Warranties: A guarantee that services or goods will meet certain standards.

Contents

• Define the scope of the agreement, including services and goods to be provided by the vendor
• Identify the exact services to be completed by the vendor
• Outline any goods to be provided by the vendor
• Establish the vendor’s responsibilities and the business’s expectations
• Describe the vendor’s duties
• Set out the business’s expectations
• Set out details regarding payment, including
• Amounts
• Due dates
• Applicable taxes and fees
• Specify the length of the agreement
• Set the duration of the agreement
• Address renewal terms
• Outline termination procedures
• Provide for dispute resolution and arbitration
• Define the process for dispute resolution
• Outline a plan for arbitration
• Include a confidentiality clause
• Set out a confidentiality clause
• Describe any applicable exceptions
• Set out the ownership of any intellectual property created by the vendor during the course of the agreement
• Include a force majeure clause
• Provide any applicable warranties
• Address any additional terms, conditions or provisions
• Establish a signature block for all parties to sign
• Make copies of the agreement for all parties to keep on file

Get started

Define the scope of the agreement, including services and goods to be provided by the vendor

• Clearly define the scope of the agreement, such as the services and goods to be provided by the vendor
• List out the specific services and goods that the vendor is to provide
• Make sure that the vendor understands the scope of the agreement and can meet the requirements
• Include details of the payment plan, including when payments will be made and the value of each payment
• Include a timeline of when the services/goods will be provided, including any deadlines
• Once the scope of the agreement has been thoroughly defined, you can move onto the next step.

Identify the exact services to be completed by the vendor

• Take the scope of the agreement outlined in the previous step and break it down into the specific services that need to be completed by the vendor
• Make sure to list out all the services that need to be done in detail, and provide a timeline for when they need to be completed
• If the service is something that needs to be completed in phases, list out each phase and when it needs to be completed
• For each service, include a list of the deliverables that will be expected from the vendor
• When you are finished, you should have a clear list of all the services that will be completed by the vendor
• Check off this step from your list when you have finalized the services that need to be completed by the vendor.

Outline any goods to be provided by the vendor

• List out all of the goods that will be provided by the vendor, such as raw materials, equipment, or products
• Specify the quantity, quality, and price of each item the vendor will provide
• Include any additional details on the goods that are important to the agreement
• Make sure to double check that all goods included in the agreement are accurately represented
• Once all goods have been listed and specified, you can check this off your list and move on to the next step

Establish the vendor’s responsibilities and the business’s expectations

• Clearly state the responsibilities of the vendor and the expectations of the business in the agreement form
• Ensure that both parties are aware of the scope of the work and the services that the vendor is expected to provide
• Define what type of performance is expected from the vendor and the timeframe in which it is expected to be completed
• Specify the expectations in regards to quality assurance and customer satisfaction
• Include details on the pricing of services and the payment terms
• Check that the agreement form has been read and signed by both parties
• Once you have completed this step, you can move on to the next step which is describing the vendor’s duties.

Describe the vendor’s duties

• Outline the specific tasks, services, or products that the vendor must provide
• List the timeframe for the vendor to complete their duties
• Clearly define the quality of the services or products that the vendor must provide
• Indicate any additional expectations the business may have from the vendor

Once you have listed out the duties, services, and products that the vendor must provide, you can check this off your list and move on to the next step.

Set out the business’s expectations

• Make sure all expectations are reasonable, clear and measurable
• Provide details about services the vendor will be expected to provide
• Outline any quality standards the vendor must adhere to
• Specify any deadlines for services to be completed
• Set out any other expectations the vendor should be aware of
• Check that you have included all the necessary details
• Once you have completed this step, move on to the next step of setting out details regarding payment.

Set out details regarding payment, including

• Decide on the payment method: Is it cash, check, bank transfer or some other form of payment?
• Decide on the payment schedule: Is it a one-time payment or a regular schedule?
• Set out the payment terms: Is it due on delivery or a specific date?
• Decide on the payment amount: How much is the vendor being paid?
• Include any other necessary details about the payment process.

You can check this off your list once you have determined the payment method, schedule, terms, and amount, as well as any other necessary details about the payment process and have included them in the vendor agreement form.

Amounts

• Make sure to include the details of any costs associated with the services provided by the vendor, including any applicable taxes or fees.
• List the total cost for the services provided by the vendor as well as the breakdown of all associated costs.
• Specify a payment schedule if applicable, including any down payments or deposits required.
• When all of the above information has been filled out, you can check off this step and move on to the next!

Due dates

• Set deadlines for both sides to agree upon and sign off on the vendor agreement form
• Include due dates for payment and delivery of goods or services
• Make sure to include penalties for late payments or missed deadlines
• Once the due dates are agreed upon, both parties should sign off on the vendor agreement form and keep a copy for reference
• Check off this step when all due dates have been agreed upon and the vendor agreement form has been signed off on by both parties.

Applicable taxes and fees

• Identify which taxes and fees are applicable to your vendor agreement.
• Include any applicable taxes and fees in the agreement.
• Indicate any taxes and fees that are the responsibility of the vendor.
• Specify when taxes and fees are due and how they should be paid.
• Include any applicable tax exemption information in the agreement.
• Review the agreement and make sure all applicable taxes and fees have been taken into account.

Once you have identified and outlined all applicable taxes and fees in the agreement, you can check this step off your list and move on to the next step.

Specify the length of the agreement

• Decide on the length of the agreement, based on how long the vendor’s services will be required
• Choose between a one-time vendor agreement or a longer contract
• Specify the exact start and end dates of the agreement in the document
• Include an automatic renewal clause if applicable
• When you are satisfied with the length of the agreement, you can check this step off your list and move on to setting the duration of the agreement.

Set the duration of the agreement

• Decide on the start date of the agreement and the length of time it will be in effect
• Specify the exact duration of the agreement in the vendor agreement form
• Include the date and signature of both parties when the agreement is finalized and signed
• When complete, ensure both parties have a copy of the agreement
• Verify that both parties have agreed to the duration of the agreement and that the start and end dates are accurate
• When everything looks good and has been signed, you can check this off your list and move on to the next step!

Address renewal terms

• Decide whether you want the agreement to automatically renew at the end of the set duration
• Specify any conditions that must be met for the agreement to automatically renew
• Set the renewal terms for any automatic renewals
• Include a clause that allows either party to terminate the agreement at the end of the set duration
• Specify any conditions that must be met for either party to terminate the agreement at the end of the set duration
• Make sure to include a clause that allows either party to terminate the agreement with or without cause

You’ll know you can check this off your list and move on to the next step once you have detailed the renewal terms, specified any conditions for automatic renewal or termination, and included a clause that allows either party to terminate the agreement with or without cause.

Outline termination procedures

• Establish clear language on how the agreement can be terminated and under what conditions
• Specify a timeline for the termination process
• Clearly state the consequences of terminating the agreement
• Decide which party is responsible for notifying the other of a termination
• Include a clause that outlines the rights and obligations of each party upon termination
• Make sure all signs of termination are included in the agreement

You can check this off your list and move on to the next step once you have clearly outlined the termination procedures, including who is responsible for notifying the other party, the timeline, and the consequences of termination.

Provide for dispute resolution and arbitration

• Identify how disputes will be resolved, including if a mediator, arbitrator, or other third party will be used
• State the jurisdiction in which any dispute will be heard
• Outline any dispute resolution procedures that must be followed
• Specify the timeline for dispute resolution
• Include a clause that requires all parties to keep confidential any information disclosed during the dispute resolution process
• Once you have provided for dispute resolution and arbitration, check it off your list and move on to the next step: Defining the process for dispute resolution.

Define the process for dispute resolution

• Establish a plan for dispute resolution with your vendor.
• Include details about the roles and responsibilities of both parties in the resolution process.
• Specify which questions or issues will be handled in an arbitration setting and which ones can be handled directly between the two parties.
• Make sure that the plan is included in the vendor agreement form.
• When the dispute resolution plan has been established and included in the vendor agreement form, the step is complete.

Outline a plan for arbitration

• Determine how the arbitration will be conducted (e.g. in-person or through video conference)
• Select an arbitration venue and/or provider
• Specify who will be responsible for paying the costs associated with arbitration
• Outline the applicable rules of arbitration, such as the applicable law
• Establish the procedure for selecting an arbitrator
• Include any other relevant details and/or instructions related to the arbitration process

Once you’ve completed the above steps, you’ll be able to move on to the next step of including a confidentiality clause in the vendor agreement form.

Include a confidentiality clause

• Ensure that the vendor agrees to keep confidential all information related to your business and the services they are providing
• Make sure that the vendor agrees not to share your confidential information with any third parties unless they have prior written consent
• Include a clause in the agreement that states the vendor will not use any of the confidential information for any purpose other than the services they are providing for you
• Specify the types of information that are considered confidential and the period of time that the clause applies for
• Make sure that the vendor agrees to return all confidential information to you upon the termination of the agreement
• Once you have included a confidentiality clause in your vendor agreement, you can check this off your list and move on to the next step.

Set out a confidentiality clause

• Clearly state that the vendor is obligated to keep confidential any proprietary or sensitive information they may receive from you or your business
• Explain what confidentiality covers, such as trade secrets, financial information, pricing, and other non-public information
• Specify the period of time that the confidentiality clause will remain in effect
• Make sure to include a provision that allows you to terminate the agreement if the vendor breaches their confidentiality obligations
• Make sure to include a clause that states that the vendor will not use the confidential information for any purpose other than performing the services agreed upon
• When you are satisfied that you have addressed confidentiality obligations in the agreement, you can check this step off your list and move on to the next step.

Describe any applicable exceptions

• Determine any exceptions to the general terms outlined in the vendor agreement
• Consider any exceptions to the confidentiality clause, such as permissive disclosure of confidential information to other parties
• Make sure to include any exceptions to the ownership of intellectual property, such as the vendor retaining ownership of any existing intellectual property created prior to the agreement
• Document any and all exceptions in the vendor agreement
• Review the agreement with the vendor to ensure all exceptions are mutually agreed upon and both parties sign off on the agreement
• Once you have documented and reviewed all applicable exceptions, you can move on to the next step.

Set out the ownership of any intellectual property created by the vendor during the course of the agreement

• Make sure that the vendor agreement form includes a clause that outlines the ownership of any intellectual property created by the vendor during the course of the agreement.
• Ensure that the clause addresses the ownership of any work produced, including any copyrights, patents, trademarks, or other proprietary rights.
• Ensure that the clause clarifies who is responsible for registering any intellectual property rights that may be required.
• Make sure that the clause outlines the ownership of any intellectual property created by the vendor prior to the agreement, as well as any intellectual property created during the course of the agreement.
• Make sure that the clause outlines the ownership of any intellectual property created by employees of the vendor while they are working on the project.
• Ensure that the clause outlines the ownership of any intellectual property created by subcontractors of the vendor while they are working on the project.
• Make sure that the clause outlines the ownership of any intellectual property created by third parties while they are working on the project.
• Outline any restrictions on the use of any intellectual property created during the course of the agreement.
• When the clause is complete, add it to the vendor agreement form.

You’ll know that you can move on to the next step when you have added the clause to the vendor agreement form.

Include a force majeure clause

• Determine what type of force majeure clause should be included in the vendor agreement form. This will depend on the scope and type of the agreement.
• Draft the force majeure clause in a way that will ensure that the vendor is not liable for any delays or breaches of the agreement due to an event outside of the vendor’s control.
• Ensure that the clause clearly outlines the conditions under which the force majeure clause will be applied and what remedies are available to both the vendor and the customer if an event outside of the vendor’s control does occur.
• Include a provision that allows either party to terminate the agreement if the force majeure event lasts longer than a specified period.

You’ll know that you can check this off your list and move on to the next step once you have drafted the force majeure clause and included it in the vendor agreement form.

Provide any applicable warranties

• Review any warranties that your business offers to customers in a vendor agreement form
• Ensure that all relevant warranties are included in the form
• Specify the duration of the warranties in the form
• Describe the scope of each warranty being offered
• Note any exclusions to the warranties
• Check that you have provided the customer with a copy of the warranties
• When you have reviewed the warranties in the agreement, you can check this step off your list and move on to addressing any additional terms, conditions or provisions.

Address any additional terms, conditions or provisions

• Identify any additional terms, conditions or provisions to include in the agreement. These should be relevant to the agreement and must be acceptable to both parties.
• Specify how any dispute regarding the agreement shall be resolved. This could be through arbitration or mediation, or through a court of law.
• Outline any additional rights and responsibilities that will be assumed by each party.
• Include a clause outlining the legal implications of any breach of the agreement.
• Make sure to provide any additional information that is required by law.
• Once all the additional terms, conditions or provisions have been added to the agreement, you can check this off the list and move on to the next step: Establishing a signature block for all parties to sign.

Establish a signature block for all parties to sign

• Include a designated area for all parties to sign and date the agreement
• Make sure to include enough space for each party to sign and date the agreement
• Obtain signatures from the vendor and all other relevant parties
• Ensure all signatures are obtained from authorized representatives
• Once all signatures have been obtained, you can check this step off your list and move on to the next step.

Make copies of the agreement for all parties to keep on file

• Make copies of the agreement for all parties to keep on file.
• Make sure that each party has a hard copy of the agreement.
• Additionally, you should keep an electronic copy of the agreement for your own records.
• Once all parties have a hard copy of the agreement, you can check this step off your list and move to the next step.

FAQ:

Q: Is a Vendor Agreement Form applicable to UK jurisdictions?

Asked by John on 2nd January 2022.
A: Yes, Vendor Agreement Forms are applicable to UK jurisdictions, as long as the terms and conditions of the agreement meet the UK’s legal requirements. It is important to ensure that all relevant information is included in the agreement, such as the duration of the contract, the responsibilities of each party, and the payment terms. In addition, it is important to check that any specific clauses included in the agreement are enforceable under UK law. It is also advisable to seek professional legal advice when drafting or reviewing a Vendor Agreement Form, as there may be important considerations specific to your sector or business model.

Q: Can I use a Vendor Agreement Form for a SaaS business model?

Asked by Sarah on 14th February 2022.
A: Absolutely! A Vendor Agreement Form can be used for any type of business model, including SaaS (Software-as-a-Service). The agreement should cover all relevant details of the arrangement between the two parties, such as the duration of the agreement, payment terms, and each party’s responsibilities. It is important to make sure that any specific clauses included in the agreement are enforceable and compliant with local regulations. It is also advisable to seek professional legal advice when drafting or reviewing a Vendor Agreement Form, as there may be specific considerations based on your particular business model.

Q: Are there any differences between US and EU Vendor Agreement Forms?

Asked by Jacob on 28th March 2022.
A: Yes, there can be differences between US and EU Vendor Agreement Forms depending on the jurisdiction in which they are used. Generally speaking, US laws tend to be more permissive than EU laws when it comes to contracts, so some clauses may need to be adjusted if you’re dealing with an EU-based vendor. Additionally, it is important to make sure that any clauses included in the agreement are enforceable under both US and EU laws. It is also advisable to seek professional legal advice when drafting or reviewing a Vendor Agreement Form, so that all necessary steps are taken to ensure that both parties are protected under local regulations.

Q: Does a Vendor Agreement Form need to include provisions for data protection?

Asked by Tyler on 11th April 2022.
A: Yes! A Vendor Agreement Form should include provisions for data protection in order to ensure that sensitive information is kept secure and both parties’ rights are protected. Depending on the jurisdiction in which you are operating, there may be specific requirements for data protection which must be met in order for your contract to be valid. It is also advisable to seek professional legal advice when drafting or reviewing a Vendor Agreement Form, so that all necessary steps are taken to ensure compliance with local data protection laws and regulations.

Example dispute

Suing a Vendor Based on a Vendor Agreement Form

• Review the vendor agreement form and identify any violations of the contract.
• Identify any relevant civil laws that may have been broken.
• Gather evidence to support your claim.
• File a complaint with the court system and serve the vendor with a copy.
• Present your case to the court and make your arguments.
• The court may assess damages to the plaintiff if the violation is proven. Damages can be calculated in a variety of ways depending on the infraction.
• Settlement may be reached out of court or through the court system.

Templates available (free to use)

Vendor Agreement Form

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