A blanket order agreement, commonly referred to as a BOA, is a contract between a buyer and a supplier. It sets out the terms and conditions of a continuous supply of goods or services over a specified period. BOAs are particularly valuable for businesses that require regular and ongoing purchases of the same items. By negotiating a BOA, the buyer can guarantee a steady supply of goods while the supplier enjoys the security of knowing they have a regular customer.
If you`re in the process of negotiating a BOA or need to draft a new agreement, it can be helpful to have a sample on hand. In this article, we`ll provide a template and discuss some key considerations to keep in mind.
Key Terms of a Blanket Order Agreement
Before diving into the sample agreement, it`s essential to understand the key terms you`ll need to include. These can vary depending on the nature of your business, but here are a few general terms that should be included:
1. Contact Information: Be sure to include the contact information of both parties, including the business names, addresses, phone numbers, and email addresses.
2. Delivery Schedule: Define the delivery schedule, including delivery frequency, lead time, and method of delivery.
3. Product Specifications: Clearly define the product or service that`s being supplied, including any special requirements, standards, or specifications.
4. Payment Terms: Specify the payment terms, including the payment method, payment schedule, and any fees or penalties for late payments.
5. Order Volume: Outline the minimum and maximum order volumes, as well as any penalties or fees for orders that fall outside these limits.
6. Termination: Define the circumstances under which the agreement can be terminated, including notice periods and any associated fees or penalties.
Sample Blanket Order Agreement
Now that we`ve discussed the key terms, let`s take a look at a sample blanket order agreement. Keep in mind that this is just a template, and you may need to customize it to fit your business needs.
[Company Name] Blanket Order Agreement
This Blanket Order Agreement („Agreement“) is entered into on [Date] by and between [Company A], with its principal place of business at [Address], („Buyer“) and [Company B], with its principal place of business at [Address], („Supplier“).
1. Purpose
The purpose of this Agreement is to establish a framework for the continuous supply of goods or services as described in this Agreement.
2. Product Specifications
The Supplier agrees to supply the Buyer with [Product/Service] according to the specifications outlined in Exhibit A.
3. Delivery Schedule
The Supplier agrees to deliver the goods or perform the services in accordance with the delivery schedule outlined in Exhibit A. The Buyer may provide the Supplier with a revised delivery schedule from time to time as agreed upon by the parties.
4. Order Volume
The Buyer agrees to purchase a minimum of [Minimum Order Volume] and a maximum of [Maximum Order Volume] of the goods or services in a 12-month period, unless otherwise agreed upon by the parties in writing.
5. Payment Terms
Payment shall be made by the Buyer to the Supplier per the payment terms outlined in Exhibit A. The Buyer agrees to pay any fees or penalties associated with late payments.
6. Termination
Either party may terminate this Agreement upon [Notice Period] days written notice to the other party. In the event of termination, the Buyer agrees to pay any outstanding invoices in accordance with the payment terms outlined in Exhibit A.
7. Governing Law
This Agreement shall be governed by and construed in accordance with the laws of the state of [State], without giving effect to any choice of law or conflict of law provision or rule.
8. Entire Agreement
This Agreement, together with Exhibit A, constitutes the entire agreement between the parties and supersedes all prior and contemporaneous agreements, proposals, or representations, whether written or oral, concerning its subject matter.
[Signatures]
By signing below, the parties agree to the terms and conditions outlined in this Blanket Order Agreement.
[Company A]
By: [Authorized Signatory]
Title: [Title]
Date: [Date]
[Company B]
By: [Authorized Signatory]
Title: [Title]
Date: [Date]
Conclusion
Negotiating a BOA can be a complex process, but having a sample agreement on hand can help streamline the process. Remember to customize the template to fit your business needs and to include all the necessary terms and conditions. With a solid BOA in place, you can enjoy the peace of mind that comes with knowing you have a steady supply of goods or services.