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Vendor Agreement

This Agreement is entered by and between Jonas Adam, individually or collectively as the "Signee" and Jane Smith, as the "Signer", together referred to as the "Parties".
The Contract is dated [the date both parties sign].

1. Agreement terms

The Parties agree that the following agreement is dependent on the terms presented as follow:

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Vendor Agreement

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Many individuals or businesses will purchase goods or services from third parties on a regular basis. Whether you are a school renting equipment for a school play or a business engaging with a marketing firm to work on an upcoming product launch, it's best to have an agreement to clearly outline the rights and responsibilities of the individual or company you’re buying from, otherwise known as the “vendor”. That is where a vendor agreement comes in. 

Vendor agreements do not need to be overly long or overly complex, and while there is no formal set of requirements on what they must contain, there are several common elements that they should include and mistakes that people make when creating them. Read on below to learn everything you need to know to create the best vendor agreement template.

What is a vendor agreement?

Simply put, a vendor agreement describes the relationship between a buyer and a seller, in which the buyer purchases goods and or services from the seller in exchange for compensation. The vendor agreement outlines all of the details of that exchange.

What are the key terms and definitions of a vendor agreement template?

While there is no formal definition of what is in a vendor agreement, there are several common elements that should be included to protect both parties.

Who is entering into the agreement

At the start, the agreement should include a clear outline of who is entering into the agreement. It should note whether each party is an individual or corporation, and include the addresses of all parties involved.

A clear description of the products and / or services that are being provided

The next critical piece to include is a clear description of what the vendor is providing the buyer. Because this can vary widely and is at the heart of the agreement itself, it is very important to be very clear and detailed in this section. Many disputes arise over a misunderstanding or conflict regarding the goods or services that the vendor provided. So if the expectations of what is to be provided are outlined clearly upfront then those types of disagreements can be avoided by getting both parties on the same page early.

Payment terms

This is another very important clause, especially for the vendor! It should not only outline how much is being paid to the vendor, but when they are paid, how they are paid, and even what happens in the event of a non-payment. Because money is an important part, if not the most important part, of any commercial transaction, many disputes arise over the payment terms or the statement of work or some mix of both. So it's worthwhile to clearly outline exactly how payment will happen, and how that payment matches to the goods or services described in the description of work that the vendor is expected to deliver.

Term and termination

The agreement should also contain clause is explaining exactly how long agreement is valid for and under what circumstances huge party made. Similarly, if the agreement is not for a fixed term but renews, the agreement should outline the terms of the renewal, including noting when it reviews and how much notice either party must give before it renews.

Intellectual property

If the vendor is providing a service to the buyer, especially if that service is done in the context of a commercial or otherwise business transaction, then it's best for the agreement to clearly outline who owns any intellectual property that that service produces. This part of the agreement is not too dissimilar from a subcontractor agreement which contains similar provisions around do you ownership of output of the work. It should not only who owns the intellectual property resulting from the work, but outline any rights that the other party has to that intellectual property, such as referencing it in marketing materials in the future, will be good to include the agreement.


There are many reasons why one or both of the parties would wish to enforce confidentiality on the goods or services being provided. If that is the case, then the confidentiality clause in the vendor agreement should clearly outline what restrictions one or both parties have on discussing the transaction.

Limitation of liability

This is another very common clause that is critical for the vendor agreement, as well as other similar agreements like a subcontractor agreement or sublease agreement. This clause will exclude certain damages, such as those that are indirect, incidental, or consequential, from a party’s liability, as well as potentially capping the overall monetary amounts that one party or the other as a result of these damages.


It is also not uncommon for a buyer of a vendor’s goods or services to require that the vendor have some kind of insurance. This is very common if the vendor is performing the services on the property of the buyer, which would increase the potential issues related to the provision of that service. For example, if a business is hiring a painting company to paint its offices, the business would want to make sure that the painting company has proper insurance for its employees, especially while they are working on the company's property, in the event of an accident involving the company's employees or a painting company's employees.


Each city, county, and state has their own laws that influence various parts of the vendor agreement. The federal government as well they have laws that impact how the remit itself is right. It is best to consult a local lawyer who is familiar with the type of work that the vendor is providing and with local laws. They will be able to provide guidance on whether the agreement is consistent with these local laws, and if not, they will be able to suggest changes that ensure compliance.

Relationship of the parties

This is another critical clause that clearly outlines the relationship between the parties, notably stating that there is not an employment relationship between them, but that it is one of an independent contractor relationship. This is especially important in certain United States states, like California and New York, which have very strict laws around the misclassification of employees. There are strict penalties for companies that misuse this portion of the law, either intentionally or unintentionally, so it is very important to ensure it is covered clearly in the contract. This type of clause is very common in vendor agreements, as well as in agency agreements and subcontractor agreements.

What are the benefits of a vendor agreement?

The vendor agreement provides clear protection and peace of mind to both parties when engaging in a commercial transaction. Like many agreements, the vendor agreement template’s main benefit is clearly setting the rights and responsibilities of both parties upfront, so there is no disagreement or confusion later due to a miscommunication. If issues do arise for whatever reason, the vendor agreement template also provides clear answers on how those issues can and should be resolved in various situations.

It can be very quick to create and sign a vendor agreement, and it can save you alot of time and headache in the future! (Source)

How should I sign a vendor agreement?

You can sign a vendor agreement however either party is comfortable signing and in whatever way is convenient for everyone. That could mean either signing a paper copy or signing a digital copy through an online electronic signing service such as Docusign. Whichever way you choose to sign the agreement, ensure that all of the important parts are filled out and validated by both parties. Both parties should read the agreement thoroughly before signing it. Both parties should also ensure that they have a copy of the agreement for their records. Copies typically sent to both parties automatically if you use an online electronic signing service. However, if you are signing paper copies of the agreement, make sure that you print and sign two copies for both parties to keep for the record.

Whether you're selling goods or services, you should use a vendor agreement to protect yourself and your business. (Source)