The Sole Supply Agreement is a critical commercial contract used when a business wishes to establish an exclusive supply relationship with a single provider for specific products or services. This document, governed by Indian law, is particularly important in industries where consistent quality, reliable supply chains, and long-term partnerships are essential. It addresses key aspects such as exclusivity terms, minimum purchase obligations, quality requirements, pricing mechanisms, and operational procedures. The agreement must be carefully structured to comply with Indian competition laws, particularly the Competition Act, 2002, to avoid any anti-competitive implications. It's commonly used in manufacturing, distribution, and various industrial sectors where businesses need to secure their supply chain through exclusive arrangements.
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1. Parties: Identification and details of the supplier and buyer entities
2. Background: Context of the agreement, relationship between parties, and purpose of the exclusive arrangement
3. Definitions and Interpretation: Definitions of key terms and interpretation rules for the agreement
4. Scope of Supply: Detailed description of products/services covered under the exclusive arrangement
5. Exclusivity Obligations: Terms of exclusive supply arrangement, territorial scope, and any exceptions
6. Supply Terms: Ordering process, delivery terms, acceptance procedures, and lead times
7. Price and Payment: Pricing mechanism, payment terms, invoicing, and price adjustment provisions
8. Quality Requirements: Quality standards, specifications, and quality control procedures
9. Minimum Purchase Commitments: Minimum order quantities, forecasting requirements, and consequences of shortfall
10. Term and Termination: Duration of agreement, renewal terms, and termination rights
11. Warranties and Indemnities: Product warranties, mutual indemnifications, and liability provisions
12. Confidentiality: Protection of confidential information and trade secrets
13. Force Majeure: Events excusing performance and related procedures
14. Governing Law and Dispute Resolution: Applicable law and dispute resolution mechanisms
1. Insurance: Insurance requirements - include when supply involves high-value goods or significant risks
2. Intellectual Property Rights: IP ownership and licenses - relevant when supply involves proprietary technology or branded products
3. Competition Law Compliance: Detailed compliance provisions - necessary when arrangement might raise competition law concerns
4. Storage and Warehousing: Storage requirements - include when supplier needs to maintain local inventory
5. Training and Support: Technical support provisions - relevant for complex products or services
6. Environmental Compliance: Environmental standards - important for industries with environmental impact
7. Change Control: Process for changes to specifications - crucial for technical or evolving products
8. Export Control: Export compliance - necessary for international trade aspects
9. Business Continuity: Disaster recovery provisions - important for critical supply relationships
1. Product Specifications: Detailed technical specifications of products/services to be supplied
2. Pricing Schedule: Detailed pricing structure, including any volume discounts or pricing mechanisms
3. Quality Standards: Specific quality requirements, testing procedures, and acceptance criteria
4. Service Levels: Performance metrics and service level requirements
5. Forecast Template: Format for submitting forecasts and purchase orders
6. Key Personnel: List of key contacts and responsible personnel from both parties
7. Approved Manufacturing Facilities: List of approved production sites and any subcontractors
8. Compliance Requirements: Specific regulatory or industry compliance requirements
9. Territory Definition: Detailed description of geographical territory covered by exclusivity
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