Corporate agreements

Vendor / Supply (Procurement) Agreement

A Vendor/Supply Agreement is a master contract between a buyer and a seller that governs the ongoing sale and purchase of goods. It sets out the overarching commercial terms, quality standards, and risk allocation, allowing the parties to transact through individual purchase orders without renegotiating the core conditions each time.

This document is a commercial contract, not a court filing. It is governed by the Indian Contract Act, 1872 and the Sale of Goods Act, 1930, and typically includes an arbitration clause under the Arbitration and Conciliation Act, 1996 for dispute resolution.

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Governing law
Indian Contract Act, 1872 + Sale of Goods Act, 1930
Sections
s. 10s. 16s. 73

When this is the right filing

  • When a business intends to procure goods from a vendor on a recurring basis under a single framework contract.
  • When the parties want to define standard specifications, pricing, delivery, and payment terms that will apply to all future purchase orders.
  • When the buyer requires express warranties regarding title, quality, and fitness for purpose that apply to every supply.
  • When the transaction involves the sale of movable property (goods) as defined under the Sale of Goods Act, 1930.
  • Do not use this agreement for procuring services; a Master Services Agreement is the appropriate instrument for service contracts.

What the court looks for

  • Clear identification of the goods, specifications, and pricing, typically detailed in a schedule, to satisfy the requirement of a definite subject matter of sale.
  • Explicit allocation of risk and transfer of title in the goods, consistent with Sections 19 to 26 of the Sale of Goods Act, 1930.
  • Express warranties of title, description, merchantable quality, and fitness for purpose, making the conditions explicit regardless of the implied terms under Section 16 of the Sale of Goods Act.
  • A defined mechanism for inspection and rejection of non-conforming goods by the buyer.
  • A clear procedure for issuing and accepting purchase orders, establishing how individual contracts are formed under the master agreement.

The structure the court expects

The components of the filed format, in the order they appear. LexPilot fills every one of them from your facts and papers.

  1. 1Recitals
  2. 2Schedule a — goods, specifications and pricing
How it opens
WHEREAS the Supplier is engaged in the manufacture/supply of [goods description]; AND WHEREAS the Buyer wishes to purchase such goods from the Supplier on a recurring basis on the terms set out below.

Bracketed items are filled from your case.

Frequently asked questions

Why should I make the warranties of quality and fitness express instead of relying on the Sale of Goods Act?

Section 16 of the Sale of Goods Act, 1930 implies conditions of fitness and merchantability only in specific circumstances, such as when the buyer relies on the seller's skill. Making these warranties express in the agreement ensures they apply unconditionally to every supply, removing any ambiguity about their applicability.

What is the difference between a supply agreement and a purchase order?

A supply agreement is the master contract establishing the long-term legal framework, including warranties, payment terms, and liability. A purchase order is an individual transactional document issued under that master agreement, specifying the quantity and delivery schedule for a particular batch of goods.

Does this agreement require registration or notarisation?

No. A supply agreement for goods is a contract under the Indian Contract Act, 1872 and does not require registration. It is typically executed on nominal stamp duty as prescribed by the relevant State stamp act.

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