This vendor agreement (also referred to as a supplier agreement) sets out the principal terms between a DMC and its vendor for goods and/or services to be provided by the vendor for a program managed and operated by the DMC.
Because DMCs and their vendors typically work together numerous times over the course of years on different programs, this vendor agreement is intended to serve as a master vendor agreement. That means this agreement only needs to be negotiated and executed once between the DMC and its vendor because the terms of this agreement will govern over all future programs in which the DMC secures its vendor’s goods and/or services.
This is accomplished by way of Attachment A of this vendor agreement. This attachment is defined as a scope of work that will change with each program, but will always remain subject to the principal terms contained within the vendor agreement.
This document is valuable to DMCs for a variety of reasons, but the most important reason is that it reflects many of the substantive terms found within the DMC model service agreement. The DMC is legally located at the heart of the transaction and each contract that is subject to that transaction has a cause and effect upon every other contract. Whether it’s the timing of deposits received, the amounts contained therein, or what happens in the event one contract is terminated or cancels, the vendor agreement and the DMC model service agreement must compliment each other in order to provide certain assurances to the DMC and, simultaneously, mitigate any potential liability.
Lastly, it is understood that not all vendors will agree to these terms. Especially those larger, more sophisticated entities that are accustomed to presenting their own vendor agreement and having it signed with little to no resistance. If possible, a DMC should attempt to negotiate with those vendors to the best of their ability and attempt to utilize at least some of the language and lessons offered in this vendor agreement.
Things to keep in mind when reviewing and editing the vendor agreement to suit your needs:
Bracketed items that are highlighted yellow are either optional terms or include alternative language to be selected, added, or deleted at the drafter’s discretion.
These terms are being used in a business-to-business transaction. This vendor agreement should not be used in a consumer or governmental contract, which may involve legal and regulatory requirements and practical considerations that are beyond the scope of this resource.
The parties to the agreement are US entities and the transaction takes place in the US. If any party is organized or operates in, or any part of the transaction takes place in a foreign jurisdiction, these terms may need to be modified to comply with applicable laws in the relevant foreign jurisdiction.