Ready to use legal template

Drafted by experienced lawyers

Vietnamese-English translation

Ready to use legal template

Drafted by lawyers

Vietnamese-English translation

HomeBusiness contractsSupply Agreement

Learn more about Supply Agreement in Vietnam

Our Supply Agreement template is designed to facilitate seamless transactions between suppliers and buyers, offering a robust framework that adheres to Vietnamese legal standards and regulations. Developed by our seasoned team of legal experts, each agreement embodies precision and clarity, ensuring legal compliance and minimizing potential risks. Our commitment to excellence extends to providing you with an easy-to-edit Word format, empowering you to customize the agreement to suit your unique business requirements effortlessly. Trust Themis Partner for professional, reliable, and legally sound solutions that elevate your business practices and safeguard your interests in the realm of supply agreements.

Table of contents


What is a Supply Agreement?

A Supply Agreement is a legally binding contract between two parties, typically a supplier and a buyer, that meticulously outlines the terms and conditions governing the supply of goods or services. This agreement is fundamental in establishing the rights, responsibilities, and obligations of each party involved in the transaction, ensuring that both the supplier and the buyer are clear on their commitments and expectations. Key elements typically included in a Supply Agreement are the precise description of the goods or services to be provided, detailed pricing and payment terms, delivery schedules, quality standards, warranties, liability provisions, dispute resolution mechanisms, and termination clauses. These components work together to form a comprehensive document that addresses all potential aspects of the supply relationship, minimizing the risk of misunderstandings and disputes.

A Supply Agreement serves as a crucial roadmap for the relationship between the supplier and the buyer, providing much-needed clarity and protection for both parties throughout the duration of their engagement. By clearly delineating each party’s roles and obligations, the agreement helps to foster a collaborative and mutually beneficial business relationship. It ensures that both parties are aligned in their expectations and are legally protected should any issues arise. The structured nature of a Supply Agreement also facilitates smoother operations, as it preemptively addresses potential points of contention and sets forth agreed-upon mechanisms for resolving any disputes. In this way, a well-drafted Supply Agreement not only safeguards the interests of both parties but also promotes efficiency, trust, and long-term cooperation.

What is included in a Supply Agreement?

A comprehensive Supply Agreement typically includes several key components to ensure clarity and legal enforceability. These components may vary depending on the nature of the goods or services being supplied and the specific needs of the parties involved. Here are the main elements commonly included in a Supply Agreement:

Parties Involved: Identifies the parties entering into the agreement, including their legal names and addresses.

Description of Goods or Services: Clearly defines the goods or services to be supplied, including specifications, quantities, quality standards, and any other relevant details.

Price and Payment Terms: Outlines the pricing structure for the goods or services, including unit prices, total costs, payment due dates, and any applicable taxes or fees.

Delivery Terms: Specifies the terms and conditions for the delivery of goods or performance of services, including delivery schedules, shipping methods, and any associated costs or responsibilities.

Quality Standards and Inspections: Establishes the quality standards that the goods or services must meet, as well as procedures for inspection, testing, and acceptance.

Warranties and Guarantees: Sets forth any warranties or guarantees provided by the supplier regarding the quality, performance, or suitability of the goods or services.

Intellectual Property Rights: Addresses ownership rights and usage permissions for any intellectual property involved in the supply arrangement, such as trademarks, patents, or copyrights.

Liability and Indemnification: Allocates responsibility for losses, damages, or liabilities arising from the supply of goods or services and specifies indemnification provisions to protect each party from certain risks.

Confidentiality and Non-Disclosure: Includes provisions to safeguard confidential information shared between the parties during the course of the agreement.

Term and Termination: Specifies the duration of the agreement and outlines the circumstances under which either party may terminate the agreement, including notice periods and any associated consequences.

Dispute Resolution: Defines procedures for resolving disputes that may arise under the agreement, such as negotiation, mediation, arbitration, or litigation.

Why is a Supply Agreement important for businesses in Vietnam?

A Supply Agreement holds significant importance for businesses in Vietnam for several reasons:

1. Legal Clarity and Protection

Vietnam’s business environment is governed by a complex set of laws and regulations. A well-drafted Supply Agreement helps businesses clarify their rights, obligations, and responsibilities, providing legal protection and reducing the risk of disputes or misunderstandings.

2. Risk Mitigation

By clearly outlining the terms and conditions of the supply arrangement, including pricing, delivery, quality standards, and liability provisions, a Supply Agreement helps mitigate various risks associated with the supply chain, such as delays, non-performance, defective goods, or breach of contract.

3. Business Relationships

Establishing a formal Supply Agreement fosters trust and transparency between the parties involved in the supply chain, including suppliers, manufacturers, distributors, and customers. Clear communication and mutual understanding of expectations can strengthen business relationships and promote long-term collaboration.

4. Quality Assurance

Vietnam’s business landscape is diverse, with businesses operating in various industries and sectors. A Supply Agreement helps ensure that the goods or services supplied meet the agreed-upon quality standards, specifications, and performance criteria, thus maintaining consistency and reliability in the supply chain.

5. Regulatory Compliance

Vietnam’s regulatory framework for business operations, import/export, taxation, and intellectual property rights is constantly evolving. A Supply Agreement drafted in compliance with relevant laws and regulations helps businesses navigate legal requirements and avoid potential penalties or regulatory issues.

6. Enforcement Mechanisms

In the event of disputes or breaches of contract, a well-drafted Supply Agreement provides clear mechanisms for resolution, including negotiation, mediation, arbitration, or litigation. This helps streamline the resolution process and minimize disruptions to business operations.

7. Market Competitiveness

By demonstrating a commitment to professionalism, reliability, and legal compliance through formal Supply Agreements, businesses in Vietnam can enhance their reputation, attract potential partners or customers, and gain a competitive edge in the market.

What are the steps involved in executing a Supply Agreement?

Here are the steps involved in executing a Supply Agreement:

1. Negotiation:
The parties involved negotiate the terms and conditions of the Supply Agreement, including pricing, delivery schedules, quality standards, payment terms, and any other relevant provisions.

2. Drafting:
Once the key terms are agreed upon, the Supply Agreement is drafted. This involves capturing all negotiated terms in a comprehensive and legally enforceable document.

3. Review and Approval:
Both parties review the draft Supply Agreement carefully to ensure that it accurately reflects their understanding and intentions. Once the final version of the Supply Agreement is prepared, it is submitted for approval by the authorized representatives of each party. This may involve obtaining signatures or other forms of approval as required.

4. Execution and Implementation:
After approval, the Supply Agreement is executed by both parties. This typically involves signing the document in the presence of witnesses or a notary public, depending on legal requirements. With the Supply Agreement executed, both parties proceed to fulfill their respective obligations according to the terms outlined in the agreement. This may involve supplying goods or services, making payments, and adhering to other contractual obligations.

5. Monitoring and Compliance:
Throughout the duration of the Supply Agreement, both parties monitor performance and compliance with the agreed-upon terms. Any issues or discrepancies that arise should be addressed promptly through communication and, if necessary, formal dispute resolution mechanisms outlined in the agreement.

6. Renewal or Termination:
Depending on the duration specified in the agreement, the parties may choose to renew the Supply Agreement upon its expiration or terminate it early if certain conditions are met. Renewal or termination terms should be clearly outlined in the agreement to facilitate a smooth transition.

What goods or services are commonly covered in a Supply Agreement?

Goods or services covered in a Supply Agreement can vary widely depending on the nature of the business and the specific needs of the parties involved. However, common examples include:

Raw materials or components: Supplies necessary for manufacturing or production processes, such as metals, plastics, textiles, or electronic components.
Finished products: Goods ready for sale to end customers, such as consumer electronics, clothing, household goods, or automotive parts.
Agricultural products: Crops, livestock, or other agricultural commodities supplied by farmers or producers to processors, distributors, or retailers.
Equipment or machinery: Machinery, tools, or equipment needed for construction, manufacturing, or other industrial processes.
Software or technology: Digital products, software licenses, or technology solutions provided by software developers, IT companies, or service providers.
Professional services: Services such as consulting, legal, accounting, marketing, or IT services provided by professional service firms or individual contractors.
Transportation or logistics services: Freight forwarding, shipping, warehousing, or distribution services necessary for transporting goods from suppliers to buyers.
Energy or utilities: Supply of electricity, natural gas, water, or other utilities required for operations in various industries.
Maintenance or repair services: Services for the upkeep, repair, or maintenance of equipment, machinery, or infrastructure.
Outsourced manufacturing or production: Contract manufacturing services where one party manufactures goods on behalf of another party, often involving specialized processes or expertise.

These are just a few examples, and the scope of goods or services covered in a Supply Agreement can be tailored to meet the specific requirements of the parties involved in the transaction.

Are there any warranties or guarantees provided in a Supply Agreement?

In a Supply Agreement, warranties or guarantees are often included to provide assurances regarding the quality, performance, or condition of the goods or services being supplied. These assurances may vary depending on the nature of the products or services and the negotiations between the parties. Common types of warranties or guarantees found in Supply Agreements include:

Quality Warranty: Assures that the goods or services supplied will meet specified quality standards or specifications. This warranty typically covers issues such as defects in materials or workmanship.

Fitness for Purpose Warranty: Guarantees that the goods or services supplied are suitable for the intended purpose as communicated by the buyer to the supplier.

Title Warranty: Ensures that the supplier has legal ownership of the goods being supplied and has the right to transfer ownership to the buyer free from any encumbrances or claims by third parties.

Non-Infringement Warranty: Assures that the goods supplied do not infringe upon any third-party intellectual property rights, such as patents, trademarks, or copyrights.

Performance Warranty: Guarantees that the goods or services will perform as expected under normal operating conditions for a specified period of time

Timeliness Warranty: Ensures that the goods or services will be delivered or performed within the agreed-upon timeframes or schedules.

Compliance Warranty: Assures that the goods or services supplied comply with all applicable laws, regulations, and industry standards.

Continued Support Warranty: Guarantees that the supplier will provide ongoing support, maintenance, or technical assistance for the goods or services supplied beyond the initial delivery or performance.

These warranties or guarantees serve to protect the interests of both parties and provide recourse in the event of non-compliance or failure to meet agreed-upon standards. The specific terms and conditions of warranties or guarantees are typically negotiated between the parties and outlined in detail within the Supply Agreement.

What happens if there's a breach of contract in Vietnam?

In Vietnam, if there’s a breach of contract, the legal remedies available to the aggrieved party depend on the nature and severity of the breach, as well as the terms outlined in the contract itself. Here are some general steps and remedies that may apply:

1. Notification of Breach

The aggrieved party typically notifies the breaching party of the breach of contract, providing details of the violation and requesting corrective action if possible. This notification may be required as per the terms of the contract.

2. Negotiation and Resolution

Initially, the parties may attempt to resolve the breach through negotiation, mediation, or other alternative dispute resolution methods. This can involve discussions to reach a mutually acceptable solution, such as compensation for damages, performance of the contract as originally agreed, or modification of the contract terms.

3. Legal Action

If negotiation fails or if the breach is significant and cannot be resolved amicably, the aggrieved party may choose to pursue legal action through the Vietnamese court system. Legal action may involve filing a lawsuit against the breaching party for breach of contract and seeking appropriate remedies.

4. Remedies for Breach

The remedies available for breach of contract in Vietnam may include:

Damages: The non-breaching party may seek monetary compensation for losses incurred as a result of the breach, including direct damages, consequential damages, and incidental damages.
Specific Performance: In cases where monetary damages are inadequate to remedy the harm caused by the breach, the court may order the breaching party to perform their obligations under the contract as originally agreed.
Termination of Contract: The non-breaching party may seek termination of the contract and restitution of any benefits conferred under the contract, as well as reimbursement of any expenses incurred.
Liquidated Damages: If the contract includes a provision specifying the amount of damages to be paid in the event of breach, the non-breaching party may seek enforcement of this provision.

5. Enforcement of Court Judgments

If the court rules in favor of the aggrieved party, the judgment is enforceable through legal means, such as garnishment of wages, seizure of assets, or other enforcement measures prescribed by Vietnamese law.

It’s important for parties involved in contracts in Vietnam to carefully review and understand the terms and conditions of their agreements, including provisions related to breach of contract and dispute resolution mechanisms. Seeking legal advice from qualified professionals can also help parties navigate the complexities of contract law and effectively protect their rights and interests in the event of a breach.

Can a Supply Agreement be terminated early in Vietnam?

Yes, a Supply Agreement can be terminated early in Vietnam under certain circumstances. The ability to terminate the agreement prematurely and the procedures involved often depend on the terms outlined in the contract itself, as well as the applicable laws and regulations. Here are some common scenarios in which a Supply Agreement may be terminated early:

Mutual Agreement: The parties involved may mutually agree to terminate the Supply Agreement before the expiration of its term. This could be due to changes in business circumstances, shifts in market conditions, or other reasons mutually acceptable to both parties.
Breach of Contract: If one party breaches the terms of the Supply Agreement, the non-breaching party may have the right to terminate the agreement. The breach could involve failure to deliver goods or services as specified, non-payment of invoices, or violation of other contractual obligations.
Force Majeure Events: In cases of force majeure events, such as natural disasters, war, government actions, or other unforeseeable circumstances beyond the control of the parties, the Supply Agreement may be terminated early. Force majeure clauses typically outline the rights and obligations of the parties in such situations.
Termination for Convenience: Some Supply Agreements include provisions allowing one or both parties to terminate the agreement without cause, often referred to as "termination for convenience." This provision enables parties to exit the agreement for any reason deemed appropriate, subject to any notice periods or other requirements specified in the contract.
Insolvency or Bankruptcy: If one of the parties becomes insolvent or files for bankruptcy, the other party may have the right to terminate the Supply Agreement. This protects the interests of the non-defaulting party and allows them to seek alternative arrangements for fulfilling their supply needs.
Material Adverse Change: Certain Supply Agreements may contain clauses allowing termination if a material adverse change occurs, significantly impacting the ability of one or both parties to perform their obligations under the contract.

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