What Is a Vendor Agreement?

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  • Written By: B. Miller
  • Edited By: Andrew Jones
  • Last Modified Date: 21 September 2019
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A vendor agreement is a binding legal agreement between two parties, and which specifies the terms of a certain business arrangement. A vendor agreement between two businesses might specify that one business will provide the products to be sold, and the other business will display the products for sale, for a certain period of time. Similar agreements exist between individuals and businesses, such as for parties or weddings. Agreements with a florist, caterer, and photographer might all be written, for example. These agreements help to protect both parties in the agreement, and ensure that the provisions are carried out appropriately.

Two businesses who enter into any type of agreement will almost always write up a vendor agreement to go along with it. This does not need to be a lengthy document; it depends on the size of the businesses, and the extent of the partnership. A vendor agreement might consider such specific facts as the amount of items that will be delivered and under what time period. For instance, once a week, once a month, or more or less frequently depending on the needs of the business. It might also specify how the products will be displayed in the store, if it is a retail agreement.


Retail vendor agreements may have additional provisions as well, such as the sale price of the items or the manner in which tax is charged. Any additional fees should be specified, as well as the conditions under which the vendor agreement can be modified. Most agreements are created for a set period of time, such as a year, and may be renewed when that time is up. They are signed by both parties, and often kept confidential to protect the interests of both business owners.

When an individual and a business enter into a vendor agreement, the arrangements may be slightly different, often because the professional relationship will not be ongoing, but will only exist on a specified date. People planning a wedding, for instance, will want to make sure that they always obtain an agreement for all promised goods and services, especially once a deposit has been put down. This should specify important information such as the date and time of day of the wedding, the type of service that will be provided, and the stated cost. This way the vendors can't change their minds and increase the price at the last minute, or fail to show up on the day of the event, without repercussions.


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