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What to Include in a Vendor Agreements

Details that need to be included in a vendor agreement

A well-drafted vendor agreement can minimise the misunderstandings which may occur between the vendor and the contractor. Here are a few details that need to be mentioned in a well-drafted vendor agreement.

A clear and detailed description of the product or services

A vendor agreement should clearly mention the description of services or the products. In some cases a statement of work will be attached which provides all the details of work.

Payment details

A vendor agreement should have details regarding the cost of the service or products. Details about payments dues, party to who the payments have to be made, keep a record of late payments etc to be mentioned in the agreement.

Term and termination

The agreement should mention details regarding the term of agreement. The situations during which and how terminations can take place will be mentioned in the agreement. Sometimes terminations are made for convenience purposes with a notice period and other times terminations are made because of a cause.

Intellectual property

If either party are using Intellectual property, the parties need to mention the owner of the IP, what it is to be used for and whether or not a license has been granted to the other party to use the IP.

Representations and warranties

A vendor agreement should provide details regarding the representations and warranties that will be provided by the vendor. The products and services that will be provided will be in accordance with the industry.


Most vendor agreements contain details regarding the handling of confidential information. The parties will execute a separate non-disclosure agreement. The agreement also includes details that are excluded from being confidential.


It is a common to see that a vendor agreement also includes certain insurances that a vendor holds. For example, if a vendor engages in a professional legal service, the vendor will hold an insurance called the Errors and Omission Insurance.

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