Customer Agreement defines the terms and conditions with your Customer. It has all the clauses and all the terms and conditions that might be necessary in case of a dispute with your Customer. VendorAgreement defines the terms and conditions with your Vendor. There are times when you may encounter disputes with your Vendors. In such a case, there need to be certain rules and regulations that may prove to be helpful in avoiding the disputes. It defines the scope of work, deliverables, and confidentiality clause. Non solicitation clause, tax or GST applications, location of delivery or services, etc.Exclusivity clause can also be mentioned in the Agreement if you have agreed that way.
We can also define the Insurance requirement in the Agreement where the other party is required to obtain the commercial general insurance as a requirement of Agreement.The indemnity clause of the Agreement is useful in case the other party does something wrong, intentionally.
There are many benefits of entering into a Customer or VendorAgreement. Let us have a look at all these benefits:
There are few important clauses of the Customer or VendorAgreement that you might know in order to have a better understanding of the Agreement. Let us have a look at all the important clauses of this Agreement:
| Serial No. | Clause | Content |
|---|---|---|
| 1 | Name, address, CIN number of Vendor and Customer | Need to enter the details of all the parties. |
| 2 | Goods and services | Need to specify the goods or services to be provided under the Agreement |
| 3 | Commercials | Need to define the commercials, invoice mode and payment mode. |
| 4 | Confidentiality | Need to enter the clause with regard to confidentiality and non solicitation. |
| 5 | Insurance | Need to enter the insurance requirements with its nature and sum assured. |
| 6 | Tenure and Termination | Need to enter the termination and term clause of Agreement. |
| 7 | Conflicts, dispute resolution and jurisdiction | Clauses to solve the future conflicts between parties. |
| 8 | Statement of work | Need to enter the SOW as an annexure to mention the work in detail. There can be multiple SOW for a single Agreement. |
| 9 | No employer employee or principal agent relationship | Agreement should define that there is no employer employee relationship between the Parties. |
| Do’s | Don’ts |
|---|---|
| Always print the Customer or VendorAgreement on the appropriate stamp paper in case of B2B business. | Do not forget to collect the actual signed copy of Agreement from your Customer or Vendor. |
| In case of B2C business, you may do online Agreement and let have your Customer agree to the terms and conditions. | Don't agree on the jurisdiction of Agreement in remote areas as it would be difficult for your attorneys to visit there. |
| In case your Customer or Vendorare from unorganised sector, you may think to translate your Agreement in Hindi or local language. | Do not forget to add force majeure clause in the Agreement in order to cater any unexpected scenario. |
Customer Agreement defines all things such as insurance, deliverables, pricing. On the other hand, the statement of work is particularly about a single project.
Yes. As per the Information Technology Act, Digital Signatures are allowed for executing the Agreement.
The VendorAgreement is a detailed Agreement with the Vendor for a better understanding of the trade relations with the Vendor. This includes his commercials, deliverables and locations, etc. However, the non disclosureAgreement basically talks about the confidentiality relative clauses and IP related clauses only. Generally, we include the non disclosureAgreement within the VendorAgreement itself.
Yes you need to define each and every term that is used in the CustomerAgreement. This is necessary so that there is no sign of doubt regarding any of the terms that are used in the CustomerAgreement. This is beneficial for both the parties for a better understanding.
There is actually a dispute resolution and an arbitration clause in the Agreement itself. Therefore, if any of the parties violate the clauses of the Agreement, then the arbitration Clause is considered and steps are to be taken accordingly.
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