A vendor agreement refers to a legally binding agreement between two or more parties, stating the details and conditions that the contractor has to fulfil. This is an important document when one is dealing with a contractor in either a short or long term basis, since it sets forth the expectations that are required of them. This way, all the parties bound by the document are on the same page regarding their roles.
Some of the critical points found in a vendor agreement include the location where the services are to be provided, the time allocated for the service, the date and the quality of goods or services that are to be delivered. Typically, the vendor agreement also includes a Statement of Work, which is a clause defining the timelines and project-specific activities the vendor will provide to the client. Usually, the Statement of Work has to be acceptable to the vendor before they can start working.
The vendor and the client have to sign the agreement before the project is started. Once this is done, usually in the presence of an attorney, it becomes legally enforceable. The vendor then has to work in such a manner that no clause in the agreement will be violated, in which case they may face penalties, legal action or even fines depending on the details of the agreement.
Drafting a vendor agreement that will be agreeable to both parties can be difficult particularly for complex projects. This is why investing in the help of qualified attorneys during the process is important.