Successful vendor/business transactions don’t just happen. Such transactions require a negotiated set of terms and conditions and the establishment of a mutually beneficial financial relationship between the two parties. This is why, for efficiency’s sake, the vendor/business relationship is often described in specific detail in the form of a legally binding written vendor contract.
Vendor contracts can take several forms, but in general they all should establish several key factors necessary for a successful transaction, including the scope of the products or services to be delivered, the price that will be paid for those products or services, acceptable methods for terminating the contract, and potential compensation for contract breaches from either party. Whether it is standardized or recently negotiated, a commercial vendor contract will establish the parameters of the agreement using common, albeit likely legalese, terminology.
To better understand what is expected from your business’ participation in a vendor contract it is important to have a working knowledge of the legal vocabulary. This Quick Glossary from TechRepublic Premium explains twenty-eight terms and concepts most often associated with commercial vendor contracts.