Supply contract – What it is, definition and concept

Therefore, it is nothing more than a written agreement between two natural or legal persons, through which one party corresponds to deliver, to offer supply, some type of good or service to this other party, which must provide a consideration .

In addition, this type of contract fulfills a series of essential functions for individuals, companies and administrations. On the other hand, there are a number of responsibilities to take into account.

Functions of the supply contract

Let’s see what are the functions that the supply contract fulfills.

  1. First, it serves to supply goods and services. In this way, many companies need a constant flow of products, raw materials or specific services. Therefore, this is perhaps the most relevant function.
  2. Second, it spells out in writing a series of specific conditions of purchase and sale. This is so because the regulatory norms are general and, for legal certainty, it is best to carry out this type of contract privately and specifically.
  3. Among the agents involved, the Public Administration can also be found. In this case, the contract establishes the minimum supply conditions.
  4. Its duration is usually indeterminate. This implies a regular and constant supply.

Responsibilities in the supply contract

This type of agreement entails a series of responsibilities that should also be known.

  • Most countries have general regulations related to civil or commercial law that oblige the fulfillment of these contracts.
  • Furthermore, they are bilateral contracts. This means that both parties are obligated. The supplier to supply in time, quality or form, and the client to pay as contracted.
  • It must be taken into account that regulation occurs both at the private level and under public law, especially if one of the parties is a Public Administration.
  • On the other hand, forms of resolution are usually agreed and, where appropriate, compensation for damages. In this sense, jurisprudence has laid the foundations to do so.
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Example of a supply contract

Let’s see, to finish, some examples of this type of contract.

  • Gas, electricity or water contracts are some of the most common.
  • A contract in which a company undertakes to supply office supplies to a specific municipality.
  • A raw material supply contract for a food company. In this way, the supplier undertakes to deliver periodic quantities at an agreed price.

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