The Preferred Vendor Agreement serves as a foundational document for organizations looking to establish strategic sourcing relationships with key suppliers in the Canadian market. This agreement is typically used when a customer organization identifies a supplier as a preferred source for specific goods or services, warranting special pricing, priority service, or other preferential terms. The document addresses crucial aspects such as volume-based pricing, service level commitments, and performance metrics, while ensuring compliance with Canadian federal and provincial regulations. It's particularly valuable for organizations seeking to streamline their procurement processes, secure favorable terms, and develop long-term supplier relationships. The agreement must be carefully structured to comply with Canadian competition laws while providing the flexibility to adapt to changing business needs.
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1. Parties: Identification of the parties entering into the agreement, including full legal names and addresses
2. Background: Context of the agreement, existing relationship between parties, and purpose of establishing a preferred vendor arrangement
3. Definitions: Definitions of key terms used throughout the agreement
4. Appointment and Scope: Formal appointment as preferred vendor, scope of products/services covered, and any exclusivity provisions
5. Term and Renewal: Duration of the agreement and conditions for renewal
6. Pricing and Payment Terms: Pricing structure, payment terms, invoicing requirements, and any volume-based discounts
7. Ordering Process: Procedures for placing and fulfilling orders
8. Service Levels: Performance standards, quality requirements, and delivery timeframes
9. Vendor Obligations: Key responsibilities and commitments of the vendor
10. Customer Obligations: Key responsibilities and commitments of the customer
11. Warranties: Warranties regarding products/services, compliance with laws, and general representations
12. Termination: Grounds for termination, notice requirements, and consequences of termination
13. Confidentiality: Protection of confidential information exchanged between parties
14. Limitation of Liability: Limitations on liability and indemnification provisions
15. General Provisions: Standard legal provisions including governing law, notices, assignment, and entire agreement
1. Most Favored Nation: Ensures customer receives best available pricing - include when negotiating position allows
2. Volume Commitments: Minimum purchase obligations - include when specific volume targets are agreed
3. Marketing and Promotion: Terms for joint marketing or promotional activities - include for strategic vendor relationships
4. Technology Integration: Requirements for system integration - include when technical interface is required
5. Change Management: Procedures for handling changes to products/services - include for complex or technical services
6. Business Continuity: Disaster recovery and business continuity requirements - include for critical vendors
7. Environmental Compliance: Environmental standards and requirements - include when relevant to industry
8. Data Protection: Specific data handling requirements - include when personal or sensitive data is involved
9. Insurance Requirements: Specific insurance coverage requirements - include for high-risk services
1. Schedule A - Products and Services: Detailed list of products/services covered under the agreement
2. Schedule B - Pricing Schedule: Detailed pricing information, including volume discounts and special rates
3. Schedule C - Service Level Agreement: Detailed performance metrics, measurement methods, and remedies
4. Schedule D - Key Personnel: List of key vendor personnel assigned to the account
5. Schedule E - Technical Requirements: Detailed technical specifications and requirements
6. Schedule F - Reporting Requirements: Templates and requirements for regular performance reporting
7. Appendix 1 - Order Form Template: Standard form for placing orders under the agreement
8. Appendix 2 - Change Request Form: Template for requesting changes to products/services
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