Inventors need to negotiate more than price with their vendors, they need to set quality and performance standards. I recommend inventors study this agreement to know what they should be talking to their vendors about, and also ask them to sign it. Many won’t sign the total agreement, but they typically will at least agree to a Statement of Work. (SOW)

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Vendor Supply Agreement

This agreement (the “Agreement”) effective as of August 22, 2012 (the “Effective Date”) between ___________________(hereafter “Client”) and ______________(hereafter the “Contractor”);

WHEREAS, the Client has designed and desires to sell ___________________________________with (1) the Statement of Work (SOW) annexed to the Agreement as Exhibit A, and (2) the sample of the final desired product supplied by Client and (3) the terms and conditions set forth in the Agreement; and

WHEREAS, Contractor is willing to provide such services in accordance such terms and conditions;

NOW, THEREFORE, in consideration of the foregoing and the mutual promises and covenants contained herein, the parties hereto hereby agree as follows:

1. The Client hereby engages Contractor, and Contractor hereby accepts such engagement, upon the terms and conditions set forth herein, for the period commencing on the Effective Date specified in the SOW and ending upon the Client’s acceptance of the Contractor’s services and deliverables, unless earlier terminated pursuant to the terms of this Agreement. 

• Contractor shall perform the services set for in the SOW  (hereinafter, the “Services”)

and deliver the deliverables described in the SOW  (hereinafter the “Deliverables”) in accordance with the timeline set forth in the SOW.  Any changes to the SOW which will impact the cost of the project or change the time line, must be accomplished through a change order, using the form annexed to the agreement as Exhibit B, signed by both parties. 

• As complete compensation for the Services and Deliverables, the Client will pay contractor the sum of $2.50 per piece for cut pieces, and $2.75 for uncut fabric, with the Client providing both the fabric and the clamp. (SOW A)  If product based on the original sample is ordered, the price is $2.00 per piece for cut pieces, and $2.25 for uncut fabric. (SOW B).

If the special product is ordered the price for cut fabric will be $3.50, and the price for uncut pieces will be $3.75.  (SOW C)

• Terms.  Client will has the option of paying either upfront or on 30 days terms.

• In performing all aspects of the Services, Contractor shall coordinate and consult regularly with Client’s designer, _____________, or a designee thereof.

• Promptly after completion of each component of the Services/Deliverables, the Client will review, and where appropriate, test the component for conformity to the specifications and warranties contained in the Agreement. If the component so conforms, the Client will notify the Contractor accordingly (“Acceptance”). If the Client claims that there is a failure to conform to such specifications and/or warranties, the Client shall promptly notify Contractor of such nonconformance and Contractor will promptly take all steps necessary to effect conformance.

• Each party acknowledges that the timeline is contingent upon timely completion of each phase by each party. Each party will report delays or anticipated delays as they occur and will make every reasonable effort to correct the situation. The Timeline for production in Appendix A is dependent on prompt approvals of production and the volume ordered.

• In performing the Services, Contractor is an independent contractor, and not an employee of the Client, nor are any of Contractor’s employees or contract personnel employees of the Client.  Contractor shall have the right to perform services for others and the sole right to control and direct the means, methods and manner by which the Services required hereunder will be performed, consistent with the terms of this Agreement. Contractor shall not be entitled to any fringe benefits, including health insurance, benefits, paid vacation, or other employee benefits provided by the Client to its employees.  Contractor is responsible for payment of any taxes, withholdings and any other statutory or contractual obligations of any sort, in connection with services provided hereunder. Contractor has no authority to create or assume any obligation on behalf of the Client, or to hold itself out as having such authority, without the prior written consent of the Client.

• All materials delivered to the Client by the Contractor shall become the property of the Client, unless the parties agree otherwise in a signed contract. The Services will be provided on a “work for hire” basis, and the materials produced under the Agreement, including without limitation, the Deliverables, shall be deemed “works made for hire” as that term is defined under the U.S. copyright laws, of which the Client owner.

1. It is understood that in the course of the Contractor’s performance hereunder Contractor may become privy to information relating to the Client’s operations, employees, finances, projects, products and production plans. Such information shall be deemed confidential in every case where either a reasonable person would understand it to be confidential or the Client has identified it as such, unless the information in question (i) was already known to Contractor prior to its first disclosure hereunder; (ii) has become generally known to the public through no fault of the Contractor’s; or (iii) is required by law to be disclosed (in which case the Contractor shall provide the Client with a reasonable opportunity to seek a protective order maintaining confidentiality).  Contractor shall maintain the secrecy of all of the Client’s confidential information (including, without limitation, all confidential information that the Client has received or will receive from third parties), using the same care it applies to its own confidential information, and shall make use of such confidential information only to the minimum extent necessary to effect the Agreement

1. Representations and Warranties:

• Contractor represents and warrants that the Deliverables and the Services will be performed in a good workmanlike manner, by competent personnel, and in accordance with applicable professional standards, and that the Deliverables will perform in accordance with the specifications provided to Contractor by the Client.  If any element of the Services does not conform to the foregoing warranty, the Client shall notify the Contractor in writing of such nonconformance, and Contractor shall re-perform such element in a manner that does conform.
• Contractor represents and warrants that its provision of Services and delivery of the Deliverables hereunder will not infringe any United States patent existing on the Effective Date or any copyright or trade secret which is protected under United States law.
• Contractor represents and warrants that Contractor’s signing of this Agreement and the performance of Contractor’s Services hereunder is not and will not be in violation of any other contract, agreement or understanding to which Contractor is a party or by which Contractor is bound. 

1.  Exclusive Production

Contractor shall not use, copy or reproduce either for its own sales or sales to other any of Client’s designs.  Contractor may request permission from Client to sell Client’s designs, but in that event Contractor will pay Glass Wraps a mutually agreed to royalty.   

1. This Agreement shall be governed by the laws of the State of ____________, and any dispute arising hereunder shall be resolved in the courts of the State of_______________,.

1. Neither party may transfer or assign this Agreement, in whole or in part, in any manner whatsoever without the prior written consent of the other. 

1. If any term or other provision of this Agreement, or any application thereof to any circumstance is invalid, illegal or incapable of being enforced by any rule of law, or public policy in whole or in part, such provisions or applications shall to that extent be severable and shall not effect other provisions or applications of this Agreement. 

1. This Agreement contains a complete statement of all arrangements between the parties relating to its subject matter, supercedes any previous arrangements or understandings, whether written or oral, and may only be changed by a written agreement signed by the parties hereto. 

AGREED TO AND ACCEPTED BY:

For Contractor:                                                 For THE CLIENT:

______________________________                    ______________________________

(Name)                                                  (Name)

______________________________                    ______________________________

(Signature)                                                        (Signature)

______________                                                ______________

(date)                                                                (date)