Terms and Conditions on Contracts with Suppliers

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This informative webinar will guide you through the essential terms and conditions commonly found in vendor agreements, as well as the critical clauses you should include in customer-generated contracts. Whether you're managing vendor relationships or drafting contracts to protect your organization, this session offers a practical look at how to identify, assess, and negotiate contractual language to safeguard your business interests.

You'll gain insights into which clauses are standard, which ones can be leveraged to your advantage, and which may pose risks if left unchecked. Learn how to strengthen your company’s position, avoid unfavorable terms, and understand when a term is a legal deal breaker or simply a business decision. This session is ideal for professionals involved in contract management, procurement, or vendor oversight seeking to boost their confidence and effectiveness in handling agreements.

Your Benefits for Attending:
  • Learn how to spot vendor terms that may put your organization at a disadvantage.
  • Understand which terms you should proactively include to protect your interests.
  • Identify which terms are negotiable, which are business decisions, and which may be non-negotiable.
  • Review real-world examples, including key sections such as preamble, payment terms, term dates, renewals, and scope of work.
  • Gain strategies to avoid being locked into a contract with an underperforming vendor.

This webinar is a valuable resource for anyone who reviews, drafts, or negotiates contracts and wants to minimize risk while maximizing organizational benefit.

Who Should Attend:
Contract managers, procurement officers, legal professionals, compliance officers, and anyone responsible for vendor relationship management or contract negotiations.

Level: Beginner
Format: Live webcast
Instructional Method: Group: Internet-based
NASBA Field of Study: Business Law (2 hours)
Program Prerequisites: None
Advance Preparation: None

  1. Introduction
  2. The Preamble 00:01:51
  3. Documents as Attachments 00:06:09
  4. Scope of Work 00:12:02
  5. Payment Terms 00:15:04
  6. Payment Terms Cont. 00:17:28
  7. Term Dates and Renewals 00:24:00
  8. Term Dates and Renewals Cont’d 00:31:31
  9. Escalation Clause 00:33:28
  10. Termination Clauses 00:35:27
  11. Termination Clauses - Example 1 00:41:14
  12. Termination Clauses - Example 2 00:42:45
  13. Termination Clauses - For Convenience 00:45:11
  14. Jurisdiction 00:47:24
  15. Arbitration 00:48:57
  16. Insurance 00:50:19
  17. Bonding 00:53:16
  18. Indemnification 00:56:05
  19. Indemnification Cont’d 00:58:09
  20. Warranty 00:59:28
  21. Term Changes 01:04:23
  22. Shipping 01:05:46
  23. Acknowledging Facts That Should Be Settled In Court 01:07:30
  24. Prices 01:10:06
  25. Notifications 01:11:31
  26. Security Interest 01:12:30
  27. Your Terms and Conditions 01:13:20
  28. Final Agreement Between the Parties 01:1
  29. Independent Contractor Provision 01:14:53
  30. Waiver of Enforcement 01:15:52
  31. Recap 01:16:34
  32. Responsibility of the Contractor 01:17:44
  33. Responsibility of the Contractor Cont’d 01:20:28
  34. Responsibility of the Contractor Cont’d. 01:21:52
  35. Penalty Clauses 01:22:41
  36. Order of Precedence 01:25:06
  37. Contract Draft Legal Review 01:27:26
  38. Signatures Notarized 01:29:00
  39. Attachments/Exhibits 01:33:03
  40. Contract Amendments 01:31:27
  41. Contract Amendments Cont’d. 01:32:42
  42. Contract Administration 01:33:50
  43. Contract Administration Cont’d. 01:35:07
  44. Question & Answer Period / Thanks for Attending! 01:35:49
  45. Presentation Closing 01:39:19
  • Kenneth Jones

    Kenneth Jones

    Ken Jones has been working in the public and non-profit procurement field for over 30 years. He worked for the New York State Office of Taxation and Finance as a Purchasing Assistant from 1985-87 and went on to work for the University at Albany, SUNY where he served as a Purchasing Agent and in 1999 [...]

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For more information regarding administrative policies such as complaint and refund, and cancellation please contact our offices at 407-542-4317 or [email protected].

You must answer all questions during the webinar, view the recording completely and pass the test at the end with 70% correct answers to receive CPE credit.

ISM Credit

Institute of Supply Management

This program may be used for Continuing Education Hours (CEH) toward recertification for programs offered by the Institute for Supply Management®, including the Certified Professional in Supply Management® and Certified Professional in Supplier Diversity®.

QPANJ Credit

Qualified Purchasing Agent - New Jersey

ATAPU Credit

Aurora Training Advantage is offering continuing education points designed to recognize dedication to training and excellence in purchasing.
  • Bid 00:06:19, 00:13:06, 00:24:24, 00:26:36, 00:32:15, 00:54:22, 01:22:00
  • Commodity 00:29:27. 01:17:57
  • Consumer Price Index (CPI) 00:28:18, 00:29:48
  • Contract 00:00:06, 00:02:02, 00:03:01, 00:06:14, 00:09:11, 00:13:22, 00:17:35, 00:22:03, 00:30:01, 00:35:45, 00:41:33, 00:46:31, 00:48:48, 01:05:29, 01:13:30, 01:29:06
  • Indemnification 00:56:05
  • Independent Contractor 01:14:57
  • Invoice 00:17:46, 00:22:04
  • Preamble 00:02:12
  • Prevailing Wage 00:27:55
  • Procurement 00:00:21, 00:06:17, 01:18:01
  • Producer Price Index (PPI) 00:28:15
  • Purchase Order 01:04:30
  • Request for Proposal (RFP) 00:06:23, 00:12:12, 00:24:26, 00:32:18, 01:22:00
  • Scope of Work (SOW) 00:08:46, 00:12:20
  • Supplier 00:00:08
  • Vendor 00:02:05, 00:06:34, 00:10:30, 00:12:10, 00:13:18, 00:21:57, 00:32:04, 00:35:32, 00:46:34, 00:56:09, 01:06:05, 01:17:51, 01:30:08

Bid: A bid is an offer made by an investor, trader, or dealer in an effort to buy an asset or to compete for a contract.

Commodity: A basic good used in commerce that is interchangeable with other goods of the same type.

Consumer Price Index (CPI): A consumer price index is a statistical estimate of the level of prices of goods and services bought for consumption purposes by households. It is calculated as the weighted average price of a market basket of consumer goods and services. Changes in CPI track changes in prices over time.

Contract: A written or spoken agreement, especially one concerning employment, sales, or tenancy, that is intended to be enforceable by law.

Indemnification: Compensating a person for damages or losses they have incurred or will incur related to a specified accident, incident, or event.

Independent Contractor: An independent contractor is a person or entity contracted to perform work or provide services to another entity as a non-employee. As a result, independent contractors must pay their own Social Security and Medicare taxes. - Investopedia (https://www.investopedia.com/)

Invoice: An invoice, bill or tab is a commercial document issued by a seller to a buyer, relating to a sale transaction and indicating the products, quantities, and agreed prices for products or services the seller had provided the buyer. Payment terms are usually stated on the invoice.

Preamble: A preamble in a contract is an introductory paragraph or section that provides background information, outlines the purpose of the agreement, and identifies the parties involved. While not legally binding on its own, it offers valuable context for understanding the contract's intent and can aid in interpreting its provisions.

Prevailing Wage: In United States government contracting, a prevailing wage is defined as the hourly wage, usual benefits and overtime, paid to the majority of workers, laborers, and mechanics within a particular area. This is usually the union wage.

Procurement: Procurement is the process of finding and agreeing to terms, and acquiring goods, services, or works from an external source, often via a tendering or competitive bidding process. Procurement is used to ensure the buyer receives goods, services, or works at the best possible price when aspects such as quality, quantity, time, and location are compared.

Producer Price Index (PPI): The Producer Price Index (PPI) measures the average change in selling prices received by domestic producers for their output. It tracks price changes from raw materials to finished goods and services, giving a sense of potential inflation for consumers.

Purchase Order: A legal contract between a buyer and a vendor. It lists the materials or services to be purchased on specified terms and conditions (quantity, price / pricing conditions, delivery date).

Request for Proposal (RFP): A request for proposal (RFP) is a document that solicits proposal, often made through a bidding process, by an agency or company interested in procurement of a commodity, service, or valuable asset, to potential suppliers to submit business proposals.

Scope of Work (SOW): The Scope of Work (SOW) is the area in an agreement where the work to be performed is described. The SOW should contain any milestones, reports, deliverables, and end products that are expected to be provided by the performing party. The SOW should also contain a time line for all deliverables.

Supplier: A supplier is an entity that supplies goods and services to another organization. A supplier is usually a manufacturer or a distributor. A distributor buys goods from multiple manufacturers and sells them to its customers. Similar Terms. A supplier is also known as a vendor.

Vendor: A vendor is a person or business that supplies goods or services to a company. Another term for the vendor is the supplier. In many situations, a company presents the vendor with a purchase order stating the goods or services needed, the price, delivery date, and other terms.

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Frequently Asked Questions

A well-drafted supplier contract protects your organization by clearly defining the relationship, managing risk, and providing clear remedies when things go wrong. Essential terms include the preamble (identifying parties and purpose), a detailed scope of work specifying deliverables, standards, and timelines, and clearly defined payment terms covering amounts, due dates, invoicing procedures, and late payment consequences. The contract term, renewal provisions, and termination clauses—including termination for cause and termination for convenience—determine how and when the agreement can end. Escalation clauses protect against cost inflation by tying price increases to CPI or PPI indices. Indemnification provisions allocate liability for damages and third-party claims. Insurance and bonding requirements ensure the vendor can cover its obligations financially. Warranty provisions define standards and remedies for non-conforming goods or services. Jurisdiction and dispute resolution clauses (arbitration vs. litigation) establish how disagreements are handled. Aurora Training Advantage's operations webinar with procurement expert Kenneth Jones provides comprehensive guidance on identifying, assessing, and negotiating each of these critical contract terms to protect your organization's interests in every supplier agreement.
Vendor-generated contracts naturally favor the vendor—they are written by the vendor's legal team to maximize the vendor's protections and minimize their obligations. Procurement teams must approach these documents as starting points for negotiation rather than take-it-or-leave-it offers. Begin by reviewing every clause systematically: identify terms that are standard and acceptable, terms that present business risk but are negotiable, and terms that are non-negotiable deal-breakers from either side. Common targets for negotiation include payment terms (vendors often request net-30 when net-60 is standard), auto-renewal clauses with minimal notice periods, limitation of liability caps that leave the buyer exposed, overly broad indemnification provisions, and unilateral price adjustment rights. For each unfavorable term, understand the vendor's business reason for it—addressing their underlying concern often generates creative compromise. Document all negotiated changes in a formal amendment or redlined draft, not informal emails. Build relationships with vendor account managers before major renewal negotiations—goodwill facilitates flexibility. Aurora Training Advantage's operations webinar equips contract managers and procurement officers with strategies to identify risk clauses and negotiate more favorable terms in supplier agreements.
Termination clauses are among the most consequential provisions in a supplier contract, defining how and when either party can exit the relationship. Termination for cause allows a party to end the contract—typically without penalty—when the other party has materially breached the agreement, such as failing to deliver on time, providing non-conforming work, or violating compliance requirements. Cause terminations generally require notice and a cure period during which the breaching party can remedy the violation before termination takes effect. Termination for convenience, by contrast, allows a party to exit the contract for any reason or no reason at all—simply because circumstances or needs have changed. Convenience terminations typically require advance notice (30, 60, or 90 days) and may involve wind-down costs or fees. From the buyer's perspective, including a robust termination for convenience provision is critical—it prevents being locked into a relationship with an underperforming vendor when there is no clear breach to cite. Vendors often resist or limit convenience termination rights in their standard contracts. Aurora Training Advantage's procurement webinar with Kenneth Jones reviews real-world termination clause examples and strategies for negotiating adequate exit rights in supplier agreements.
An escalation clause is a contract provision that allows for price adjustments over the contract term based on changes in an agreed-upon index—typically the Consumer Price Index (CPI) or Producer Price Index (PPI)—or a negotiated fixed percentage. In long-term supplier agreements, escalation clauses recognize the economic reality that costs change over time and provide a transparent, pre-agreed mechanism for price adjustments rather than renegotiation from scratch. For buyers, escalation clauses provide predictability—they know in advance the maximum rate of price increase and can budget accordingly. They also prevent vendors from requesting large ad-hoc increases or walking away from contracts when input costs rise. For vendors, escalation clauses protect margins against commodity price increases, labor cost inflation, and supply chain pressures. Effective escalation clauses specify the index clearly, the frequency of adjustment (annually is most common), a cap on maximum increase per period, and the notice process. Without a well-drafted escalation clause, long-term contracts frequently generate disputes at renewal or expose one party to significant financial risk. Aurora Training Advantage's operations webinar covers escalation clause design and negotiation with practical examples for procurement professionals.
Effective contract administration is what converts a well-negotiated agreement into actual organizational protection. Without active monitoring, even strong contract terms fail to deliver their intended value. Contract administration begins with ensuring every active agreement is logged in a central repository—a contract management system or at minimum a structured tracker—with key dates (start, renewal notice deadlines, expiration), responsible owners, and critical obligations flagged. Calendar alerts for renewal notice windows prevent auto-renewals with underperforming vendors from slipping through. Performance monitoring against the scope of work, service level agreements, and quality standards should be scheduled and documented throughout the contract term, not just at renewal. Invoice review against contracted payment terms catches overbilling and unauthorized charges. When changes to scope, pricing, or terms are agreed, they must be formalized through written amendments rather than informal emails—a waiver of enforcement clause in many contracts means verbal changes may not be enforceable. Post-performance reviews at the end of each contract term inform future sourcing decisions. Aurora Training Advantage's operations webinar with Kenneth Jones provides procurement professionals with a complete contract administration framework to protect organizational interests throughout the full supplier relationship lifecycle.