Avoiding Supplier Disputes: How to Draft a Robust Supplier Contract
9th July 2025
Are your supplier contracts protecting your business or exposing it to risk?
A vague or outdated agreement can lead to costly disputes, delivery delays, and damaged relationships. Whether you’re in manufacturing, retail, or logistics, a well-drafted supplier contract offers you the best protection. .
Why do disputes happen?
Disputes with suppliers are rarely caused by a single issue. Instead, they often stem from a combination of:
- Unclear roles and responsibilities: Who is responsible for what, and when?
- Ambiguous delivery or payment terms: Vague language around timelines or pricing can lead to misinterpretation.
- Lack of dispute resolution mechanisms: Without a clear process, disagreements can escalate quickly.
- No contingency planning: Delays due to strikes, shortages, or global events can cripple operations if not accounted for.
These risks may be avoidable, with the right contract in place.
What should a supplier contract include?
A well-drafted supplier agreement should be tailored to your business and industry. Key elements include:
Scope of Goods or Services
- Clearly define what is being supplied, including specifications, quantities, and service levels (if applicable).
- Set delivery timelines, locations, and quality standards.
- Include provisions for inspection and acceptance of goods.
Payment Terms
- Specify payment schedules, methods, and currency.
- Include penalties or interest for late payments.
- Consider early payment discounts or performance-based incentives.
Risk and Liability
- Use limitation of liability clauses to cap liability.
- Include indemnity clauses to protect against third-party claims.
- Add a force majeure clause to cover unforeseeable events like natural disasters, pandemics, or political unrest.
Dispute Resolution and Governing Law
- Include a dispute resolution process (e.g. negotiation → mediation → arbitration).
- Specify the governing law and jurisdiction—especially important for cross-border contracts.
Termination
- Define the conditions under which either party can terminate the contract.
- Include notice periods and obligations upon termination (e.g. return of goods, final payments).
How can you avoid common pitfalls?
Even well-intentioned businesses can fall into traps such as:
- The “battle of the forms”: Conflicting terms across purchase orders, invoices, and emails can create legal uncertainty.
- Overly complex legalese: Contracts that are difficult to understand may be unenforceable under the Unfair Contract Terms Act 1977.
- Inconsistent terms across contracts: Leads to confusion, especially when dealing with multiple suppliers or jurisdictions.
Why is now the right time to review your contracts?
With Q3 procurement planning underway, many UK businesses are renegotiating supplier agreements. This is the perfect opportunity to:
- Address lessons learned from recent disruptions (e.g. Brexit, COVID-19, global shipping delays).
- Align contracts with business goals.
- Consider how best protect your business against economic and geopolitical uncertainty.
Need help drafting or reviewing your supplier contracts?
At Myers & Co, our Corporate & Commercial team helps businesses across Staffordshire and beyond create contracts that protect their interests and support long-term supplier relationships.
For further information, please contact Jen Goodwin, Head of Corporate & Associate Director on 01782 491025 or email jen.goodwin@myerssolicitors.co.uk. Myers & Co has offices in Stoke-on-Trent, Staffordshire.
