Many companies need to use vendors to support their operations and it is important to establish clear expectations for them. There are several elements you should include in a vendor agreement.
Vendor agreement
The vendor agreement should identify the parties and include the purpose of the agreement. It should also outline the products or services the vendor will provide as well as the payment terms, including any monthly fees and upfront payments.
If there are service levels or performance metrics the vendor must meet, those should be addressed along with how you will monitor their performance. If the vendor does not meet expectations, there should be conditions for termination.
The vendor should agree to keep your business’s information confidential and should provide evidence of their security and privacy programs, especially if they handle your customer’s data.
The vendor must agree to follow all laws and regulations. If you plan to audit your vendor, the agreement should outline how you will access their records for review.
Dispute resolution
You may also choose to include options for dispute resolution in the agreement. It may be useful to first have a conversation with the vendor and if it is possible, consider whether both parties can compromise. You will want to retain any documentation related to the dispute.
In some situations, it may be appropriate to resolve disputes through mediation or arbitration. Mediation and arbitration involve meeting with a neutral third party to reach an agreement. The parties may also choose to resolve their dispute in court.