Reviewing a supplier agreement from a large customer

A large customer's supply agreement requires the supplier to hold stock, meet forecasts, absorb cost increases and indemnify recalls, in exchange for orders the customer has not promised to place. The document is written by the customer for the customer, and the supplier signs it to get on the list. I review it from the supplier's side and return it marked up with an explanation of the changes and which ones are worth pursuing, for a fixed fee of £495 in three working days, or £895 for a heavily negotiated document.

Who this is for

Manufacturers, producers, distributors and other suppliers of goods in England and Wales who have been sent a supply agreement, vendor agreement or trading terms by a large customer, retailer or group buyer and want to know the exposure before signing.

What to look for in a large customer's supply agreement

Volume, forecasts and stock

The review checks whether the customer commits to any volume or only to forecasts that bind the supplier and not the customer, whether the supplier must hold stock or raw materials against forecasts, and who pays for stock the customer never calls off. An agreement that requires the supplier to hold a stated period of stock with no take-or-pay obligation is a free stockholding for the customer, and the mark-up proposes a commitment to buy forecast quantities or to pay for obsolete stock.

Price, cost changes and the term

Prices in these agreements are fixed for the term, with any change requiring the customer's approval and often an obligation to share cost reductions, and the term may be long with the customer's right to extend. The review checks for a mechanism to pass through raw material, energy and wage cost increases, for a term the supplier can sustain at the price, and for the customer's right to benchmark or to require price matching, which should be reciprocal or removed.

Delivery, penalties and service levels

Delivery performance is measured against on-time-in-full targets with deductions, chargebacks or service credits for shortfalls, and the review checks that the targets exclude causes outside the supplier's control, that deductions are proportionate and are the sole remedy, and that the customer's forecast accuracy and order lead times are conditions of the supplier's performance. Chargebacks for late deliveries that the customer's own systems caused are the commonest overpayment in these relationships.

Quality, warranties and recall indemnities

The agreement will require goods to conform to specification and to the quality section 14 of the Sale of Goods Act 1979 implies, with warranties running from the customer's sale rather than delivery, an indemnity for recalls, product liability under Part I of the Consumer Protection Act 1987 and consumer claims, and often a right to reject and return at the supplier's cost without a time limit. The review limits warranties to a stated period from delivery, ties the recall indemnity to defects that are the supplier's fault, requires the customer to notify defects within a stated period, and checks that the indemnities are within the supplier's product liability insurance.

Payment, set-off, termination and flow-downs

Payment terms will be long, and the Late Payment of Commercial Debts (Interest) Act 1998 allows that where agreed and not grossly unfair, but the review checks for the customer's rights to set off disputed sums, marketing contributions and retrospective rebates, for termination for convenience on short notice with no compensation for committed costs, and for flow-down obligations (codes of conduct, audit rights, section 54 of the Modern Slavery Act 2015 and the Bribery Act 2010, insurance levels) that the supplier must be able to meet. The mark-up proposes a notice period that lets the supplier run down materials and a payment clause without open-ended deductions.

What it costs

Standard review, £495. Marked-up document and a written explanation of the changes. Three working days.

Complex review, £895. Heavily negotiated or unusually complex documents. Five working days.

Buying online forms the engagement on payment. The scope is what the contract review page describes, you accept the Terms of Service at checkout, and I email you within four working hours to get started. If you would rather ask something first, email me.

What you get

• Your own contract returned with my amendments as tracked changes, plus a clean version with every change accepted, ready to send to the other side
• Comments in the document where a point needs explaining
• A written explanation of what I have changed and why, by email or as an attachment if it is lengthy, marking the points I would hold firm on and the ones that are negotiable
• A view on what is normal market practice and what is the other side pushing their luck
• One round of follow-up questions by email, included

What is not included

• Negotiating directly with the other side, which I quote separately once I know who is on the other side. Where the other side is willing to share a live document, I can work in that document directly
• Drafting a replacement contract from scratch
• Advice on the law of any jurisdiction other than England and Wales
• Tax, accounting or regulatory advice
• Disputes about a contract that is already signed

Questions I am often asked

The customer will not commit to volumes. Can we still protect ourselves?

The mark-up proposes that forecasts within a stated horizon are binding on the customer, or that the customer pays for materials and finished stock bought against them if orders do not follow. Either gives the supplier something for holding stock.

The agreement lets the customer deduct chargebacks from our invoices. Is that enforceable?

If you sign it, yes, within the agreement's terms. The review proposes that deductions require notice and evidence, are limited to the failures the supplier caused, and are capped; a right to dispute before deduction is the minimum.

What does the £895 complex review cover that the standard one does not?

The same mark-up and explanation on a document that is heavily negotiated, unusually long or has multiple schedules, where the work is in the detail of the schedules. Most supply agreements from large customers are standard reviews; a group trading agreement with a dozen schedules is complex.

Related guidance and services

• Contract review, £495, the service this page describes
• Terms and conditions drafting, £995
• Reviewing a master services agreement from an enterprise customer
• Reviewing a supplier code of conduct you are asked to sign

This page is general guidance for businesses in England and Wales, not advice on your own circumstances. Last reviewed: September 2026. Email geoffrey@caesar.co.uk.