Scots Law Supply Agreement
Parties
This agreement is dated the date on which it is signed by the last of the parties.
This agreement is made between [Buyer legal name and details] (the "Buyer") and [Supplier legal name and details] (the "Supplier").
Key Terms
"Goods" means [Goods].
"Specification" means [Specification].
"Ordering Procedure" means [Ordering procedure].
"Delivery Location" means [Delivery location].
"Delivery Period" means [Delivery period].
"Price" means [Price].
"Payment Period" means [Payment period].
"Initial Term" means [Initial term].
"Renewal Period" means [Renewal period].
"Termination Notice Period" means [Termination notice period].
"Warranty Period" means [Quality warranty period].
"Confidentiality Period" means [Confidentiality period].
"Force Majeure Period" means [Force majeure period].
"Liability Cap" means [Liability cap].
"Excluded Loss" means [Excluded loss].
"Governing Law" means Scotland.
"Dispute Forum" means the courts of Scotland.
Interpretation
"Business Day" means Monday to Friday, excluding public holidays in Scotland and any other day on which banks in Edinburgh are closed for ordinary business.
Orders
The Buyer may place orders in accordance with the Ordering Procedure. Each order is an offer by the Buyer to buy the Goods stated in it and becomes binding only when the Supplier accepts it in writing or starts to perform it, whichever occurs first.
This agreement governs every accepted order. If an accepted order conflicts with this agreement, the order prevails only to the extent that it expressly identifies the provision of this agreement that it changes and states that it prevails. The Supplier's terms appearing in any quotation, acknowledgement, invoice or other document do not apply unless the Buyer expressly agrees to them in writing.
Supply
The Supplier must supply the Goods in accordance with each accepted order, this agreement and the Specification.
The Supplier warrants that, for the Warranty Period, the Goods will conform in all material respects with the Specification, be of satisfactory quality, be reasonably fit for any purpose made known by the Buyer and accepted by the Supplier, and comply with applicable laws and mandatory standards.
Delivery
The Supplier must package the Goods properly and deliver them to the Delivery Location within the Delivery Period. Delivery is complete when the Goods are unloaded at the Delivery Location and the Buyer or its representative signs the delivery record. Dates are estimates unless an accepted order states that time is of the essence. The Supplier must promptly notify the Buyer of any anticipated delay and use reasonable efforts to minimise it.
Risk and Title
Risk in the Goods passes to the Buyer on completed delivery. As between the parties, title to the Goods does not pass until the Supplier has received payment in cleared funds for those Goods. This provision creates contractual rights only to the extent effective under Scots law and does not purport to reserve a real right in the Goods against third parties after delivery or possession has passed. Until title passes, the Buyer must keep the Goods identified as the Supplier's where reasonably practicable, keep them insured and not create or permit any security over them. Nothing in this clause restricts the Buyer's statutory rights or remedies.
Inspection and Rejection
The Buyer may inspect the Goods within a reasonable time after delivery. If the Goods do not conform with this agreement or an accepted order, the Buyer must notify the Supplier with reasonable particulars. The Supplier must, at its option and expense, promptly repair or replace the non-conforming Goods or refund the relevant Price. This clause does not exclude any remedy available to the Buyer under applicable law, including the Sale of Goods Act 1979 as it applies in Scotland.
Price and Payment
The Buyer must pay the Price for Goods properly supplied under an accepted order. Unless expressly stated otherwise, the Price is exclusive of VAT and inclusive of packaging, delivery, insurance and all other charges. The Supplier may invoice on delivery. The Buyer must pay each valid undisputed invoice within the Payment Period after receipt.
If the Buyer fails to pay an undisputed sum when due, the Supplier may claim interest and compensation to the extent available under the Late Payment of Commercial Debts (Interest) Act 1998. The Supplier may suspend further deliveries on at least five Business Days' written notice while an undisputed overdue sum remains unpaid.
Product Compliance and Recall
The Supplier must maintain all approvals, registrations, licences, traceability records and quality controls required to supply the Goods. It must promptly notify the Buyer of any actual or suspected safety, quality, regulatory or compliance issue affecting the Goods. The parties must cooperate in any recall, withdrawal, corrective action or regulator inquiry. The Supplier bears the reasonable costs to the extent the matter arose from the Supplier's breach, defective Goods or failure to comply with applicable law.
Intellectual Property
The Supplier retains ownership of its pre-existing intellectual property rights. It grants the Buyer a non-exclusive, royalty-free licence to use those rights only as necessary to use, resell or exploit the Goods as contemplated by this agreement. The Supplier must defend the Buyer against any third-party claim that the Buyer's authorised use or resale of the Goods infringes United Kingdom intellectual property rights, and pay losses finally awarded or agreed in settlement, except to the extent the claim arises from the Buyer's modification, combination or use contrary to the Supplier's instructions. The Supplier may procure a right to continue use, modify the Goods so they are non-infringing without material loss of function, or replace them; if none is reasonably available, the Buyer may terminate the affected order and recover the Price paid for affected Goods.
All designs, tooling, materials, data and other items supplied by or for the Buyer remain the Buyer's property. The Supplier may use them only to perform this agreement, must keep them secure and identifiable, and must return them promptly on request or termination, subject to any mandatory legal retention requirement.
Confidentiality
"Confidential Information" means information of a confidential nature that one party or its group companies disclose to the other in connection with this agreement. Each party must keep the other's Confidential Information confidential, use it only to perform or receive the supply of the Goods, and disclose it only to its personnel, professional advisers, insurers and permitted subcontractors who need to know it and are bound by equivalent duties of confidence, or where the law, a court or a regulator requires disclosure. These duties do not apply to information that the recipient can show is or becomes public other than through its breach, was lawfully known to it without restriction, is independently developed, or is lawfully received from a third party without restriction. These duties continue for the Confidentiality Period and, for trade secrets, for as long as they remain trade secrets.
Neither party may name the other as a customer or supplier, or describe the Goods or this agreement, in any publicity without the other's prior written consent.
Data Protection
Each party must comply with applicable data protection law, including the UK GDPR. Where the Supplier processes personal data on the Buyer's behalf, it must: process it only on the Buyer's documented instructions; ensure that its personnel are bound by confidentiality; apply appropriate technical and organisational security measures; engage a sub-processor only with the Buyer's prior written authorisation and on equivalent written terms; assist the Buyer with data subjects' requests, security, breach notifications and impact assessments; notify the Buyer without undue delay of any personal data breach; transfer the personal data outside the United Kingdom only on the Buyer's instructions and as the law permits; delete or return it when the supply ends, unless the law requires it to be kept; and make available the information needed to demonstrate compliance and allow audits. Before processing starts, the parties must record in writing the subject matter, duration, nature and purpose of the processing, the types of personal data and the categories of data subjects.
Anti-Bribery and Ethical Conduct
Each party must comply with the Bribery Act 2010 and all other applicable anti-bribery and anti-corruption laws. The Supplier must not offer, give, request or accept any bribe or other improper advantage in connection with this agreement, must maintain procedures adequate to prevent its personnel and subcontractors from doing so, and must promptly report to the Buyer any request for one. Where the Modern Slavery Act 2015 applies to the Supplier, it must comply with it and take reasonable steps to ensure that there is no slavery or human trafficking in its business or supply chains. The Buyer may terminate this agreement with immediate effect by written notice if the Supplier breaches this clause.
Term and Termination
This agreement starts on its date and continues for the Initial Term. It then renews automatically for successive Renewal Periods unless either party gives the other at least the Termination Notice Period's written notice before the end of the Initial Term or current Renewal Period.
Either party may terminate this agreement or an affected order immediately by written notice if the other commits a material breach and, where the breach can be remedied, fails to remedy it within 30 days after written notice; or becomes insolvent, enters administration, liquidation or a composition with creditors, or ceases or threatens to cease carrying on business. Termination is without prejudice to accrued rights and remedies.
On termination or expiry, each party must promptly pay sums properly due to the other. Termination or expiry does not affect any accepted order already in force unless the terminating notice states otherwise. Clauses intended by their nature to survive, including those concerning payment, intellectual property, confidentiality, liability, notices, third-party rights, governing law and disputes, survive termination or expiry.
Liability
Nothing in this agreement excludes or limits liability that cannot lawfully be excluded or limited, including liability for death or personal injury caused by negligence, fraud or fraudulent misrepresentation. Subject to that, neither party is liable to the other for Excluded Loss. Each party's aggregate liability arising out of or in connection with this agreement, whether in contract, delict (including negligence), restitution or otherwise, is limited to the Liability Cap. The exclusions and cap do not apply to the Buyer's obligation to pay undisputed sums due, or to either party's liability for breach of confidentiality, infringement of intellectual property rights or data-protection obligations, which remain subject to applicable law and any separate express limit.
Insurance
The Supplier must maintain insurance with reputable insurers at levels appropriate to its obligations and reasonably sufficient to cover its potential liabilities under this agreement, including product liability insurance where appropriate, and provide reasonable evidence of it on request.
Force Majeure
Neither party is liable for delay or failure in performing its obligations, other than payment obligations, caused by events beyond its reasonable control. The affected party must notify the other promptly and use reasonable efforts to minimise the effect. If the event prevents performance for more than the Force Majeure Period, either party may terminate this agreement by written notice.
Notices
A notice under this agreement must be in writing and delivered by hand, by pre-paid recorded post or by email to the Buyer at [Buyer notice address and email] or to the Supplier at [Supplier notice address and email], or to any other address a party notifies for this purpose. A notice is received: if delivered by hand, on delivery; if posted, at 9.00 am on the second Business Day after posting; and if emailed, at the time it is sent or, if that is outside business hours at the recipient's location, at 9.00 am on the next Business Day. This clause does not apply to the service of legal proceedings.
General
Neither party may assign, transfer, novate, subcontract or otherwise deal with its rights or obligations under this agreement without the other's prior written consent, not to be unreasonably withheld or delayed. The Supplier remains responsible for the acts and omissions of its subcontractors. Either party may assign this agreement to a group company or in connection with a merger, reorganisation or sale of all or substantially all of its business or assets on written notice to the other.
This agreement and each accepted order constitute the entire agreement between the parties concerning their subject matter and supersede prior discussions, correspondence and arrangements. Each party acknowledges that it has not relied on any statement or representation not set out in this agreement, but nothing limits liability for fraud or fraudulent misrepresentation. A variation is effective only if in writing and signed by authorised representatives of both parties.
If any provision is or becomes invalid, illegal or unenforceable, it is to be treated as modified to the minimum extent necessary to make it valid, legal and enforceable and, if that is not possible, deleted. The remaining provisions continue in force. A failure or delay to exercise a right is not a waiver of it, and a waiver is effective only if in writing.
A person who is not a party to this agreement has no right under the Contract (Third Party Rights) (Scotland) Act 2017 to enforce any term of this agreement. This does not affect any right or remedy that exists independently of that Act.
Governing Law and Disputes
This agreement and any dispute or claim, including any non-contractual dispute or claim, arising out of or in connection with it or its subject matter are governed by the Governing Law. The courts of Scotland have exclusive jurisdiction to settle any such dispute or claim.