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PLAYBOOK TEMPLATES
Master Supply Agreement
A Master Supply Agreement governs the ongoing supply of goods between buyer and supplier, setting pricing, logistics, and quality standards. This playbook provides insights into balancing continuity of supply, cost control, and contractual accountability.
Term and Termination
Negotiation strategy
Ensure the term aligns with business objectives and includes clear renewal and termination provisions. Negotiate for flexibility in termination rights to avoid being locked into unfavorable terms.
Seek a stable term with automatic renewal to ensure continuity. Negotiate termination rights that protect against abrupt contract end while allowing exit for regulatory changes.
Essential elements
1
Contract Duration
Defines start and end dates.
2
Renewal Mechanics
Conditions for automatic renewal.
3
Termination Rights
Conditions for ending the contract.
Action framework
ACCEPT
Propose edits when renewal terms are unclear or overly restrictive.
EDIT
Reject if termination rights are absent or insufficient.
ADD
Add language for regulatory change termination if missing.
PRO TIP
Always define notice periods and post-termination obligations to avoid disputes.
Real-world examples
FAVORABLE
Preferred Term and Termination Clause
"The term of this agreement shall commence on [Start Date] and continue until [End Date], subject to automatic renewal for successive [X]-year periods unless either party provides written notice of non-renewal at least [Y] days prior to the end of the current term. Either party may terminate this agreement for material breach, convenience, or regulatory change, with [Z] days' written notice. Post-termination obligations include [specific obligations]."
NEUTRAL
Standard Termination Clause
"The agreement shall renew automatically unless terminated by either party with [Y] days' notice. Termination rights include breach and regulatory change, with [Z] days' notice."
UNFAVORABLE
Restrictive Termination Clause
"The agreement shall continue indefinitely unless terminated by mutual consent, with no specific termination rights outlined."
Alternative scenarios & positions
High-Risk Projects
In high-risk projects, ensure termination rights are robust to allow exit if project risks become unmanageable.
Long-Term Partnerships
For long-term partnerships, focus on renewal terms that allow periodic reassessment of the relationship.
Regulatory Environments
In volatile regulatory environments, include clauses that allow termination if compliance becomes untenable.
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WEEK 2
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WEEK 3
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WEEK 4
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