Raw Material Supply Agreement Sample

Raw material supply agreements (RMSAs) are contractual agreements between manufacturers and suppliers detailing the terms of the supply and purchase of raw materials. These are essential documents that help businesses maintain a steady and reliable supply chain of raw materials while minimizing risks and avoiding disputes.

In this article, we will explore the basics of raw material supply agreements and provide a sample template that businesses can use to draft their own RMSAs.

What is a Raw Material Supply Agreement?

A raw material supply agreement is a legal agreement between a manufacturer and a supplier of raw materials. It outlines the terms and conditions of the supply and purchase of raw materials, including quality standards, price, delivery schedules, warranties, and liabilities.

This agreement is crucial in ensuring that the manufacturer has a steady and reliable supply of raw materials to sustain production. It also specifies the responsibilities of both parties, including the supplier`s responsibility to deliver quality raw materials and the manufacturer`s obligation to pay for the delivered supplies.

Why is a Raw Material Supply Agreement Important?

RMSAs are critical in managing the risks associated with raw material supply. For example, they help manufacturers to:

– Ensure a reliable supply of raw materials to maintain production schedules

– Settle disputes that may arise regarding quality, delivery, and payment terms

– Protect their business from supply chain disruptions or material shortages

– Comply with regulatory requirements regarding the quality and safety of raw materials

A well-written RMSA can help both parties minimize risks and increase the efficiency and effectiveness of the raw material supply chain.

Sample Raw Material Supply Agreement Template

Here is a basic template that businesses can use as a starting point for drafting their own raw material supply agreement.


– Parties: This section identifies the parties entering into the agreement, including the manufacturer and the supplier.

– Purpose: This section outlines the purpose of the agreement, i.e., to establish the terms and conditions of the supply and purchase of raw materials.

Scope of Agreement

– Products: This section specifies the raw materials covered under this agreement, including product descriptions and specifications.

– Quantity: This section lists the minimum and maximum quantity of raw materials to be supplied by the supplier during the contract period.

– Delivery: This section outlines the delivery terms, including delivery schedule, transportation mode, and delivery location.

– Quality: This section specifies the quality standards that the raw materials must meet, including testing and inspection requirements.

– Packaging: This section details the packaging requirements for the raw materials, including labeling and marking requirements.

Price and Payment

– Price: This section outlines the pricing structure for the raw materials, including the unit price and any applicable discounts.

– Payment: This section specifies the payment terms, including payment methods, payment schedule, and late payment penalties.

Warranty and Liability

– Warranty: This section outlines the supplier`s warranty for the delivered raw materials, including the duration and scope of the warranty.

– Liability: This section details the respective liabilities of the parties in case of any disputes or breaches of the agreement.

Termination and Renewal

– Termination: This section outlines the conditions under which the agreement may be terminated, including breach of the terms of the agreement.

– Renewal: This section specifies the conditions for renewing the agreement, including notice periods and renewal fees.


A well-written raw material supply agreement can help businesses maintain a reliable supply chain of raw materials while minimizing risks and avoiding disputes. By using the template provided in this article, businesses can draft their own RMSAs that meet their specific needs and requirements.

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