Supply contract: what to check before the first shipment

A supply contract usually “breaks” not in a neat preamble, but on the first shipment: the wrong assortment, a dispute over when risk passes, a refusal to accept, a late payment. Below is what to check in the text before signing and before the goods leave the warehouse.

1. Subject: what exactly is supplied

• Name, article, quantity, unit of measure — in the contract or the specification
• Quality: GOST / technical specifications / sample; permitted deviations
• Packing and labeling — whose requirements, and who pays for repacking
• Whether the assortment can be changed by an addendum or an order without a new “paper”

If the subject is vague (“goods as agreed by the parties”), a short-delivery dispute is almost inevitable. The specification for each shipment should be an annex, or should refer unambiguously to an order.

2. Deadlines and the delivery procedure

• Deadline: a calendar date, a period, or “within N days of payment / the order”
• Lots: minimum volume, schedule, the buyer’s right to refuse the remainder
• Pickup or delivery; basis (supplier’s warehouse / buyer’s warehouse / terminal)
• What counts as delay, and from which date the penalty runs

3. Transfer of risk and title

The classic conflict: the goods were damaged in transit, and the contract is unclear whose risk it is. Fix the moment: handover to the carrier, signing the waybill at the buyer’s warehouse, scanning at the terminal. Separately — who insures the cargo, and in whose favour.

• Transfer documents: waybill / UPD / acceptance certificate — and in what form (paper / EDI)
• Discrepancies in quantity and quality: inspection period and claim period
• Latent defects: period and procedure for notice

If the closing documents go into EDI and the contract stayed in Word, check how the documents fit together: acceptance certificate and UPD in EDI vs a paper contract.

4. Price, payment, return

• The price is fixed or formula-based; VAT is inside the price or on top
• Prepayment / deferral / letter of credit; the moment of payment (invoice, UPD, acceptance)
• The right to withhold payment on a quality claim — whether it exists, and in what amount
• Return of unsold goods or defects: who carries them, and at whose expense

5. Liability and unilateral exit

• Penalty for late delivery and for late payment — symmetry of the rates
• Liability cap (a percent of the lot / of the contract) — whether it wipes out the loss
• Unilateral withdrawal: for which breaches, and with what notice
• Force majeure: the list, the notice period, the fate of the prepayment

For sellers whose “supply” also runs through a marketplace offer, warehouse risk on the platform is a separate topic: the Wildberries and Ozon offer. This checklist is about the B2B contract between supplier and buyer.

Checklist before the first shipment

Related reading

• How to check a contract for risks
• Hidden clauses in a contract
• Agreeing edits in a contract
• Contract with fulfillment and 3PL

Short conclusion

Before the first shipment, what matters most is a clear subject, the moment of risk, acceptance rules, and symmetric liability. A template “like everyone else’s”, without a specification and inspection deadlines, is almost always more expensive than an hour of reading the text.